Panelists at the last edition of the Nkafu Debates have said that Market competition is good for Cameroon’s economy as it encourages innovation and creativity. The panelists for and against were arguing on the motion, “Is Market Competition Good for Cameroon’s Industrialization”?
Main areas of concern included Industrialization, Structural Transformation, Market Competition, Economic Development, International Trade, and Economic Emergence Public Policies.
Dr. Louis Marie Kakdeu, Economist and Policy Fellow at the Nkafu Policy Institute said that market competition is a sector that needs to be regularized by the state to avoid any unfair competition, as he argues for the fact that Market competition is good for Cameroon’s industrialization.
Competition is a major pillar of free-market systems. Competition policy is about applying rules to make sure businesses and companies compete fairly with each other. It encourages efficiency, creates a wider choice for consumers and helps reduce prices and improve quality.
To Chanceline Boutchouang, Economits, Consultant and Researcher said: “Cameroon has to come up with strategies to develop its economy. We have to initiate intelligent protectionism, and organize the economy’s industrialization by sector. The economy should only be opened if strict rules are set,” Boutchouang says in his argument for.
According to liberals, competition is inevitable and good for countries. They believe an important advantage of competition is innovation. Indeed, innovation spurs the invention of new and better products, or it helps to create lower-cost manufacturing processes. As a result, it drives economic growth, creates more employment opportunities and increases standards of living. Another advantage of competition is that of economies of scale and technology transfers. Companies can increase their global presence by operating in more and more overseas markets.
Contrary to the above arguments, protectionists believe competition is not good for an economy. Mr. Rene Mezene, Entrepreneur and CEO at Proxy Services in his argument against said it is not the time for Cameroon to open its market economy because of the reality of the local context. To him, “We do not have the technical capacity to open our market frontiers to competitors.”
The point of view was supported by Dr Lamine Himbe, Civil Administrator and Researcher at MINDMIT, in his stance against market competition being good for Cameroon’s industrialization. According to him: “Competition becomes complex in International market because it is difficult to input measures to protect weaker countries.”
According to protectionists, small companies do not have all the extra benefits or capital to expand and outsource like large companies. In addition, protectionists argue that competition decreases market share and shrinks customer base, especially if demand for products or services is limited from the start.
In 2019, the government of Cameroon has drafted the National Strategy for Development 2020-2030. This strategy lays more emphasis on industrialization and the structural transformation of the economy. Indeed, the secondary sector is only 15.6% of companies while the tertiary sector represents 84.2% of companies according to the second General Census of Companies (2016). Also, small businesses dominate the economic fabric in Cameroon as they represent 98.5% of the total of companies.
However, Cameroon faces major structural challenges and negative shocks including an alarming poverty level, government remaining the largest employer, the worsening security situation in the North West and South West Regions, the conflict with Boko Haram in the North Region, and the recent currency crisis as a result of excessive imports. In addition, small businesses in Cameroon face major obstacles that prevent them from growing. These obstacles include high tax rates, financial exclusion, and corruption.