Abstract

The study was about the challenges faced by Cameroon importers case of Car importation in Douala sea port. All imported goods are subject to customs clearance at the port of entry in every destination country. Delay in customs clearing of goods causes to emerge and increase demurrage costs and abandonment of cars. The study has determined and evaluated the import challenges faced by countries in the CEMAC zone as some of these countries import through the Douala sea port, Cameroon.

Factors was combine to yield different sets of challenges and priorities in these countries. The research methodology concerned about data collection where the researchers was applying systematic approaches in data collection so as to come up with specific findings. The researchers used a survey research design to find the challenges faced by car importers in Cameroon of sea port consignment. Interview was the main instrument for data collection. The Data Extraction table was used to analyse the data gathered in the field.

The straight line equation was used to determine the study population, the study used a census of 40 respondents using systematic random sampling technique, and method of data collection (primary and secondary data). These respondents consisted of the Douala Port Authority Managers, the Cameroon Custom Authorities, clearing agents, import clients and duellers of all works of life.

The finding revealed that among major challenges come as the results of clearance procedures in Cameroon being too long, surrounded with corruption environment due to multiple documentation requirements and the procedures are neither transparent enough nor documented. The study concludes with a brief set of policy recommendations.

CHAPTER ONE

INTODUCTION

1.1 Background to the Study

International trade is the performance of trade and investment activities across national boundaries (Voerman, 2011), International trade is also seen as the exchange of goods and services between countries. Importation is one of the critical forces that encompasses international trade. Many countries rely on imports to benefit or consumer goods which they cannot produce.

According to Dr Jean-Paul Rodrigue (2017), Companies perform various activities in more than one country such as manufacturing, selling or even sourcing. Technology has made it possible to access multiple markets around the globe within a short time. This has mostly influenced companies to expand their market share to other countries other than the parent country. Cavusgil (2010) further indicate that companies can make international trade through methods such as exporting, foreign direct investment, franchising or even licensing.

The institutional idea advanced by Meyer and Rowan (1977) asserted that the institutional environment can highly influence the development of formal structures in an organization, often more profoundly than market pressures. Innovative structures that improve technical efficiency in early adopting organizations are legitimized in the environment. Technological gap philosophy was advanced by Posner (1961) who describes technology theory as advantage enjoyed by the Nation that introduces new goods in a market.

As a result of research activity and entrepreneurship, new products are produced, and the innovating country enjoys a monopoly until the other Nations learn to produce these goods, while market imperfection concept was advanced by several people including (Hymer, 1976). These researchers define market imperfection as anything that interferes with trade. Market imperfections include two dimensions of fault. First imperfections cause a rational market participant to divert from holding the market portfolio. Second, imperfections cause a rational market participant to deviate from his preferred risk level. Market imperfections generate costs which interfere with trades that intelligent individuals make or would make in the absence of defects.

International trade is the Interchange of goods and services between countries (Heakal2011). This type of business gives rise to the world economy, in which prices, or supply and demand causes and are affected by global events. Trading globally gives consumers and countries the chances to be exposed to goods and services not provided in their own countries. Numerous types of product can be found on the international market: food, clothes, spare parts, oil, jewellery, wine, stocks, currencies and water. Services are also sold: tourism, banking, consulting and transportation. A product that is delivered to the international market is an export, and a product that is purchased from the global market is an import.

According to Husted (2007), all countries participate in international trade, meaning some goods and services manufactured within every country are sold to economic agents (industries, firms, governments etc.) in other countries, these products are known as exports. Some goods and services consumed within a state have been purchased from economic agents in other countries; these goods are known as imports. Countries differ in how much they take part in international trade. According to Wikipedia the free encyclopaedia (2016) a measure of this participation (crude measure) is given by the ratio of exports to Gross Domestic Product (GDP) (Gross National Product) multiplied by 100. This measure is known as the index of openness. Generally, this number will vary between 0 –100.

Sometimes it will go higher though scarce to more than 100. Countries with high values of this index trade a lot with the rest of the globe and are said to be relatively open, those with low costs are said to be relatively close because international trade is only a small part of their economic activity (Husted, 2007). The extent of economic activity in a country can be measured in many ways. The two most common measures are GNP and GDP of a nation. GNP, this is the value of final goods and services by a domestic factor of production. No matter where they are located, be it locally or abroad. And, GDP which is the value of final goods and services produced within a country no matter whether the factors of production are home or foreign (McDaniel, 2008).

According to Wikipedia the free encyclopaedia, (2018) an import is a good brought into a jurisdiction, especially across national borders from external sources. The party bringing in the good is called the importer. An import in the receiving nation is an export from the sending country. Importation and exportation are the defining financial affairs of international trade. More so Kimberly Amadeo, (2017) also defined imports as foreign goods and services bought by residents of a country. Residents here include citizens, businesses and the government. It doesn‟t matter what the imports are or how they are sent, they can be exported, sent by mail or even hand-carried in personal luggage on a plane if they are produced overseas and sold to domestic residents, and therefore they are imports. Even tourism products and services are considered as imports.

Trade is not a modern invention. International trade today is not qualitatively different from the exchange of goods and services that people have been conducting for thousands of years. The motivation for a country to import products and services from other countries is however less obvious than its motivation for selling exports (making a profit on goods not used up by the domestic market). As with exports, the aim served by imports differ from country to country. Let‟s explore these different purposes by starting with asking why countries like the United States (North America), China (Asia), Germany (Europe), and South Africa (Africa) with its massive and extraordinarily different economy, would need to import anything from other countries.

In the United States for instance import goods such as tungsten and oil, which are either not produce at all or are not provided in sufficient quantities to serve domestic requirements at a reasonable price. The United States cannot meet up its oil consumption needs exclusively through domestically produced oil; in 2010 the U.S. consumed roughly 19.2 billion barrels of oil per day (Central Intelligence Agency, 2010). However, the U.S. only produced about 5.5 billion barrels of oil per day (U.S. Energy Information Administration, 2012). This means that the U.S. had to import 71 percent of its oil to meet its consumption needs in 2010. Most of these imports come from Saudi Arabia, Canada, Mexico, Nigeria, and Venezuela. The imports of the United States are not limited to oil and tungsten, is the world‟s largest economy, it would be expected that this country would be self-sustained, but the 2015 statistics on importation proved contrary. The United State of America imports a variety of good from other countries making it the world‟s leading importer. The statistics for 2015 outlined below shows a summary of the importations of that year in the United States of America;

1.2. Statement of the problem

The advent of globalisation has brought increased in the production and demand for goods and services (Brecht and Martin, 1996). Consequently, private and public sector firms in both developing and developed economies have undertaken to make these goods available in areas of shortages and preference. Effective and efficient importation enhances a countries economy, leads to self-employment, reduces dependence on government and leads to the creation of new and innovative job opportunities (Manson, McCartney, and Sherer, 2001).

The experience of advanced countries in managing importations requires considerable skills, resources, infrastructure and honesty. However, this is typically in short supply in DCs. Government officers appointed to lead importation terminals have little or no knowledge in the requirements needed to conduct these institutional structures successfully. The consequences are therefore standing structures with a “laiser fair” style of leadership, little or no accountability, vast bureaucracy, and non-respect of due process.

In Cameroon, in particular, a lot has been said and even more left unspoken about the environment of importation in Douala Port. For instance, popular opinions hold that the current atmosphere is plagued with a lot of ills (bribery and corruption, theft, bureaucracy, high custom duties, long time lag) especially in the areas of clearing of goods from the various seaports once they have been imported. Consequently, there are testimonies of abandonment of imported goods at the seaport for long period of time and over  congestion. Also, other opinions are that many interested individuals especially importersare looking elsewhere for business and a source of income because of the long, expensive and extensively bureaucratic process with hints of bribery and corruption. The few bold individuals courageous and with “pockets deep enough” to take up this activity complain of the high prices involved in the clearing of these goods which sometimes they say even exceeds the cost of the products themselves.

However, the above opinions and testimonies regarding importation challenges in the Douala port are not conclusive because no existing study is available to ascertain such claims. This has triggered the researchers to find out and address the following main question: “What are the challenges faced by car importers in Cameroon”? Such forms the bases for this research.

1.3. Main objective

The main objective of this study is;

To evaluate the challenges faced by car importers Cameroon.

1.3.1.   Specific Objectives

Specifically this study seeks to:

1. To identify the legal frame work challenges for car importation in the Douala Port.
2. To identify the process challenges of cars clearance in the Douala port.

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