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Cameroon: Students and Researchers Evaluate the Welfare System

Welfare Systems are rapidly evolving in Sub-Saharan Africa, with some countries having implemented systems allowing evaluation of measures taken several decades ago. Students and researchers from Cameroon have closely examined social public policies and private sector initiatives in their country.

Fundamentals and Weaknesses of the Cameroon Social Security System

The Centre of European and International Liaisons for Social Security, CLEISS, provided a summary [fr] of the Cameroon social security system:

La sécurité sociale camerounaise comporte trois branches :

  • accidents du travail, maladies professionnelles,
  • prestations familiales,
  • invalidité, vieillesse, décès (survivants).

Les soins sont dispensés aux travailleurs par les employeurs dans le cadre du code du travail. Toutefois, depuis 1962, un certain nombre de soins sont dispensés, dans le cadre d'un service national de santé. La législation camerounaise de sécurité sociale ne comporte pas, en effet, de branche “soins de santé”. Les cotisations sont payées sur les salaires plafonnés à 300.000 francs CFA sauf pour les accidents du travail pour lesquels les cotisations sont payées sur la totalité du salaire. Le SMIG est égal à 28.216 francs CFA par mois pour 40 heures de travail hebdomadaire dans les entreprises non agricoles publics ou privées.

The Cameroon social security system consists of three branches:

  • accidents at work, occupational diseases
  • family benefits
  • invalidity, old-age, death (survivors)

Treatment is provided to workers by employers according to the labour code. However a certain number of treatments have been provided through the national health service since 1962. Cameroon social security legislation does not actually include a ‘health care’ branch. Contributions are paid on wages up to a ceiling of 300,000 CFA francs, except in the case of work accidents, where contributions are paid on the whole salary. The guaranteed minimum wage is 28,216 CFA francs per month for 40 hours of weekly work in public or private non-agricultural businesses.


Informal workers at the Biyem-Assi crossroads in Yaounde by Niluje from wikipedia (CC License-Public Domain)

Alex Okolouma, doctoral student at the University of Yaoundé in 2008, argued that Cameroon social security has not worked well since its implementation in the early 1980s because of three main factors: the financial crisis, systemic inefficiency and a lack of legitimacy. He explained [fr]:

Les difficultés éventuelles que peut rencontrer le système de sécurité sociale dépendent toutefois de la conjoncture dans laquelle il évolue, du taux d'activité dans l'économie formelle et de la gestion des fonds qui alimentent le régime. Si l'on prévoit une hausse des activités dans l'économie informelle chez les individus appartenant à la classe d'âge des actifs, alors cela ne peut que susciter la dégradation du ratio de dépendance du système. Plusieurs facteurs de dysfonctionnements ont été identifiés. Pour certains ces facteurs sont d'abord démographiques et macroéconomiques. Il y a l'arrivée à l'âge de la retraite de populations importantes de salariés pris en charge à l'époque de la croissance et bénéficiaires de pensions au moment où le nombre de cotisants a baissé considérablement. A ces facteurs structurels et financiers s'ajoutent également les évolutions négatives de la gestion interne (gestion financière et gestion administrative).

Potential difficulties that social security system could hit are, nevertheless, dependent on the circumstances in which it develops, the rate of activity in the formal economy and the management of funds supplying the system. If an increase of activity in the informal economy is expected among individuals in the active age group, then this can only lead to decrease of the system dependency ratio. Several disfunctional factors have been identified. For some these factors are demographic and macroeconomic. Large numbers of employees have reached retirement age. They were supported during times of growth and are beneficiaries of pensions at this time when the number of contributors has fallen significantly. To these structural and financial factors can be added the negative developments of internal management (both financial and administrative).

Okouloma recommended a new approach [fr]:

Si ce système continue à fonctionner ainsi, sa viabilité sera dans un terme proche mise à mal. Il apparaît donc judicieux d'entreprendre la réforme du système camerounais de protection sociale. La mise en place d'un nouveau modèle de protection sociale va permettre de contribuer à l'extension et à l'amélioration du fonctionnement du système de protection sociale camerounais.

If this system continues to function in this way, its sustainability will be undermined in the short term. It therefore seems advisable to undertake a reform of the Cameroon welfare system. The establishment of a new welfare model will help contribute to the extension and improvement of the functioning of the Cameroon welfare system.

The Private Sector and the Labour Market

Boris Kamga, researcher at the International Relations Institute of Cameroon, IRIC, described the Cameroon insurance market as follows [fr]:

Le marché des assurances se caractérise par une faible couverture des risques industriels, un très faible taux de couverture des ménages, et une assurance-vie encore peu développée. Selon certaines sources, seules une maison sur 10 et une voiture sur deux seraient assurées. [..] Dans le secteur, 25 compagnies, 52 courtiers et 48 agents généraux se partagent un marché dont le chiffre d'affaires (mesuré par les primes émises) était de 94,2 milliards de FCFA en 2005. Parmi les 25 compagnies d'assurance établies au Cameroun, les cinq premières – Chanas, Axa, Saar, AGF et Activa – détenaient en 2005 environ 72,5% du marché. Les deux entreprises d'État (AMACAM et CNR) ont été liquidées.

The insurance market is characterised by low coverage of industrial risks, a very low rate of household coverage, and even more poorly developed life insurance coverage. According to some sources, only one house in ten and one out of two cars are insured. [..] In the sector, 25 companies, 52 brokers and 48 general agents share a market whose turnover (measured by issued premiums) was 94.2 billion CFA francs in 2005. Among the 25 insurance companies established in Cameroon, the top five – Chanas, Saar, Axa, AGF and Activa – held approximately 72.5% of the market in 2005. The two state companies (AMACAM and CNR) have been liquidated.

Kagan believes insurance has a role to play in the recovery of the Cameroon economy. To do this, he concluded [fr]:

Les résultats auxquels nous sont parvenus attestent d'un réel besoin d'assainissement du secteur, étant entendu que le service des assurances est une nécessité impérieuse pour le développement de notre économie, la garantie des personnes et la sécurisation des affaires. Reste que, cet effort d'assainissement doit concerner aussi bien le cadre juridique d'exercice de la profession, les mesures incitatives pour ouvrir les services d'assurances aux diverses branches de l'activité économique, l'amélioration du processus de paiement des sinistres et/ou des engagements dus.

The results we reached show a real need of stabilisation of the sector, understanding that there is a pressing need for insurance services to enable the development of our economy, people’s benefits and business stability. However, this attempt at stabilisation must cover the legal framework for professions as well as incentives to open up insurance services to different branches of economic activity, improvement of the payment of claims process and/or liabilities.

A crucial component of the system remains the labour market and its role in obtaining minimum guarantees for welfare measures. The unemployment rate remains an unknown quantity in Cameroon. Official data from the Cameroon National Institute of Statistics shows an unemployment rate of 4.4% for 2005 while the CIA World Factbook reported unemployment around 30%. In light of the importance of the informal economy, experts believe that it is also important to closely examine employee productivity as a function of the security given by their employment contracts.

Benjamin Fomba Kamga is currently a researcher at IZA, an Economic Research Institute specialising in the labour market. He wrote an article on ‘Labor Contracts and Shirking in Cameroon’. He concluded that:

The employees under short term contracts since their recruitment are more inclined to shirk as well as those who are permanent since their recruitment. Employees without social security are likely to cheat than those with social security and recruited permanently since the beginning.

The importance of a wellfare system that protects most Cameroonians is emphasized by these studies. There is still quite a lot to be achieved before the current system can satisfy such criteria. Political leadership will be paramount to drive the necessary changes.

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