Unlocking the Potential of Cameroon’s Startup Ecosystem: Strategies for Growth and Sustainability

By Larissa Ntoubia, Adeline Nembot, and Yollande Tankeu

Introduction

Cameroon, also known as “Africa in miniature,” has a great entrepreneurial spirit driven by young, tech-savvy individuals and an increasing number of technology hubs. Its startup ecosystem experienced growth in 2024 and moved up two positions from the previous year, surpassing Algeria (1). The presence of technology hubs like Silicon Mountain in Buea and the upcoming Silicon River in Yaoundé demonstrate the dedication of the youth and the government to promote innovation and entrepreneurship in Cameroon. However, despite these positive aspects, the ecosystem still faces significant challenges, such as a complex regulatory environment with many bureaucratic procedures and regulations, and insufficient support structures and networking opportunities.

The government of Cameroon has acknowledged the potential of this sector and has taken some steps to address the challenges. There is a proposed Startup Act in the country, which aims to create a more favorable environment for innovation and entrepreneurship. However, this Startup Act has not yet been adopted and implemented. There is still much work to be done as the number of operational technology startups in Cameroon is significantly lower (101) (2) compared to next-door Nigeria (481).

The purpose of this paper is to describe a detailed analysis of the current state of Cameroon’s startup ecosystem and to suggest practical strategies that can help cultivate a conducive environment for startup growth in the country. This paper is intended for policymakers, investors, and stakeholders within the entrepreneurial ecosystem. The paper is organized as follows: we begin by presenting a general overview of the current state of the startup ecosystem in Cameroon; next, we put forth strategic actions to enhance the sustainability of Cameroon’s startup ecosystem in the global market, and finally, the conclusion.

A General Overview of the Current State of the Startup Ecosystem in Cameroon

As of 2023, Cameroon’s startup ecosystem is increasingly gaining momentum, driven by a combination of youthful entrepreneurship, a growing digital landscape, and supportive government initiatives. With over 60% of the population under 25 years old, the country presents a robust workforce and an expanding consumer base keen on innovation and technology (3). In recent years, Cameroon’s startup ecosystem has experienced substantial growth, with an increasing number of startups, incubators, and accelerators emerging across the country. According to a report by the Global System for Mobile Communications (GSMA) (4), Cameroon boasts one of the most vibrant startup ecosystems in Central Africa, with a total of 101 technology startups operating in the country.

One of the critical aspects of Cameroon’s startup ecosystem is the emergence of technology hubs and incubators. Fintech represents the most important area of technological innovation in the country. Fintech accounts for about 35% of tech startups in Cameroon and has drawn the greatest investments, especially since 2019. Similar patterns can be seen throughout the African continent. Through $1 million deals, Fintech startups have raised 47% of all funding by African startups since 2019 (5). Nigeria is known for its vibrant tech scene, particularly in the Fintech sector, with the country being home to approximately 24% of all tech startups. This sector is significant, as it attracts around 70% of the total capital raised by these companies. In Kenya, 13 Fintech startups account for 23% of technology startups in the country, and they receive 37% of funding from international and traditional sources. In South Africa, Fintech accounts for 46% of startup funding (6). Meanwhile, in Cameroon, many of the startups are dedicated to addressing local challenges, such as improving access to healthcare, education, and financial services, for example, startups like Healthlane and Ejara (7), a Fintech company that provides financial services to underserved communities. Despite these promising indicators, the startup landscape still faces significant challenges that can impede its growth and sustainability.

Investment in the startup ecosystem has also seen a positive trend. According to the African Private Equity and Venture Capital Association (AVCA), the amount and value of venture capital investments in Africa fell by nearly one-third in 2023 (8). This experience is the first drop in ten years in Africa. The total venture debt in 2023 was 4.5 billion US dollars, 2 billion US dollars less than the year before. In Cameroon, early-stage startups often struggle to secure funding, and venture capital remains relatively scarce in Cameroon compared to other African countries like Nigeria, which has maintained its place as the most active country for startups in the continent for the third consecutive year. There is a need for a more robust venture capital framework in Cameroon to support the sustainable growth of startups in the country.

Strategic Actions to Enhance the Sustainability of Cameroon’s Startup Ecosystem in the Global Market

Cameroon possesses immense potential to become a thriving global hub for startups if it develops a multifaceted approach by implementing strategic actions such as enhancing the regulatory environment, fostering a supportive and strong entrepreneurial culture, improving access to finance, improving digital infrastructure, and building strong partnerships.

A conducive regulatory environment is important for the growth of startups in Cameroon. The absence of a Cameroon Startups Act allows regulatory hurdles and bureaucratic challenges to persist. Easing bureaucratic procedures, providing clear guidelines, and reducing tax burdens by adopting a Startup Act in the country can significantly boost entrepreneurial activities. Streamlining regulatory processes by introducing online platforms for business registration, licenses, and permits can speed up the startup process (9). Regarding tax incentives, giving Research and Development (R&D) tax credits, capital gains tax, and tax break exemptions can boost investment in startups (10). Also, strengthening intellectual property rights protections can be vital to safeguarding innovations and attracting more investors.

Access to financing is a major hurdle for startups. Expanding financing options can propel the growth of Cameroon’s startup ecosystem. For instance, promoting Crowdfunding (raising funds from a large number of people, typically via online platforms) on Cameroon’s platforms, can enable startups to raise more funds from a wider audience (11). Encouraging venture capital firms and angel investors to invest in Cameroon’s startups can provide important capital. Additionally, providing loans, equity investment, and loans by government funding can support early-stage startups in Cameroon (12).

Another strategic action is developing digital infrastructure. A robust digital infrastructure is essential for startups in Cameroon to operate efficiently. Investing in digital skills, cybersecurity, and broadband connectivity can create a conducive environment for innovations. For instance, providing digital skills and training entrepreneurs and employees can enhance competitiveness and productivity. Increasing broadband penetration in rural and urban areas can facilitate online business operations (13). Also, strengthening cybersecurity measures through regular risk assessment and authentication can protect startups from cyber threats (14).

Finally, building strong partnerships among stakeholders: collaborations between academia, governments, and the private sector are important for the success of Cameroon’s startup ecosystem. For instance, fostering collaboration between universities and startups can ease knowledge transfer and technology commercialization (15). Encouraging partnerships between the private sector and the government can leverage resources and expertise. Hence a public-private partnership will be beneficial for startups in the country. Further, building relationships with national and international startup ecosystems can facilitate knowledge exchange and market access (16).

Conclusion

The potential for Cameroon’s startup ecosystem to thrive is considerably high, but it requires focused efforts to overcome existing challenges. The government and stakeholders must prioritize the swift adoption and implementation of the proposed Startup Act to create a more favorable regulatory environment. This includes streamlining bureaucratic processes, reducing tax burdens, and enhancing protections for intellectual property rights. Such measures would facilitate business operations and foster investor confidence, attract more entrepreneurs, and encourage innovations.

Additionally, improving access to funding is crucial. Promoting alternative funding mechanisms like Crowdfunding and venture capital, alongside government-backed loans, can provide essential capital and mentorship for early-stage startups in the country. Implementing these strategic actions will unlock the full potential of Cameroon’s startup ecosystem and will drive economic development and innovations.