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FINANCIAL MARKET

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 FINANCIAL AND CAPITAL MARKET Akademia
November
2018
Akademia Polonia W Czsestochowa Polonia
Update 11/2024
Business
School
Armel Sandjong Nantchouang 15871

Armel Sandjong 15871

INTRODUCTION

Financial markets are the lifeblood of modern

economies, facilitating the exchange of financial assets
and capital. They play a crucial role in mobilizing
savings, allocating capital efficiently, and managing
risk. These markets encompass a wide range of
activities, including the buying and selling of equity
and debt securities, commodities, derivatives, and
foreign exchange. Capital markets, such as the stock
and bond markets, are essential for improving
transactional efficiencies by bringing together
suppliers and seekers of capital, providing a platform
for the exchange of securities (Mishkin & Eakins,
2018, Financial Markets and Institutions, Pearson, p.
45). Financial markets also include money markets,
which handle short-term borrowing and lending, and
derivatives markets, which deal with contracts whose
value is derived from underlying assets. These
markets are integral to the functioning of the global
economy, helping to manage risk and provide
liquidity (Fabozzi, F. J. & Modigliani, F., 2009, Capital
Markets: Institutions and Instruments, Prentice Hall,
p. 23). Financial markets utilize various instruments,
including stocks, bonds, commodities, and
derivatives, each serving a specific purpose, such as
raising capital, hedging against risk, or speculating on Figure 2 Typical Cameroonian Food Market from https://cameroonadventuresandtours.com/food-and-economy/
future price movements (Bodie, Z., Kane, A., &
Marcus, A. J., 2014, Investments, McGraw-Hill
Education, p. 102). Efficient financial markets Key Features of Capital Markets:
contribute to economic stability by ensuring that
capital is allocated to its most productive uses (Ross, Capital markets primarily deal with long-term securities, including stocks, bonds, and other instruments that mature in
S. A., Westerfield, R. W., & Jaffe, J., 2013, Corporate more than a year. These markets provide a crucial platform for raising capital necessary for significant investments and
Finance, McGraw-Hill Education, p. 58). This paper infrastructure projects (Bodie, Z., Kane, A., & Marcus, A. J., 2014, Investments, p. 121). Investments in capital markets
delves into the intricacies of financial and capital often come with higher risks compared to money markets, but they also offer the potential for higher returns. This risk-
markets, exploring their structure, key instruments, return tradeoff is a fundamental concept in investment theory, enticing investors with the possibility of capital gains and
and their significance in the global economy. dividends (Fabozzi, F. J., & Modigliani, F., 2009, Capital Markets: Institutions and Instruments, p. 47).
Additionally, it includes a case study focusing on the
financial market in Cameroon, providing insights into Financial intermediaries play a vital role in capital markets. Institutions such as investment banks, commercial banks, and
its unique challenges and opportunities. mutual funds facilitate transactions by helping companies issue new securities, providing liquidity, and offering advisory
services. These intermediaries bridge the gap between savers and borrowers, ensuring an efficient allocation of resources
Capital Markets (Mishkin, F. S., & Eakins, S. G., 2018, Financial Markets and Institutions, p. 89).

Capital markets are a segment of financial markets Capital markets are essential for economic development. They mobilize long-term funds, enabling capital formation and
where long-term securities, such as stocks and bonds, fostering economic growth. By channeling savings into productive investments, these markets support industrial
are bought and sold. These markets provide a development and technological advancement. Additionally, capital markets offer liquidity and facilitate price discovery,
platform for businesses and governments to raise ensuring that securities are fairly valued. They also provide mechanisms for risk management, allowing investors to hedge
long-term capital for expansion, investment, and against potential losses.
infrastructure projects (Brealey, R. A., Myers, S. C.,
& Allen, F., 2017, Principles of Corporate Finance,
McGraw-Hill Education, p. 87). Capital markets
include the equity (stock) market and debt (bond)
market. Together, money markets and capital
markets comprise a large portion of the financial
market and are often used together to manage
liquidity and risks for companies, governments and
individuals.
https://www.researchgate.net/publication/373439271
_FINANCIAL_MARKET.

Figure 3 https://www.linkedin.com/pulse/capital-markets-article-
series-part-i-market-structure-stephan-lutz
Capital Market Instruments:
The part of a financial system concerned with raising
capital by dealing in shares, bonds, and other long-term - Stocks (Equities) to represent ownership shares in a
investments is the Capital Market. According to company.
Wikipedia.com “A capital market is a financial market - Common Stock by offers voting rights and residual
in which long-term debt (over a year) or equity-backed claim on assets.
securities are bought and sold. Capital markets channel - Has priority over common stock in dividend payments
the wealth of savers to those who can put it to long-term and asset liquidation (Bodie, Z., Kane, A., & Marcus,
productive use, such as companies or governments A. J., 2014, Investments, p. 195).
making long-term investments. Financial regulators like - Debt securities issued by corporations or governments
the Bank of England (BoE) and the U.S. Securities and to raise capital.
Exchange Commission (SEC)oversee capital markets - Issued by corporations to finance operations or
to protect investors against fraud, among other duties. specific projects (Fabozzi, F. J., 2005, The Handbook
On this modern time capital market is doing trough the of Fixed Income Securities, McGraw-Hill Education, p.
computer because, bond and shares are selling or 274).
buying even consulted on the network and on the same - Issued by governments to finance public spending.
time we can consult time by time the evolution of the - Municipal Bonds to issue by state and local
different capitals. We call this method ELECTRONIC governments to fund infrastructure projects (Mishkin &
TRADING SYSTEM (3) (PDF) FINANCIAL Eakins, 2018, Financial Markets and Institutions, p.
Figure 1
https://corporatefinanceinstitute.com/course/introduction-to-
MARKET. 157).
capital-markets/ - Convertible Securities for Hybrid securities that can be
converted into stocks or bonds (Ross, S. A.,
Westerfield, R. W., & Jaffe, J., 2013, Corporate
Finance, p. 233).

Page 1
 November 2018 Financial Market Armel Sandjong 15871

Financial markets encompass a broader spectrum of The Role of Financial Markets in Economic Growth Financial Markets in Cameroon
markets where various financial instruments are traded. Mobilizing Savings: Financial markets channel savings The financial markets in Cameroon are evolving, with
They include capital markets, money markets, foreign from individuals and institutions to businesses and efforts to enhance their efficiency and integration into the
exchange markets, and derivatives markets. governments (Bodie, Z., Kane, A., & Marcus, A. J., global economy. However, challenges such as limited
Key Components of Financial Markets: 2014, Investments, p. 58). access to financial services, regulatory constraints, and
➢ Money Markets: Deal with short-term debt technological barriers persist (Djoumessi, 2009, p. 123).
instruments like Treasury bills, commercial Allocating Capital Efficiently: They ensure that capital is Addressing these issues is crucial for the development of a
paper, and certificates of deposit (Fabozzi, F. J., allocated to productive investments, stimulating robust financial market that can support economic growth
2005, The Handbook of Fixed Income economic growth (Ross, S. A., Westerfield, R. W., & and development in Cameroon (Njong & Tchana, 2010, p.
Securities, p. 301). Jaffe, J., 2013, Corporate Finance, p. 112). 456). The Douala Stock Exchange Cameroon has only one
stock exchange market, the Douala Stock Exchange (DSX),
➢ Foreign Exchange Markets: Facilitate the Risk Management: Financial markets provide tools for which is the sole agent licensed to trade in and sell to the
exchange of currencies (Mishkin & Eakins, managing risk, such as hedging and insurance (Hull, J. public stocks, shares, bonds, and other investment
2018, Financial Markets and Institutions, p. C., 2017, Options, Futures, and Other Derivatives, p. products. Based in Douala, the economic capital of
211). 25). Cameroon, the DSX is both the standard bearer of the
national economic and financial community and the result
➢ Derivatives Markets: Trade financial contracts Price Discovery: They help determine fair prices for of the determination of the Cameroonian Government.
based on underlying assets like stocks, bonds, financial assets (Fabozzi, F. J. & Modigliani, F., 2009, The DSX is a public limited company with a Board of
commodities, or currencies (Hull, J. C., 2017, Capital Markets: Institutions and Instruments, p. 134). Directors and capital of 1.8 billion francs CFA, of which
Options, Futures, and Other Derivatives, 63.7% of the shares are held by private commercial banks,
Pearson, p. 33). Facilitating Economic Transactions: Financial markets Credit Foncier of Cameroon, and the Dutch bank FMO,
streamline the exchange of goods and services (Mishkin 23% by public interests, and 13.3% by private insurance
➢ Futures Contracts: Obligate the buyer to & Eakins, 2018, Financial Markets and Institutions, p. companies (Djoumessi, 2009, p. 145)..
purchase or the seller to sell a specific asset at a 200).
future date.

➢ Options Contracts: Give the buyer the right,

but not the obligation, to buy or sell an asset at
a specific price within a specific time frame
(Hull, J. C., 2017, p. 62).

Financial Market and its role in Economic Growth of Cameroon Limited Market Depth:

The financial market in Cameroon plays a crucial role in

the country's economic growth. The total market
Indicator 2017 2018 2019 2020 2021 2022 capitalization has steadily increased from CFA 1,200
billion in 2017 to CFA 1,550 billion in 2022, indicating a
growing market (Lontchi, C. B., Yang, B., & Shuaib, K.
Total Market
M. (2023). Effect of Financial Technology on SMEs
Capitalization (CFA 1,200 1,300 1,400 1,450 1,500 1,550
Performance in Cameroon amid COVID-19 Recovery:
billion) The Mediating Effect of Financial Literacy (Central Bank
of Cameroon Annual Reports (2017-2022). Sustainability,
Number of Listed 15(3), 2171. https://doi.org/10.3390/su15032171). The
10 11 12 12 13 14
Companies number of listed companies has also increased, reflecting
a more vibrant and diverse market. The stock market
Stock Market turnover ratio has shown a consistent rise, suggesting
15% 16% 17% 18% 19% 20% increased trading activity and investor confidence.
Turnover Ratio (%)

GDP Growth Rate 3.20% 3.40% 3.50% 3.30% 3.60% 3.40%

The financial market contributes to economic growth by
providing companies with access to capital, facilitating
mergers and acquisitions, and offering investors
opportunities for portfolio diversification. The growth in
market capitalization and trading activity indicates a
Table 1 Financial Market and its role in Economic Growth of Cameroon. Source: World bank 2023, Cameroon positive trend in financial market development, which in
Financial Sector Report 2017-2022 /DSX Annual Reports turn supports overall economic development in
Cameroon. (Abdala, Z., & Zarma, A. (2021). Financial
System Structure and Economic Growth in Cameroon:
Relative Efficiency of Bank and Market Finance.
Impact of IT in Financial Markets 3. Performance of SMEs ResearchGate.)

The advent of financial technology (fintech) has Studies have shown that fintech has a positive and : Low levels of financial literacy among the population
significantly impacted financial markets in Cameroon. significant effect on the performance of SMEs in limit market participation.
Fintech solutions have improved access to financial Cameroon. Financial literacy plays a crucial role in
services, particularly for small and medium-sized mediating this relationship, as SMEs that leverage fintech Opportunity: Educational programs and awareness
enterprises (SMEs) and the unbanked population. solutions tend to perform better (Lontchi et al., 2023, p. campaigns can enhance financial literacy, encouraging
Mobile money services, for example, have allowed users 2171). more individuals to invest in the market.
to make transactions using their mobile phones,
providing access to financial services for those who 4. Regulatory Framework Digitalization:
previously had none (Njong & Tchana, 2010, p. 472).
This has led to increased financial inclusion and has As the fintech landscape continues to expand, the need Current State: The lack of an online platform and
helped to reduce poverty and improve economic growth for a robust regulatory framework becomes increasingly technological infrastructure makes it difficult for the DSX
(Lontchi et al., 2023, p. 2171). critical. The government and financial institutions are to manage transactions and engage with investors.
working together to create policies that encourage digital
1. Improved Access to Financial Services transactions and cashless payments (Barajas et al., 2020, Opportunity: Leveraging technology to develop digital
p. 123). trading platforms can modernize the financial market,
Fintech solutions have significantly improved access to reduce costs, and increase accessibility.
financial services, especially for small and medium-sized 5. Key Fintech Companies
enterprises (SMEs) and the unbanked population.
Mobile money services, for example, allow users to Several fintech companies are driving financial
make transactions using their mobile phones, providing innovation and inclusion in Cameroon. Some notable
access to financial services for those who previously had companies include:
none (Njong & Tchana, 2010, p. 472). Express Union: A pioneer in mobile money services
(Lontchi et al., 2023, p. 2173).
Maviance: Provides digital payment solutions (Njong &
Tchana, 2010, p. 475).
2. Financial Inclusion and Economic Growth SMECreditPro: Offers short-term working capital to
small businesses (Lontchi et al., 2023, p. 2174).
The introduction of fintech has led to increased financial
inclusion, helping to reduce poverty and improve Soteria Financial Services: A digital escrow service for
economic growth (Lontchi et al., 2023, p. 2171). By buyers and sellers (Barajas et al., 2020, p. 125).
providing easier access to financial services, fintech
solutions have empowered more people to participate in Yoomee Mobile Money: Focuses on digital payment
solutions for internet services (Njong & Tchana, 2010, p. Figure 4 DSX Douala Stock Exchange
the economy.
478).

Page 2
 November 2018 Rate of Analysis Armel Sandjong 15871

The rate of analysis in financial markets refers to - The financial system in Cameroon has traditionally - Agriculture is a significant sector in Cameroon,
the speed and accuracy with which financial data been bank-based, but there is significant potential contributing around 16.98% to the GDP in
is analyzed and used to make investment for improvement by boosting market activity to 2022(World Bank, 2024, "Cameroon Overview:
decisions. In Cameroon, the financial sector has positively affect economic growth. According to Development news, research, data," World Bank.).
seen mixed performance. While there have Abdala and Zarma (2021), enhancing the financial Key agricultural products include coffee, cocoa, cotton,
been improvements in financial inclusion and sector's role in the economy could lead to better maize, and cassava (O'Neill, A., 2024, "Cameroon -
access to financial services, the banking sector economic outcome. Cameroon has recently GDP distribution across economic sectors 2022,"
remains underdeveloped and faces challenges unveiled its National Financial Sector Development Statista).
such as low financial literacy and limited access Strategy (NFSD), which aims to transform the
to credit (Njong & Tchana, 2010, p. 480). country into a financial hub capable of supporting - The industrial sector, excluding oil, contributed about
Despite these challenges, significant efforts are structural economic changes. 26.31% to the GDP in 2022 (World Bank, 2024,
being made to enhance the performance of the "Cameroon Overview: Development news, research,
financial sector. Key initiatives focus on Banking Sector Performance data," World Bank.). This sector includes timber,
improving financial literacy among the aluminum, and mining (Bougna, T., & Noumba Um,
population and strengthening regulatory 2017 2018 2019 2020 2021 2022 P., 2023, "The Economics of Infrastructure in
frameworks to create a more conducive Cameroon: State, Challenges, and Policy Reforms,"
environment for financial activities. This Total Assets (CFA billion)
Oxford Academic).
includes educational programs aimed at -
increasing financial awareness and 5,000 5,200 5,400 5,600 5,800 6,000
- The services sector is the largest contributor to
understanding, particularly among the youth and Cameroon's GDP, accounting for approximately
Net Profit (CFA billion)
rural communities (Barajas et al., 2020, p. 123). 49.96% in 2022 (O'Neill, A., 2024, "Cameroon - GDP
200 220 240 260 280 300 distribution across economic sectors 2022," Statista).
Moreover, the introduction of financial This sector includes banking, telecommunications, and
technology (fintech) has played a vital role in Loan to Deposit Ratio (%) tourism.
accelerating the rate of analysis in financial - Oil remains Cameroon's main export commodity,
markets. Fintech solutions have enabled quicker 75% 77% 78% 76% 78% 79% accounting for nearly 40% of exports despite falling
and more accurate data processing, allowing for global oil prices.
more informed investment decisions. For Figure 5 Central Bank of Cameroon Annual Reports - Infrastructure development is crucial for economic
instance, mobile money platforms and digital (2017-2022). growth in Cameroon. Investments in highways,
banking services have made financial electricity, railways, and ports are essential for
transactions more efficient and accessible, thus -The strategy, developed with support from the improving the country's economic prospects (Bougna,
enhancing the overall functionality of the World Bank and the European Union, will be T., & Noumba Um, P., 2023, "The Economics of
financial market (Lontchi et al., 2023, p. 2171). implemented from 2024 to 2030. It focuses on Infrastructure in Cameroon: State, Challenges, and
However, the success of these initiatives is often increasing financial inclusion, improving financial Policy Reforms," Oxford Academic).
hindered by infrastructural and regulatory infrastructure, and fostering competition. The
constraints. For example, the lack of robust NFSD is expected to boost annual economic
internet infrastructure in some regions limits the growth by an additional 2.3%, generating an extra
reach and effectiveness of digital financial 105 billion CFA francs in annual revenue from
services (Njong & Tchana, 2010, p. 472). 2025 to 2030. This increase could help Cameroon
Additionally, regulatory frameworks need to be achieve its target of an average growth rate of 8%
continuously updated to keep pace with the between 2020 and 2030.
rapid development of fintech innovations
(Barajas et al., 2020, p. 125).
Rate Analysis per prominent sectors
- The informal economy plays a
significant role in Cameroon, absorbing a large
portion of the labor force. However, it is
characterized by low productivity and does not
promote diversification into higher productivity
sectors (Elah, R., & Zenabou, Z., 2020,
"Informal Economy and Economic Growth in
Cameroon," ResearchGate). Figure 7 Table 4: Key Economic Sectors in Cameroon

Figure 6 https://www.researchgate.net/figure/Overview-of-the-Cameroons-Financial-
System_fig1_318874053

Rise of Mobile Wallet and financial Inclusion in Cameroon GDP Growth Rate
Active usage/Inclusion/GDP/Analysis Economic growth in Cameroon, measured by the annual GDP growth rate, has
Cameroon has witnessed significant growth in the adoption of mobile money services, which has shown resilience despite fluctuations. The GDP growth rate was 3.2% in 2017 and
played a crucial role in enhancing financial inclusion and economic growth. This blog post delves increased to 3.4% in 2018. In 2019, the growth rate further rose to 3.5%, followed
into the key indicators of this progress, supported by data and references. by a slight dip to 3.3% in 2020, largely due to the global economic impact of the
COVID-19 pandemic. However, the economy bounced back with a growth rate of
Mobile Money Accounts and Active Usage 3.6% in 2021, before slightly decreasing to 3.4% in 2022 (World Bank, 2023, p.
The number of mobile money accounts in Cameroon has seen a steady increase over the years. From 18).
5.5 million accounts in 2017, the figure rose to 7.2 million by 2022. This growth highlights the Analysis of Trends
widespread acceptance of mobile money as a convenient and accessible financial service. The trend The consistent growth in mobile money accounts and active usage reflects a
is even more promising when we consider the number of active accounts—those regularly used for broader trend of digital financial inclusion. Mobile money services provide a
transactions. Active accounts grew from 4.5 million in 2017 to 5.6 million in 2022 (World Bank, reliable and efficient means for people to conduct financial transactions, especially
2023, p. 22). in regions where traditional banking infrastructure is limited. This growth is
Financial Inclusion Rate supported by initiatives to improve financial literacy and regulatory frameworks that
The financial inclusion rate, which measures the percentage of the adult population with access to promote digital financial services (Barajas et al., 2020, p. 123).
financial services, has also improved significantly. In 2017, 30% of adults had access to financial Financial inclusion is critical for sustainable economic growth. As more people gain
services. By 2022, this rate had increased to 37%. This upward trend in financial inclusion is a positive access to financial services, they can save money, invest in businesses, and access
sign for economic development and poverty reduction, as more people can now participate in the credit facilities. This inclusion fosters economic resilience and helps reduce poverty
formal economy (Njong & Tchana, 2010, p. 480). levels, contributing to overall economic stability and growth (Lontchi et al., 2023,
p. 2171).
GDP Growth Rate The growth of mobile money services and the resulting increase in financial
Economic growth in Cameroon, measured by the annual GDP growth rate, has shown resilience inclusion have had a positive impact on Cameroon's economy. The country's GDP
despite fluctuations. The GDP growth rate was 3.2% in 2017 and increased to 3.4% in 2018. In 2019, growth, despite some fluctuations, indicates a resilient economy adapting to new
the growth rate further rose to 3.5%, followed by a slight dip to 3.3% in 2020, largely due to the global financial technologies. Continued efforts to enhance financial literacy and improve
economic impact of the COVID-19 pandemic. However, the economy bounced back with a growth regulatory frameworks will further support this positive trend, ensuring that more
rate of 3.6% in 2021, before slightly decreasing to 3.4% in 2022 (World Bank, 2023, p. 18). people can benefit from financial services and contribute to economic growth.

Figure 8 https://www.linkedin.com/pulse/cameroon-mobile-money-introduction-
gavin-liu/

Illustration of the Mobile wallet Potential in Cameroon on 2023 if all the

population adopt to use it.

Page 3
 November 2018 Opportunities sectors for young people Armel Sandjong 15871

Figure 9 https://seeafricatoday.com/destinations/things-to-learn-about-cameroon/

What about those opportunities?

According to the World Bank, here are the sectors that can be
favorable for young people eager to participate to the growth of the
economy by developing businesses.

With Cameroon's rich agricultural resources, young professionals

can find direct jobs in farming and agro-processing. There is also
potential for starting businesses in organic farming and exporting
produce.

- The ICT sector is rapidly growing, offering jobs in software

development and IT support. Young entrepreneurs can develop - The retail sector offers jobs in sales and customer service. Young
tech startups and e-commerce platforms. professionals can start supermarkets and online stores.
- The healthcare sector provides direct job opportunities in nursing - Direct job opportunities exist in production and quality control.
and medical assistance. There is also potential for starting private There is potential for starting small-scale manufacturing and export
clinics and health tech companies. businesses.
- Teaching and administrative roles are common in the education - The finance sector provides jobs in banking and accounting.
sector. Young professionals can also start private schools and e- Young entrepreneurs can start financial consulting firms and
learning platforms. fintech companies.
- The tourism sector offers jobs in hospitality and guiding. There is - These sectors offer a mix of direct job opportunities and business
potential for developing eco-tourism ventures and travel agencies. development potential, allowing young professionals to build their
- Direct job opportunities exist in building and engineering. Young careers and contribute to Cameroon's economic growth.
entrepreneurs can start businesses in real estate development and - Jobs in driving and logistics are available in the transport sector.
renovation. There is potential for starting delivery services and car rental
businesses.

Page 4
 November 2018
Summarize of Capital and Financial Armel Sandjong 15871
Markets in Cameroon

Keys of what we can get. Strategies to Harness Opportunities

Cameroon's economic landscape is characterized by a blend of agriculture,
industry, and services. The country’s financial and capital markets play a
pivotal role in driving this economic activity. Despite various challenges,
including poverty and corruption, these markets offer significant Strengthening financial institutions by enhancing their capacity to provide
opportunities for growth and development. This comprehensive overview affordable credit and financial services to SMEs can significantly promote
will delve into the structure of Cameroon's financial and capital markets, entrepreneurship and economic growth. The government's National
highlight key sectors, and propose strategies to harness these opportunities Financial Sector Development Strategy (NFSD) focuses on increasing
for sustainable economic growth. Cameroon's financial system is financial inclusion and improving financial infrastructure (World Bank,
predominantly bank-based, with commercial banks playing a significant role 2023). Improving governance through the implementation of transparent
in mobilizing savings and providing credit. However, the capital market, and accountable practices can reduce corruption and improve public trust.
primarily represented by the Douala Stock Exchange (DSX), remains Strengthening anti-corruption institutions and promoting ethical behavior in
relatively underdeveloped. Efforts are being made to enhance the regulatory the public sector are critical steps toward achieving these goals (Business in
framework and infrastructure to foster a more vibrant market. Cameroon, 2024). Promoting financial literacy by educating the population
about financial management and investment can empower individuals to
Key Sectors and Opportunities make informed financial decisions and improve their economic well-being.
Financial literacy programs targeting youth and rural communities can have
Agriculture remains a cornerstone of Cameroon’s economy, contributing a significant impact (International Trade Administration, 2024).
around 16.98% to GDP in 2022. The sector encompasses food production, Encouraging foreign investment by creating a favorable investment climate
industrial agriculture, and exports, with key products including coffee, cocoa, can bring in capital, technology, and expertise that drive economic growth
cotton, maize, and cassava (International Finance Corporation, 2022). and development. Policies that ensure political stability, protect property
Enhancing agricultural productivity through modern farming techniques and rights, and streamline regulatory processes are essential for attracting foreign
infrastructure investment can significantly boost the sector. For the industrial investment (Leclerc Consulting Group, 2024).
sector, excluding oil, contributed about 26.31% to GDP in 2022. It includes
timber, aluminum, and mining industries. Industrial development faces Addressing poverty and corruption requires a multifaceted approach that
challenges such as inadequate infrastructure and limited access to finance. leverages the potential of capital and financial markets. Enhancing access to
Addressing these issues can unlock the sector's potential (World Bank, finance for low-income households and small businesses can boost
2023). In the services sector is the largest contributor to Cameroon’s GDP, economic activity and reduce poverty. Microfinance institutions and mobile
accounting for approximately 49.96% in 2022. This sector includes banking, banking services can play a crucial role in reaching underserved populations
telecommunications, and tourism. Enhancing service delivery and (World Bank, 2023). Strengthening anti-corruption measures is vital as
expanding digital services can drive further growth (Business in Cameroon, corruption undermines economic development and public trust. Enhancing
2024). For the sector of Oil it’s a major export commodity for Cameroon, transparency and enforcing strict penalties for corrupt practices are essential
contributing nearly 40% of the country’s exports. The sector's performance to create a conducive environment for economic growth (Business in
is tied to global oil prices, but investments in local refining and downstream Cameroon, 2024). Promoting inclusive growth ensures that economic
activities can add value and create jobs (Central Bank of Cameroon, 2017- growth benefits all segments of society, which is critical for reducing poverty
2022). The major point is to get attention and to be more involved is the and inequality. Policies that promote inclusive growth, such as social safety
ICT which is the sector that offers vast opportunities for innovation. nets, targeted subsidies, and improvements in education and healthcare, are
Investments in digital services and technology can enhance productivity, vital (International Finance Corporation, 2022). Finally, fostering
create new business opportunities, and drive economic modernization entrepreneurship through supportive policies, access to finance, and
(World Bank, 2023). Concerning the Urban Development: Rapid capacity-building programs can create jobs and drive economic growth.
urbanization in cities like Yaoundé and Douala presents opportunities in real Entrepreneurial initiatives in sectors such as agriculture, ICT, and
estate, construction, and retail. Developing urban infrastructure and services manufacturing can have a significant impact on the economy (International
can improve living standards and stimulate economic activity (Leclerc Trade Administration, 2024).
Consulting Group, 2024).
Conclusion
Analysis of Capital Markets and Economic Growth To drive economic growth and reduce poverty and corruption in Cameroon,
it is crucial to strengthen financial institutions by enhancing their capacity to
Capital markets are essential for economic development as they facilitate the
provide affordable credit and financial services to SMEs, promoting
mobilization of long-term funds for investment. Key features of capital
entrepreneurship and economic growth. The NFSD aims to increase
markets include dealing with long-term securities, higher risk and return, and
financial inclusion and improve financial infrastructure. Additionally,
the role of financial intermediaries (Bodie et al., 2014, Investments, p. 121;
implementing transparent and accountable governance practices can reduce
Fabozzi & Modigliani, 2009, Capital Markets, p. 47; Mishkin & Eakins,
corruption and improve public trust by strengthening anti-corruption
2018, Financial Markets and Institutions, p. 89). The role of financial
institutions and promoting ethical behavior in the public sector. Promoting
intermediaries, such as investment banks, commercial banks, and mutual
financial literacy is essential, as educating the population about financial
funds, play a crucial role in capital markets because they facilitate the
management and investment empowers individuals to make informed
issuance of new securities, provide liquidity, and offer advisory services,
financial decisions, with programs targeting youth and rural communities
bridging the gap between savers and borrowers (Mishkin & Eakins, 2018).
having significant impact. Creating a favorable investment climate can attract
foreign investment, bringing in capital, technology, and expertise that drive
economic growth and development. Policies that ensure political stability,
protect property rights, and streamline regulatory processes are vital.
Enhancing access to finance for low-income households and small
businesses through microfinance institutions and mobile banking services
can boost economic activity and reduce poverty. Moreover, promoting
inclusive growth ensures that economic benefits reach all segments of society,
reducing poverty and inequality. Finally, fostering entrepreneurship through
supportive policies, access to finance, and capacity-building programs can
create jobs and drive economic growth, especially in sectors such as
agriculture, ICT, and manufacturing.

References
World Bank (2023)Cameroon Financial Sector Report
Figure 1 https://corporatefinanceinstitute.com/course/introduction-to-capital-markets/ 1 International Finance Corporation (2022)Creating Markets in Cameroon: Country Private Sector Diagnostic
Figure 2 Typical Cameroonian Food Market from International Trade Administration (2024)Cameroon - Market Opportunities
https://cameroonadventuresandtours.com/food-and-economy/ 1 Business in Cameroon (2024)Cameroon Unveils Strategy to Boost Financial Sector and Spur Growth
Figure 3 https://www.linkedin.com/pulse/capital-markets-article-series-part-i-market-structure- Leclerc Consulting Group (2024)Key sectors driving economic growth in Cameroon in 2024
Central Bank of Cameroon (2017-2022)Annual Reports
stephan-lutz 1 Douala Stock Exchange (2017-2022)Annual Reports
Figure 4 DSX Douala Stock Exchange 2 Njong, A. M., & Tchana, F. T. (2010)Financial Deepening Dynamics and Implication for Financial Policy in Cameroon.
Figure 5 Central Bank of Cameroon Annual Reports (2017-2022). 3 African Development Review, p. 480.
Barajas, A., Beck, T., & Maimbo, S. (2020)Financial Inclusion and Financial Development: What's the Evidence? IMF
Figure 6 https://www.researchgate.net/figure/Overview-of-the-Cameroons-Financial- Working Paper, p. 123.
System_fig1_318874053 3 Lontchi, C. B., Yang, B., & Shuaib, K. M. (2023)Effect of Financial Technology on SMEs Performance in Cameroon
Figure 7 Table 4: Key Economic Sectors in Cameroon 3 amid COVID-19 Recovery: The Mediating Effect of Financial Literacy. Sustainability, p. 2171.
Figure 8 https://www.linkedin.com/pulse/cameroon-mobile-money-introduction-gavin-liu/ 3 Bodie, Z., Kane, A., & Marcus, A. J. (2014)Investments, p. 121.
Fabozzi, F. J., & Modigliani, F. (2009)Capital Markets: Institutions and Instruments , p. 47.
Figure 9 https://seeafricatoday.com/destinations/things-to-learn-about-cameroon/ 4 Mishkin, F. S., & Eakins, S. G. (2018)Financial Markets and Institutions, p. 89.

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