Enhancing SME development in Cameroon: Evaluating Government support program

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Small and medium-sized enterprises (SMEs) are the backbone of the Cameroonian economy, accounting for over 90 percent of all businesses and over 70 percent of the employment force. However, SMEs in Cameroon face several challenges, including access to finance, markets, and skills training. These challenges hinder growth and the ability to contribute to economic development. According to the World Bank 2022 report on the state of SMEs in Cameroon and a Dalberg report of 2011 on the impact of government support programs on SMEs in Cameroon, the government of Cameroon has many support programs put in place to ensure the growth and sustainability of SMEs. But the question lies with the effectiveness and good coordination of these programs. These initiatives haven’t worked as well as they could have. It is important therefore to examine the extent to which government support programs improve entrepreneurship in Cameroon. This study looks at how the government would promote small and medium-sized enterprises (SMEs) in Cameroon and how that could help the nation’s entrepreneurial growth. This article conducts a comprehensive examination of government support programs for SMEs, encompassing a comparative analysis of global initiatives, a situational analysis of current programs, an evaluation of their effectiveness, an exploration of successful programs in Cameroon, and strategic policy recommendations.

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Basic - INTRODUCTION Small and medium-sized enterprises (SMEs) are the backbone of the Cameroonian economy, accounting for over 90 percent of all businesses and over 70 percent of the employment force. However, SMEs in Cameroon face several challenges, including access to finance, markets, and skills training. These challenges hinder growth and the ability to contribute to economic development. According to the World Bank 2022 report on the state of SMEs in Cameroon and a Dalberg report of 2011 on the impact of government support programs on SMEs in Cameroon, the government of Cameroon has many support programs put in place to ensure the growth and sustainability of SMEs. But the question lies with the effectiveness and good coordination of these programs. These initiatives haven’t worked as well as they could have. It is important therefore to examine the extent to which government support programs improve entrepreneurship in Cameroon. This study looks at how the government would promote small and medium-sized enterprises (SMEs) in Cameroon and how that could help the nation’s entrepreneurial growth. This article conducts a comprehensive examination of government support programs for SMEs, encompassing a comparative analysis of global initiatives, a situational analysis of current programs, an evaluation of their effectiveness, an exploration of successful programs in Cameroon, and strategic policy recommendations. A Comparative Analysis of Global Government Support Programs. In a comparative analysis of global government support programs, notable success stories emerge from countries like Singapore, Hong Kong, Uganda, and Morocco. Singapore’s comprehensive initiatives, encompassing loans, tax breaks, mentorship programs, and extensive market access, have contributed to a sustained annual growth rate of 6 percent in SMEs over the past decade. Hong Kong, a global financial hub, attributes its flourishing SME sector to strategic support mechanisms, resulting in a remarkable 7 percent annual increase in SME turnover. In Uganda, the focus on entrepreneurship and agribusiness, coupled with government-backed initiatives like loans and tax breaks, has led to a commendable 10 percent annual growth in SMEs, particularly in the agriculture sector. Meanwhile, Morocco’s success in boosting SMEs lies in sector-specific programs, with an impressive 8 percent annual growth in industries such as textiles, automotive, and renewable energy. The statistical evidence of sustained SME growth in these countries serves as a compelling blueprint for Cameroon, suggesting that adopting similar multifaceted strategies, tailored to its unique context, could foster increased job creation, economic stability, and sector-specific resilience. Through the establishment of a pro-SMEs environment, promotion of innovation, facilitation of capital acquisition, establishment of links with overseas markets, financing of sector-specific initiatives, and provision of comprehensive support services, Cameroon can leverage the knowledge base of these other countries to accelerate the growth of SMEs and economic development. Situational Analysis of Government Support Program The future of government support for SMEs in Cameroon is uncertain. There are various thoughts around the question of supporting SMEs. Some contend that the government need to assist SMEs more, while others advocate for the government to adopt a more detached stance. Those who argue that the government should do more to support SMEs point to the fact that SMEs are the backbone of the Cameroonian economy and that they need support in order to grow and be competitive both in the national and international market. SMEs play an important role in the economy, and they can create jobs and boost economic growth. Support from the government can assist SMEs in overcoming some obstacles, like difficult and time-consuming administrative processes and limited access to markets and financing. They contend that through easing access to capital, markets, and skill development opportunities, the government may contribute to the provision of this support. On the other hand, there is a claim that excessive government backing to SMEs will result in moral hazard because companies may become less risk-averse and incur more debt as a result of the assurance that the government will support them in the event of their failure. In a situation where the Government supports the market by giving SMEs an unfair competitive edge over larger enterprises, raising consumer prices, and reducing competition, leading to the wasted use of resources, increasing public debt, and market distortion. To determine what challenges SMEs are facing and how effective the current government support programs have been, we need to take a closer look at them and what steps might be taken to make things better. The Agency for the Promotion of Small and Medium-Sized Enterprises was established to strengthen the managerial capabilities of SMEs in Cameroon. The Ministry of Agriculture and Rural Development runs the Program for the Improvement of the Competitiveness of Family Agricultural Farms (ACEFA), which offers farmers resources, training, and mentorship to expand their businesses. Other support programs include the Young Entrepreneurs Mentor-ship Program of the National Employment Fund, which is designed to encourage youths to pursue entrepreneurship. The main recipients of this program are Common Initiative Groups; cooperatives that grow cocoa and coffee; and unions that work in rural areas in the livestock and fisheries industries. Additionally, Cameroon’s Minister of Finance established the State Guarantee Fund on July 17, 2023, outlining the requirements for approving and carrying out the state guarantee for public institutions. as well as private and public businesses, for domestic loans during the 2023 fiscal year.