* Broad economy base offers potential * Corruption, patronage curb performance * Global crisis to delay investments By David Lewis DOUALA, March 23 (Reuters) - Political uncertainty, restrictive patronage and a global financial crisis are stifling investment in Cameroon, one of Africa's biggest economies, where untapped natural resources offer a wealth of potential. At nearly $25 billion, Cameroon's GDP is higher than Ivory Coast and Ghana, more recognised regional economic powerhouses, and the country is targeting billions of dollars in investment in mining and infrastructure projects as oil revenues tail off. "Cameroon has a diverse economic base, which puts us in a good position. There is no one thing that dominates," said Babissakana, head of Prescriptor, a Cameroonian financial intelligence firm. Rich in oil, cocoa, coffee, cotton and timber, Cameroon enjoyed quarter of a century as one of Africa's most prosperous nations following independence from Britain and France. A collapse in commodity prices, economic mismanagement and an over-valued currency brought this to an end in the mid-1980s. With resurgent mineral prices the government had targeted $10 billion in new mining investments -- until the credit crunch. Nestled on the cusp of West and Central Africa, where neighbours' oil outputs dwarf Cameroon's 90,000 barrels of oil per day but rely on its agriculture, ports and transport networks, the country is a linchpin in the regional economy. "There is an entrepreneurial spirit, but people are not able to exploit this -- the potential is repressed by the political system and a lack of governance that has put personal interests first," Babissakana added. Cameroon regularly comes in high up on lists of the most corrupt nations in Africa while remaining amongst the lowest-ranked on the World Bank's "Doing Business" surveys. The scale of the problem was underscored by this month's arrest of the boss of state airline CAMAIR, who has been charged with stealing 127 billion CFA francs ($265 million). In a country that has more than 230 ethnic groups and boasts its diversity with the phrase, "Africa in one country", analysts say patronage has allowed President Paul Biya to keep most happy and undermine those who aren't and try to oppose him. "Biya has done a very good job of dividing, co-opting and conquering," said a diplomat based in the capital Yaounde. But this has taken its toll as infrastructure remains crippled and outlays for new mining projects are vast. Companies like Hydromines and Rio Tinto have to cost power and transport projects into their mining investments. The global slowdown and the collapse of commodity prices has led to some of these projects being delayed or scaled down and Cameroon's 2009 growth forecast has been slashed to around 4 percent, down from more than 6 percent, as a result. The IMF says 2009 state revenues will fall 2.5 percent from 2008 levels due to lower oil prices, despite moves to increase non-oil revenues. UNSTABLE TRANSITION? Despite higher per capita GDP than countries like Ghana and Senegal, Cameroon lags in sectors like health and education. Social tensions, exacerbated by a combination of high food and fuel prices and Biya's scrapping of presidential term limits, resulted in riots that killed dozens in February 2008. The main opposition Social Democratic Front says tensions are mounting again, largely over complaints that Biya has flouted promises to create an independent electoral body to oversee 2011 elections, which he is now free to stand in. But diplomats say the uncertainty is more likely to focus on whether an ageing Biya will run again for the all-powerful presidency than come from a weak and divided opposition. Donors and analysts say their leverage is limited due to the relatively small proportion of aid in Cameroon's state budget. "The real struggle will go on within the party. With a president who is 76, we are closer to a transition. And transitions are unstable," said another diplomat. "The transition is the unstated problem of the country." Analysts say a younger generation of Biya's party is calling for their shot at power after 27 years under his rule, while the ethnic and regional power balances are also being tested. The focus, says Babissakana, should be elsewhere. "If you put the country in the hands of people with integrity and transparency, Cameroon would take off," he said.
The eyes of a dominant male western lowland gorilla stare at a visitor at the primate sanctuary run by the Cameroon Wildlife Aid Fund in Mefou National Park, just outside the ...
