Cameroon's Opaque Electoral Process and Its Impact on Sovereign Risk and Foreign Investment

Cameroon's 2025 presidential election has become a litmus test for the resilience of its political and economic systems. The disqualification of Maurice Kamto, the leading opposition candidate, by the electoral commission has exposed the fragility of the country's democratic institutions and raised urgent questions about its long-term investment climate. The implications of this crisis extend beyond domestic politics, casting a shadow over Cameroon's sovereign risk profile and deterring foreign capital in a moment of critical economic transition.

The Legitimacy Crisis: A Political Rubicon

Kamto's disqualification under Article 121(1) of the Electoral Code—citing his party's lack of parliamentary representation—has been widely perceived as a calculated move to suppress dissent. The ruling party, RDPC, has entrenched itself in key institutions, including the judiciary and electoral commission, enabling what critics term “lawfare” to neutralize opposition. The Constitutional Council, tasked with reviewing such decisions, has historically rubber-stamped ELECAM's rulings, raising doubts about the election's legitimacy.

This maneuvering has fractured the anti-Biya opposition vote, with Kamto's absence leaving a vacuum filled by smaller, less cohesive candidates. The result is a political landscape where President Paul Biya, Africa's longest-serving leader, faces no credible challenge. Yet, the absence of a fair electoral process risks alienating a population already weary of entrenched corruption and economic stagnation. Protests, such as the #KamtoOut demonstrations in Douala, underscore a growing distrust in the system, while the diaspora's threats to boycott overseas polling further erode confidence.

Sovereign Risk: Between Stability and Volatility

Cameroon's credit rating, currently at 'B-/B' with a stable outlook (S&P Global), reflects a delicate balance between economic resilience and political fragility. The country's GDP is projected to grow at 4.3% annually through 2028, driven by natural gas and mining expansion, infrastructure projects like the Nachtigal hydroelectric dam, and cocoa exports. However, these gains are offset by structural vulnerabilities: declining oil production, a public debt-to-GDP ratio of 64%, and the looming threat of climate-related shocks.

Fitch Ratings has highlighted the 2025 election as a key downside risk. Social unrest, fueled by demands for electoral transparency, could disrupt infrastructure projects and deter private investment. For instance, the Kribi port expansion—a $1.2 billion endeavor—relies on stable security conditions to attract foreign capital. Delays or cancellations in such projects could strain Cameroon's fiscal consolidation efforts and exacerbate its current account deficit.

Investment Climate: A Calculated Gamble

Foreign investors are now faced with a stark choice: bet on Cameroon's long-term potential or avoid its short-term instability. The Anglophone crisis, now in its ninth year, remains a persistent threat. Separatist violence in the Northwest and Southwest regions has displaced over 900,000 people and disrupted supply chains. Meanwhile, Boko Haram's drone attacks in the Far North and ethnic clashes in the East compound security risks.

Despite these challenges, certain sectors offer relative resilience. Agriculture, particularly cocoa and coffee, remains a growth driver, supported by elevated commodity prices and government incentives. Infrastructure projects, including the Nachtigal dam and Kribi port, are backed by state guarantees and Chinese financing, making them attractive to risk-tolerant investors. However, the Anglophone regions remain a red zone, with high operational costs and political uncertainty.

The World Bank has warned that 8 million Cameroonians could fall into extreme poverty by 2026, signaling a socio-economic crisis that could deter long-term investment. Yet, the government's fiscal discipline—reducing fuel subsidies and narrowing the budget deficit to 1% of GDP—provides a degree of macroeconomic stability. This duality creates a paradox: Cameroon is both a high-risk, high-reward market and a country with untapped potential.

Strategic Implications for Investors

For foreign capital to thrive in Cameroon, a nuanced approach is essential. Investors should prioritize sectors insulated from political volatility:
1. Agriculture: With 40% of the population dependent on farming, Cameroon's agricultural sector offers stable returns, particularly in cocoa and cashew.
2. Infrastructure: State-backed projects like the Nachtigal dam and Kribi port expansion are less exposed to political shifts and offer long-term yields.
3. Renewable Energy: The government's push for hydroelectric and solar power aligns with global decarbonization trends and attracts green investment.

Conversely, investors should avoid the Anglophone regions and projects reliant on short-term political stability, such as tourism and extractives in conflict-prone areas.

Conclusion: A Crossroads for Cameroon

Cameroon stands at a crossroads. The disqualification of Kamto and the erosion of electoral legitimacy have underscored the fragility of its political system. Yet, the country's economic fundamentals—anchored in infrastructure and commodity exports—remain compelling. For foreign investors, the challenge lies in navigating this duality: balancing the risks of political instability with the rewards of a market on the cusp of transformation.

The coming months will test Cameroon's ability to reconcile its democratic deficits with its economic aspirations. If the government fails to address governance gaps and institutional corruption, foreign capital will continue to flee. But if it can stabilize the political climate and enforce reforms, Cameroon's strategic location and resource wealth may yet attract the investment needed to fuel a new era of growth.