A Free Trade Zone (FTZ) or Export Processing Zone (EPZ) is one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in view of attracting new business and foreign investments.
Most free zones are located in developing countries. Bureaucracy is typically minimized by outsourcing it to the Free Trade Zone. Operators and Corporations setting up in the zone may be given tax breaks as an additional incentive. Usually, these zones are set up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the area’s economy. The zones are often used by multinational corporations to set up factories that produce goods (such as clothing and shoes).
With Cameroon, just like any other developing country where every effort is being made to revamp its economy, it is generally believed that investment is the active seed which generates growth and development. This seed should then be sown on the most favourable ground by removing traditional constraints such as:
- Complexity and rigidity of administrative procedures.
- Deficiency of the domestic private sector.
- Lack of influence on the international market.
- Technological deficiency.
In this regard, Cameroon is doing everything possible to streamline administrative channels, accelerate procedures that promote a domestic private sector to enable local and foreign investors to establish partnerships in the creation of new export-oriented ventures.