Outsourcing in Cameroon is gradually becoming a positive trend. Whilst it is currently not given the attention it deserves, it is one of the leading strategies for business growth in Cameroon. Key sectors leading in outsourcing include healthcare, telecommunications, banking and energy. When companies expand, they outsource some of their activities so as to focus on the core activities that makes the company vibrant; in other words, income-generating departments. This helps to lower cost and maximise profit.
The most outsourced IT services in Cameroon include:
Key market developments linked to IT outsourcing in Cameroon are as a result of the digitalisation and risk attached to businesses. These developments could either be direct or indirect. There are quite a number of benefits that come with outsourcing, some of which include the following.
The outbreak of the COVID-19 pandemic in Cameroon forced businesses to innovate in order to cope with the pandemic. Outsourcing became one of the best solutions for businesses as working remotely has become a norm for most businesses. Even the most conservative businesses believe the importance of physical proximity is gradually shifting and are becoming accustomed to the virtual working space.
The government of Cameroon has contracted with Brazil for an extension of its fibre-optic network in a bid to increase IT performance through its parastatal (CAMTEL) scheme. With an increase in businesses working remotely, reliable and flexible IT systems are required.
Cameroon is fast becoming an attractive haven for business process outsourcing (BPO), predominantly because BPO is supported by the government. Foreign companies that outsource their services to Cameroon attract government incentives and can take advantage of the low labour cost. Cameroon being a bilingual country, with English and French as its two main languages, makes it an easy and flexible location for foreign investors.
The government of Cameroon is clear on its policies to attract investors and as such has enacted laws and specific investment regulations which offer incentives for the retention of investors. Agriculture, technology and energy are the sectors with the most incentives as per the government’s plan of action.
The BPO industry is part of the government’s strategy to attain emergence by the year 2035. The selection of Cameroon as host of football's African Cup of Nations, to begin in February 2022, can also be seen as a major factor encouraging BPO by foreign investors in the country.
Prevalent BPO Sectors
The most commonly used BPOs in Cameroon are:
Outsourcing in the healthcare sector has witnessed a massive increase during the COVID-19 period. The demand for BPO has grown on a daily basis since the advent of COVID-19 as more recent and innovative services are introduced and businesses seek an edge over competition in the prevailing environment. The Cameroonian population has welcomed BPO as an alternative to labour migration.
BPO organisations are most suitable to be used by departments that are primarily cost centres and not revenue generators for the company.
New technologies such as blockchain, AI robotics and smart contracts are gradually gaining ground in Cameroon. They are being explored in areas such as telecommunications, financial transactions, logistics and data protection. In the logistics sector, for example, the first wave of automation using robotics arrived in Cameroon courtesy of the logistics industry. It was introduced in Cameroon by DHL. Logistics industry players, from traditional warehousing to new e-commerce start-ups, are moving towards automated processes to cut cost and meet growing customer demand. The use of blockchain technology has made the supply chain system faster, with cheaper deliveries, better traceability of goods, internal error minimisation, transparency for social responsibility, high protection against cyber-attacks through decentralised storage, high automation potential and easier access to financing.
Blockchain technology is growing at a very fast rate and it is possible to integrate it with other systems such as robotics AI services. This is still a recent field and it is not yet clear what such technology might become and the extent of its impact. There is no specific law governing blockchain in Cameroon, there are industry specific regulations such as telecommunication regulations that go a long way to regulate blockchain activities in Cameroon.
Today, financial institutions are trying to adopt innovative and high-speed financial standards for the public. According to reports from the Ministry of Finance of Cameroon, more than 76% of the population rely on less conventional methods of banking (fintech).
With the advent of COVID-19, many people switched to using mobile devices for financial transactions, with mobile money and e-wallets being the most used.
These are intelligent contracts based on blockchain technology. They are usually digitally verified without the use of a third party such as a lawyer or a notary. The advantages of smart contracts are that they are secured through cryptographic encryption methods, while automation leads to higher efficiency with time and cost savings. Manual error sources can also be eliminated in smart contracts as processing is done without human intervention. Smart contracts are currently being used in the energy industry, the healthcare industry and many more. In general, the future of smart contracts looks promising as it is associated with blockchain technology.
Generally, there are no regulations in place when it comes to outsourcing in Cameroon. However, Law No 92/007 of 14 August 1992 (the "Labour Code") contains provisions which regulate employment relationships. It allows employers to recruit through recruitment agencies.
There are industry-specific regulations which specify the kind of services to outsource and to whom such services can be outsourced (see 2.2 Industry-Specific Restrictions).
The 1992 Convention on the Harmonization of Banking Regulations in the Central African States puts forth in its Article 24 that “It is prohibited for any person other than a credit institution from carrying out banking transactions on a regular basis’’. This therefore limits the outsourcing of financial services. Non-banking institutions are prohibited from outsourcing banking activities. Server management, infrastructure solutions, network administration and software development are the most common functions outsourced by banks.
Parties to an outsourcing contract are required to respect the sector-specific regulations such as requirements for licences, permits or approvals which regulate the activity in question. Some regulated sectors in Cameroon include forestry (the Ministry of Forestry), mining (the Ministry of Mines), banking (COBAC Regulations), telecommunications (the Telecommunications Regulatory Agency).
Legal provisions regulating data protection in Cameroon are found in several laws for there is no specific data protection law that has been adopted. The laws relating to data protection more often than not covers data relating to electronic communication. There are limited enactments as to the protection of personal data. The preamble of the Cameroonian constitution (Law No 2008/001 of 14th April 2008) states:
Data protection is therefore a right enshrined in the constitution.
The laws applicable to data protection include:
Generally, data must be processed so as to protect the privacy of its users. Every individual has a right to the protection of their privacy as per Article 41 of Law No 2010/012 of 21 December 2010 relating to cybersecurity and cybercriminality. Judges may take any protective measures, notably sequestration or seizure, to avoid or stop the invasion of privacy.
Article 42 of the same law requires that content providers be responsible for information transmitted through their information systems, especially if such content may entail infringement of human dignity, injury to character or invasion of privacy.
The core rules involving data protection in Cameroon are privacy, confidentiality and non-interference of data via information systems.
Within the banking sector, sanctions for the violation of banking secrecy are provided for by the Law on Banking Secrecy in its Article 26. Anyone who violates banking secrecy shall be punished by an imprisonment term of three months to three years and/or a fine of XAF1 million to XAF10 million. If the said offence is committed through the press or a computer network, it shall be doubled.
Article 32 of the Law on Financial Markets sanctions any person who fails to provide equal information and equal fair treatment to investors. The sanctions include a fine ranging between XAF500,000 and XAF5 million or suspension or withdrawal or the approval.
Health and Pharmaceuticals Sector
Article 310 of the Penal Code provides that whoever, without permission from the person interested in secrecy, reveals any confidential fact which has come to their knowledge or which has been confided in them solely by reason of their profession or duties shall be punished with imprisonment from three months to three years and a fine from CFA20,000 to CFA200,000.
In addition, Article 48 of the Law on Medical Practice provides for a reprimand, suspension of activity ranging from three months to one year depending on the seriousness of the fault committed, and removal from the roll of the Doctors Council.
Where an amicable settlement between the concerned parties cannot be reached, the parties should refer to ANTIC. If the decision rendered by ANTIC is not satisfactory, parties can then seek relief before the courts.
Section 61(1) of the Law on Cybersecurity and Cybercriminality states that “Agency personnel and experts of corporate bodies in charge of security audits who without any authorisation, disclose confidential information which they are privy to on the occasion of a security audit shall be punished with imprisonment for from three (3) months to three (3) years and a fine of from 20,000 (twenty thousand) to 100,000 (one hundred) CFA francs”.
A breach of the Law on Cybersecurity and Cybercriminality gives the judges the power to take protective measures, which may include sequestration and seizure.
When a service provider is not compliant with the law on data processing or data security, the Regulatory Agency in charge may, after serving a warning on the structure for comment, prohibit the circulation of the means of cryptography concerned.
The law does not provide for any specific contractual provisions to be included on data security. However, in order to comply with the laws in place, certain provisions must be included in standard contracts, some of which are:
There is no standard supplier customer model for contracts in Cameroon. The law demands that contracts be fair for both parties and void of any illegalities. Different industries use different contract models for their outsourcing services.
Companies may opt for a particular contract model depending on the number of parties and their liabilities as well as the contract's worth in terms of finance. A parent company may negotiate the terms of contract and also stand as guarantor for its subsidiary companies but the subsidiaries are expected to sign on their behalf.
There are alternative contract models used in the Cameroonian jurisdiction. These contracts are formed based on the specific need and sector. Joint venture agreements (JVs), build operate and transfer arrangements and public-private partnership arrangements (PPPs) are some of the alternative models.
PPPs in Cameroon are regulated by the Public Contract Regulatory Agency. The Cameroonian government uses PPPs in areas such as transport, energy, urban development and the agro-food industry. The selection of private sector parties' participation in PPPs is through a public offer and by a competitive bidding process. A committee is set up to oversee the transparency of the entire process and for the most efficient and cost-effective bidder to win. Contracting parties in PPPs must comply with the procurement procedures in place to the letter.
In some cases, the type of contract may be specified by legislation. The OHADA Uniform Act on Companies and Economic Interest Groups provides that foreigners can participate in a company in Cameroon by meeting the shares requirement and obtaining the required permits.
Captive centres are wholly owned subsidiaries of parent companies which are located in a jurisdiction other than that of their parent companies but provide outsourced services to the parent companies.
Shared services refers to the centralisation of several functions from various departments of an organisation formally performed in different locations or divisions.
Captive centres and shared services are not very common in Cameroon.
Customer protections are governed by Law No 2011/012 of 6 May 2011 on consumer protection. This law governs all transactions relating to distribution, sale, supply, exchange of technology, goods and services.
The transactions referred to above concern, in particular, the sectors of health, food, water, housing, education, financial services, banking, transport, energy and communications.
Consumer Protection Principles
The above law prescribes a series of principles which go a long way to protecting the interest of consumers:
Remedies Accorded to Consumers
Consumers can approach the competent courts for the protection of their contractual rights. Actions brought in by the consumer can either be preventative or reparatory.
In any consumer protection proceeding, the burden of proof to the contrary of the alleged facts rests with the seller, supplier or service provider.
Within the framework of consumer protection, an appeal committee is created at the level of each sub-division (District), the mission of which is to ensure the public service of arbitration of disputes relating to consumer protection.
Parties to a contract under Cameroonian law can generally terminate a contract when there is a material breach of a covenant in the contract. Contracts generally end when the objectives for which the contract was designed have been attained, when the duration of the contract expires, by a request from either party or both parties, or by operation of the law.
There should always be an exit plan included in contracts which permits the parties to terminate the contract should there be a breach. Some provisions for termination are:
Contracts are governed by the terms the parties insert therein. Parties to a contract personally decide on the terms they wish to be governed by. The liabilities of the parties here is determined in the contract.
When there is a loss, the party that suffered the loss can opt for an injunction, specific performance or for the payment of damages.
Under Cameroonian law, damages in contracts are as of rights; meanwhile, specific performance is granted at the court’s discretion.
This is a loss which occurs as a natural result of a breach and in the normal course of business. It is the natural result of a breach. Direct loses are recoverable under Cameroonian law.
This is a loss that occurred as a result of an unforeseeable circumstance. Such losses do not occur in the ordinary course of business.
Loss of Profit and Goodwill
If the loss of profit is as a result of a breach of contract, then the court will compensate the plaintiff if it is established that the loss was as a result of certain expenses incurred in anticipation of the defendant’s performance of the contract.
Cameroonian law guards against unfair competition, especially when it damages the goodwill of another company.
A person who has been damaged by an act of unfair competition can go to court under the common law and seek for the following remedies:
These are terms that are construed to have been settled before a contract is established. There must be an offer and an acceptance, consideration and legal capacity to contract. Furthermore, both parties must have mutual assent and fully understand their rights.
Article 1108 of the Civil Code enumerates four conditions that must be met by the consumer for the validity of a contract.
The courts of Cameroon recognise both implied and express terms in contracts. Customs and usages of the particular sector are also taken into consideration when interpreting contracts.
Employment relations in Cameroon are governed by Law No 92/007 of 14 August 1992, known as the Labour Code. The relationship between an employer and an employee as stipulated by the Labour Code is guided by a contract of employment. A contract of employment defines the terms under which the employer and the employee operate. Both parties freely determine what should be the basis of their relationship.
With regard to employee transfer, it is often stated in the contract, especially when the transfer involves outsourcing. The employee may move away from their usual location of work for the purpose of the outsourcing services and may even work at the offices of the contracting company but remain an employee of the parent company (employer). Here, the outsourcing contract is between the two companies and, as such, the status of the employee remains unchanged but for their work location.
When the outsourcing results in employee transfer, the law provides for compensation for displacement.
The law recognises the rights of workers, without distinction whatsoever, to set up freely and without prior authorisation associations for the study, defence, promotion and protection of their interest, particularly those of an economic, industrial, commercial or agricultural nature and for the social, economic, cultural and moral advancement of their members.
Though labour relationships are governed by a contract of employment, there are situations under Cameroon law whereby for the employer to make certain decisions, the trade union is consulted a priori. In situations where the outsourcing will have a general impact on the employees, then the trade union will have to be consulted, for the union is the body that represents the employee as one voice.
Outsourcing does not automatically lead to the transfer of employees. It is not compulsory for employees to be transferred based on an outsourcing contract. The transfer of employees in an outsourcing is generally a matter of negotiation between the parties. The customer may require key employees of the supplier to be retained for a minimum term during the pendency of the outsourcing contract.
Employee transfer is generally based on the needs of the company at a particular time. Companies may transfer their employee either for a short- or long-term basis.
If the health of an employee is an issue, then they could be transferred to a branch office, whereby the health needs of the said employee could be met.
Employees can be transferred based on their expertise and company needs.
In every outsourcing contract, the transfer of assets could either be determined implicitly or expressly. Assets to be transferred are either movable or immovable assets. Usually, there are various requirements regarding the transfer of assets which must be met for the transfer to be valid. Certain guarantees are usually required for an effective transfer depending on the type of asset, the state of the asset and title to be transferred.
Due diligence is usually advised to be carried out before any such transfer is done so as to be sure of title, especially with regard to immovable assets. The assets transferred must be indicated in the contract and described appropriately as they are. Most often, the transfer of assets is included as a clause in the contract but where there are a lot of assets to be transferred, it could be mentioned on the contract and a separate document prepared for the transfer purpose.
Transfer of Movable Assets
With regard to movable properties, the parties are at will to fix the terms of transfer, from duration to the price, state of repairs and so on. It is recommended that the parties put down the terms in a written document, especially when it is for a long duration. Leases are usually for a duration of three years and above, and, as such, the lessee cannot sublet without the express permission of the lessor.
Transfer of Immovable Assets
The transfer of immovable assets in Cameroon must be done and authenticated by a notary public. A deed of conveyance is prepared which serves as the instrument of transfer. Stamp duties are required for the transfer of land and landed property and the amount to be paid as stamp duty varies with the towns, purpose of the property (use) and the strategic positioning of the property. Properties in the suburbs have lower stamp duties and value as compared to properties in the commercial areas.
Immovable assets can be transferred to a foreigner provided the foreigner meets the requirements provided for in the regulations in place.
More often than not, customers prefer to lease their licence rather than total transfer. According to the Bangui Agreement of 14 December 2015, the rights subsisting in a licence shall be transferable in whole or in part. They may be assigned under an exclusive or non-exclusive licence. It further requires all transfers or licensing to be evidenced in writing. For it to be enforceable against third parties, it must be recorded in the special register accordingly.
COVID-19 and the Rise of Outsourcing in Cameroon
The ever-growing business environment in Cameroon, especially with the advent of the COVID-19 pandemic, has led to an increase in outsourcing in the country. Sectors such as telecommunications, banking, healthcare, information technology (IT), accounting services and even oil and gas have experienced a substantial upward trend in outsourcing in order for them to:
COVID-19 took the world by surprise and most were unprepared for its devastating impact on business across the globe. This has had a significant impact on how and where work is done and what businesses now focus on.
All industries experienced change. Some have seen growth, with a significant rise in business and market valuations; others have faced intense difficulties and dramatic falls in revenue. The shared services and outsourcing sectors have experienced gains amidst the uncertainty. Before the pandemic, most projections indicated a slowdown in outsourcing activities as a result of the emergence of artificial intelligence (AI) and automation, especially for outsourced customer service functions. COVID-19 has changed all of that for the shared services and outsourcing sector.
The outbreak of COVID-19 brought about so many changes in the functioning of businesses. However, some trends were developed in a bid to cope with the devastating effects of the pandemic. Below are some of those trends.
Remote working has become a trend in Cameroon with the outbreak of COVID-19, so much so that most companies and even the government have put in measures for workers/employees to work from home. Remote working arrangements are taking the centre stage especially as the fight against COVID-19 continues. Though it is greatly applauded in Cameroon, outsourcing arrangements need to be specific, with clear information security measures, especially when they concern data and monitoring the output of workers.
Businesses in Cameroon are tilting towards providing clients with more efficient and value-added services, and outsourcing stands out as a means of attaining these goals in the Cameroon contemporary business environment. The trend in achieving this is for companies to acquire optimised processes, especially high-speed internet and highly qualified professionals, in the domain concerned.
Human resource (HR) outsourcing
When talking of outsourcing in Cameroon, HR outsourcing stands out as the most outsourced service. It is most desired for cost reduction, and the use of top-notch professionals without having to put them directly on the company’s payroll. The cost of having specialists as employees is usually way too high as, most often, they are paid for their time spent in doing the job. Most skilled personnel prefer working as freelance agents, especially IT experts, as it permits them to have total control of their time.
Furthermore, outsourcing HR services does not require the training of new staff or the provision of office space and equipment. Usually, these costs are very high and companies see this as a short cut to overcoming such expenses.
Registering employees with the National Social Insurance Fund (CNPS) and other mandatory requirements put in place by the government is time consuming, difficult and, above all, costly.
Generally, specialists have better understanding of their field and also when it comes to legislation governing the sector, especially concerning issues such as labour, employment and immigration law. They master what it takes to propel a business forward and based on experience, they can best know how to advise in various business situations. Outsourcing HR services permits companies to focus more energy on revenue-generating tasks, controls costs, saves time, and helps to attract qualified employees.
Outsourcing accounting services
Accounting services are highly outsourced in Cameroon. This is principally due to the complexity and legal regulations put in place. Some of the leading accounting service firms in Cameroon include Mazars Cameroun, AML Consulting, PricewaterhouseCoopers, and Ernst and Young. These firms specialise in the provision of top-notch accounting and related services. They integrate technology into their day-to-day activities, especially as they make use of accounting software.
A variety of companies provide software support for accounting services, HR and payroll. These companies provide software to micro-, small- and medium-sized companies as well as large integrated companies.
Outsourcing IT security
IT security is a priority area for most businesses in Cameroon, especially when it concerns the financial sector. Banks, professional services, healthcare and even government agencies and departments are the most prevalent actors that outsource IT services.
Regarding data protection in Cameroon, there is no specific law, but separate regulations provide guidelines and sanctions on data protection. From a general perspective, these regulations serve as a reference for data protection in Cameroon. The right to privacy stems from the Cameroonian constitution, Law No 2010/012 of 21 December 2010 on Cybersecurity and Cybercriminality in Cameroon (the "Cybersecurity Law") and Law No 2010/013 of 21 December 2010 Regulating Electronic Communications in Cameroon (the "Electronic Communications Law") are the different statutes with provisions on regulations governing IT services in Cameroon. Everyone responsible for the provision of IT services and use of personal data must ensure the data is used fairly, lawfully and transparently.
Companies outsource their IT services mainly for security purposes, especially as the Cameroonian business environment today is reliant on new technology. This new technology comes with security threats, such as malware, bugs and viruses which can cause the damage and loss of data.
Web development and other related activities such as website hosting and website maintenance are outsourced to a great extent by both small and large companies in Cameroon.
Social media marketing is currently the most used form of marketing in Cameroon, especially within small- and medium-sized enterprises. This is predominantly because it is less costly in comparison to conventional marketing strategies. Small business owners can, from the comfort of their phones and computers, market their products with less stress. An increase in the fibre-optic infrastructure by the government has greatly boosted this new marketing strategy due to fast and reliable internet connections.
Public sector outsourcing
The government of Cameroon has recently been spending more on technology-related activities so as to attract foreign investors and thereby boosting the economy to attain emergence by the year 2035 ("Vision 2035"). Foreign participation in outsourcing is increasing rapidly, especially in the IT sector as most foreign companies tend to outsource their IT needs for safety and efficiency.
Procurement in Cameroon usually occurs through a tendering or a competitive bidding process. Public procurement and government contracts in Cameroon are regulated by Decree No 2018/366 of 20 June 2018 relating to the Public Contracts Code. Public procurement and government contracts in Cameroon are subject to bids from all companies that are eligible. Such companies must be duly registered and in compliance with the regulations in place.
Public-private partnerships (PPP) are another trend in Cameroon whereby the government gives out projects to private companies in a bid to increase efficiency and gain in time. Large infrastructure projects completed through PPP include highways and ports.
Looking at the current trends in public sector outsourcing, they are expected to continue with government support and technological advancement, especially in the IT sector.
The impact of COVID-19
Outsourcing in general
The advent of COVID-19 has forced business owners to accept a new reality and try to put in place innovative strategies to cope with the pandemic. Outsourcing is one of the sectors most affected by the pandemic, but this time it could be looked at from a positive angle.
Many companies have been closed down, particularly those whose activities cannot be favoured by remote working. Companies have tended towards outsourcing at least some of their activities, such as IT, accounting services and payroll, in order to avoid crowded workspaces and avoid the spread of the virus.
Lockdowns, fear and uncertainty directly affected the demand and supply chain. Since Cameroon is an active actor and extremely dependent on globalisation, it is obvious that the impact of COVID-19 was acute, especially in the economic sector.
Another sector that was hard hit was the pharmaceutical and healthcare sector. This was principally because 90% of pharmaceutical products in Cameroon are imported and with the lockdown caused by the pandemic, the supply chain of these products was affected.
As organisations pivoted their business models to stay afloat, many took the step to outsource non-core functions to sustain operations. The retail sector, for instance, shifted more towards e-commerce, tapping into the outsourcing industry’s online retail and logistics support services.
The pandemic has made businesses rethink and re-evaluate the principles behind the outsourcing operating model in Cameroon – which is built on cost management and efficiency. It offers cost savings by leveraging the relatively cheaper labour markets available, and technology-enabled systems for more convenient service delivery. The ease of implementing a distributed and flexible workforce, which has always been at the very heart of the outsourcing sector, proved critical at the peak of the pandemic and has now become the new normal for many industries.
The impact of COVID-19 has made businesses from small- and medium-size enterprises to large multinational companies re-evaluate the disruptions caused and focus on technology (digital infrastructure) in order to enhance their business efficiency.
The outcome of this is seen as more companies have resolved to focus on technology-driven activities and simultaneously increase outsourcing activities.