Written following participation in the Private Sector-Led Forum organised by Access Bank, Cameroon, on the sidelines of the 14th WTO Ministerial Conference, Palais des Congrès, Yaoundé – March 2026.
Cameroon’s hosting of the WTO Ministerial Conference marked a pivotal point of convergence, calling for prompt, coordinated action from policymakers, financiers, entrepreneurs, and legal practitioners as the continent’s economic landscape rapidly transforms. The mood at the Private Sector-Led Forum was clear: the time for structural repositioning is now.
At the centre of these discussions was a key question: How does Cameroon urgently transition its large informal economy to participate meaningfully in a rules-based continental and global system? This article distils those discussions into a systematic legal and economic perspective, informed by data, regulatory structures, and focused on practical reforms.
An Economy Operating Outside Its Own Legal Framework
The informal economy is the norm in Cameroon. The International Labour Organisation and the National Institute of Statistics estimate that nine out of every ten working individuals operate in the informal economy. This segment generates 50–60% of GDP but less than 3% of tax revenues.
EESI 2 data from INS shows about 2.5 million informal enterprises outside agriculture. The ratio of formal to informal enterprises is 1:25. These informal enterprises generate an average annual value-added of CFAF 1.15 million and are mostly subsistence-based. They face limited productivity, lack collateral, and cannot access formal financing.
Informality is often not a deliberate choice. Survey data shows that 27% of informal operators did not know that registration was required, and 45% did not understand that it was mandatory. This reveals shortcomings in access, awareness, and perception of the formal system. The economy is very active and entrepreneurial but is excluded from legal and financial systems that enable scaling.
AfCFTA and the Legal Threshold for Participation
The African Continental Free Trade Area reorganises the African economic space. Its legal framework covers tariff liberalisation, investment protection, dispute resolution, and digital trade, to support cross-border integration with predictability and transparency.
This legal structure assumes all participants have legal personality. The AfCFTA Protocol on Investment requires State Parties to guarantee transparency, facilitate investment, and provide access to dispute-resolution mechanisms. These protections do not extend to informal enterprises.
This creates a structural asymmetry that cannot be ignored. Informal operators are already engaged in cross-border trade, often navigating regional markets competently. Yet they lack enforceable contractual rights, access to formal trade finance, or the ability to rely on dispute-resolution frameworks. As intra-African trade expands, as projected by the IMF, the benefits will rapidly flow to formal actors, threatening to leave informal operators dangerously marginalised within the system they helped sustain.
Why Formalisation Has Stalled
The persistence of informal activity is not simply due to weak enforcement; it is a rational response to an increasingly unsustainable environment for micro-enterprises. Without urgent change, the cycle will only worsen.
For micro-enterprises at the subsistence level, the costs of formalisation, including registration, taxation, compliance, and social contributions, often exceed their turnover. Here, informality stems from economic rationality rather than non-compliance.
Taxation structures mean that a few formal enterprises pay most of the taxes. Informal operators see formalisation as increased fiscal exposure rather than an opportunity. The fear of over-taxation at the forum is not just psychological; it is based on experience.
Access to finance keeps the cycle going. Most registered SMEs still struggle to secure structured financing. For informal enterprises without legal identity, financial records, and collateral, the exclusion from the financial system is compounded. Many remain informal as they cannot access the tools needed for formalisation.
The Legal Framework: Comprehensive but Incomplete
Cameroon’s legal ecosystem is sophisticated. Membership in OHADA brings harmonised rules for company formation, commercial transactions, securities, and insolvency. The OHADA Uniform Act simplifies trader registration to simplify entry into the formal economy.
The CEMAC/COBAC microfinance framework supports micro- and small-business finance. Law No. 2010/001 on MSME Promotion enables preferential public procurement, fiscal incentives, and credit support. The AfCFTA Agreement and Protocol on Investment emphasise legal formalisation as a prerequisite for participation.
These Acts form a technically sound legal architecture, but the immediacy for practical change is clear. The existing framework provides simplified registration but lacks a phased, economically feasible route for most microenterprises. The transition is often abrupt and impractical, and without immediate reform, formalisation will remain inaccessible to the majority.
Reframing Formalisation as an Economic Incentive
Formalisation must occur at scale and urgently. The objective is not just to compel compliance, but to make participation immediately economically rational.
Incentives must be redesigned. A simple micro-entrepreneur regime with proportionate tax obligations would ease compliance and give clarity. Linking formal status to public procurement offers immediate commercial benefits. Faster land titling would release collateral and expand access to finance.
Social protection matters too. Extending coverage through the Caisse Nationale de Prévoyance Sociale to micro-entrepreneurs reduces concerns about informal safety nets. Regional harmonisation within CEMAC makes certain that incentives remain consistent and do not lead to regulatory arbitrage.
From Legal Visibility to Economic Integration
Formalisation is not the final goal. It is the way economic activity connects to a structured system to enable access to finance, contracts, and regulation, as well as cross-border expansion.
In practice, formalisation enables businesses to move from subsistence to scale – from informal networks to formal markets. Legal advisory helps guarantee compliance and structures businesses for regulatory engagement.
Conclusion: From Informality to Economic Participation
Cameroon’s informal economy is the foundation of national economic activity, but the urgency to integrate it into a scalable legal and institutional framework can no longer be ignored. Failure to act decisively risks entrenching exclusion and missed opportunity.
AfCFTA will drive this change. As continental standards and regulations harmonise, participation needs both economic activity and legal visibility. Businesses outside the formal system will operate, but lack financing, contract protection, or access to cross-border markets.
Formalisation must happen now, incisively, inclusively, and in a way that serves the real operators of Cameroon’s economy. Delay will only exacerbate exclusion and diminish growth opportunities.
This requires a deliberate shift in approach. Formalisation must move away from enforcement-led models to incentive-driven systems that recognise the economic constraints faced by micro-enterprises. It must provide a gradual, accessible, and commercially rational pathway. Without this, the gap between formal and informal economies will only widen.
At CLG, we see this reality firsthand. Some businesses we engage with operate at the intersection of informality’s nature and growth. They are commercially active, often regionally connected, but limited by regulatory complexity, tax exposure, and constrained access to financing. Our role, increasingly, is not simply to advise on compliance, but to support the transition into structured participation. This includes assisting businesses with formalisation strategies, corporate structuring, regulatory navigation, and engagement with tax and administrative authorities in a manner that preserves value and enables growth.
