CHAPTER I

 INTRODUCTION

In this chapter we will be presenting the background study, description of research problem area, Research question(s) and objectives. We will also justify the importance of the research, present the motivation, signification, scope and limitation of the study.

1.1. Background of the study

The economic circumstances of downturn in the economy of Cameroon in the mid-1980s to early 2000s led Cameroon into an economic crisis, mainly as a result of the fall of export income due to the price decrease of products such as coffee, cocoa, and oil in the international market. Following a rise of approximately 40% in the real effective exchange rate of the local currency, XAF Francs in 1994 and the increase of external debt and the budgetary deficit, prompted the government to withdraw from economic activities and a conductive environment was created that favored the emergence of the private sector ( The world bank: Cameroon creating opportunities for inclusive growth and poverty reduction,2007) by Christian Montgomery. The development of the private sector in Cameroon is perceived to be an alternative to youth unemployment that constitute a larger part of population. according to the African youth charter, youths are individual aged between 15years to 35years old. Cameroon have a large youth population of 14,000 (2020) with more than 60percent of the population under the age of 25years. The private sector is focused on the development of business activities and industrial production in the agricultural, natural resources and mining sectors while government is concerned with the development of strategic sectors such as infrastructure, energy, and policies.

Today, in Cameroon, there are about 93,969 enterprises distributed across the country. Small-scale enterprises represent 90 percent of the total number of enterprises in the country. However with the enterprise distribution remaining unbalanced and the majority of the enterprises located in Cameroon’s big cities such as Yaoundé, Baffussam, and Douala that accounted for 73.8 per cent of 93,969 enterprises that exist in the country (Cameroon General Enterprise Census, 2009).

A great number of factors and impacts determine the development of entrepreneurship among youths in the under developed countries and in the Cameroon in particular. In Cameron, the growth of entrepreneurship development is also influence by population movement. That is the factors

affecting entrepreneurship in Cameroon are not homogenous in all areas.  For example, small cities, rural areas and metropolitan cities have different factors. (Small business and Business planning strategy by Ryan Griffee, 2019)

This unbalanced distribution of enterprises across the country has a negative impact on the entrepreneurship development in small cities and rural areas.

1.2. Statement of the problem

Cameroon being a country that has large number of youths (15-34years) the number of youths in Cameroon increased from 6.06million persons in 2005 to 8.65million persons in 2019 growing at an average annual rate of 6.43%, (Knoema) Cameroon as well as other African countries are looking for means of providing jobs to these youths. In Cameroon entrepreneurial activities appeared to be an alternative to youth unemployment, there is need to promote the development of entrepreneurial activities within the country. Since 1990, the Cameroonian government was forced to withdraw from the trading market that is the Central African Economic and Monetary Community trading market (CEMAC) due to the impact on the fall on farm produce (oil, cocoa, and coffee) on international market. Public companies that were mainly agro-industries were privatized. The major impact of the economic crisis was the increase in the number of jobless people, who developed a lot of survival economic activities to support themselves. This saw the emergence of the private sector nationwide. After the crisis the Cameroon government adopted many reforms to promote private investment. The adoption of investment code in 2002 stressed on the characteristics of investments and investors which also include some fiscal advantage to private investment according to given categories of the firms. Recent reforms including the creation of the enterprise registration center (one-stop shop) in 2010 to facilitate the official procedures of all licenses needed for entrepreneurs to acquire a legal statute. To improve dialogue between public actors and private actors‟, government created the Cameroon Business Forum in 2010. Government also created Small and Medium size Bank, National Agency of SMEs Promotion and Agricultural Bank in 2013 to support economic activities. Despite government effort to promote the development of entrepreneurship, entrepreneurial activities are not yet widely developed within the country. Furthermore, entrepreneurial activities are mostly developed in the main cities (Yaoundé, Douala, and Baffussam ) while small cities and rural areas receive less attention regarding the development of entrepreneurial activities.

1.3. Research question

This study aims to answer the following research questions:

• To what extend does  socio economic  factors determine youths entrepreneurial activities in Cameroon?
• To what extend does environmental factors determine entrepreneurial activities in Cameroon?

1.4. Aim and Objectives of the study

Based on the above research question, the objectives are:

• To trace the environmental factors determine youths entrepreneurial activities in Cameroon;
• To trace out the socio economic factors influencing youth’s entrepreneurial activities in Cameroon.