Cameroon Economy & Development
Estimated GDP: US $ 38.7 billion (2018)
Per capita income (purchasing power parity 2017): $ 3700 (2017 est.)
Human Development Rank (HDI): Rank 153 of 189 (2019)
Population below nat. Poverty line: 37.5% (2014)
Distribution of income (Gini coefficient): 46.5 (2014)
Economic Transformation (BTI): Rank 94 of 137 (2020)
Cameroon’s economy is market-based. The monopoly position that the state held in many branches of the economy until well into the 1990’s has largely been dismantled. Foreign companies in particular benefited from the great wave of privatization over the past 10 years, with French, South African and US companies among the winners. In the tertiary sector, which generates around half of the GDP, 22% of the active population work, in the secondary sector, with a share of over 25% of the GDP, 9% of the employees work and in agriculture, which was once the most important economic sector, is still always over 60% employed.
Current economic situation
According to loverists, Cameroon is a country located in Central Africa. Whether African Development Bank Group or GTAIUltimately, they come to similar results: after the economic decline in 2007 to 2009 due to the deterioration in the trade balance, lower tax revenue, the food crisis and the energy deficit, partly as a result of the global economic and financial crisis, but partly also for “homemade” reasons, the growth rates reached around 6% in 2014 and 2015, and then leveled off at around 4%. This was justified with the global drop in oil prices, the precarious security situation in North Cameroon and the competition from the devaluation of the Nigerian naira in mid-2016. In view of the Corona Pademie and the precarious security situation in the north and in the Anglophone region, a slump to -1% for the 2020 forecast.
The primary sector (approx. 23% of GDP) is currently mainly stimulated by subsistence agriculture and less by traditional export “cash crops”. The use of higher-yielding varieties and the expansion of the infrastructure and, as a result, stronger domestic trade, including with neighboring countries, contributed to this growth success.
In the industrial sector (approx. 28% of GDP), food processing companies and the construction sector in particular performed well due to government-funded infrastructure measures, as did the raw materials industry. However, the energy shortage continues to represent the greatest brake on economic development. Although Cameroon is not as dependent on oil as other African oil exporters, the collapse in oil prices is still having an impact on the Cameroonian economy. Due to the external financing of major state infrastructure projects, external debt is increasing sharply and is now (2018) around 33% of GDP.
In the service sector (approx. 50% of GDP) the telecommunications, transport and financial services boomed.
Due to the calming of food prices, the initially high inflation rate (5.3% in 2008) fell sharply and remains below 3%.
Before Corona, the economic trends in Cameroon were assessed as moderately good. The business climate that is hostile to investment is lamented. There are many reasons behind this: from a lack of infrastructure, obstacles in cross-border trade, bureaucratic hurdles (e.g. property registration), hindrances from the judiciary and financial administration to corruption.
While business start-ups and access to credit (CEMAC-wide) have been made easier, almost nothing has changed in the areas of taxation, insolvency regulation or investor protection in the last ten years.
Economic Impact of the COVID Pandemic
Despite the high infection rate compared to other Central African countries, there was initially cautious optimism about the economic impact of the pandemic. Economic growth was expected to be 3% lower, so the economic data would have remained in the positive range of 1-2%.
Meanwhile the mood got worse because of the effects make the COVID pandemic noticeable in many ways. The border closure brought tomato sales to Gabon and Equatorial Guinea to a standstill and the internal market for agricultural products also collapsed. Small businesses and service providers are particularly affected. Many businesses give up. Educational institutions, restaurants, the mining industry and forestry are cutting jobs and / or cutting salaries.
Reinterpretation of the 5000 F CFA bill
The economic development of Cameroon has experienced great fluctuations over time and has both highs and lows.
After gaining independence, Cameroon’s economic policy in the 1960’s and 1970’s focused on growth through industrialization and increased production of agricultural export products. At the beginning of the 1980’s, thanks to the oil boom, Cameroon, along with South Africa and Nigeria, was considered a well-off country by African standards. It had the reputation of a “model country”.
High government spending on prestige projects and an inflated state apparatus, coupled with unfavorable global economic conditions, resulted in massive internal and external debt, which led to Cameroon’s economic collapse in the late 1980’s to early 1990’s. Several of the IMF’s structural adjustment programs were largely unsuccessful. At the end of the 1990’s, Cameroon was one of the poorest countries and qualified as a HIPC (decision point) country in October 2000. The condition for debt relief: Cameroon had to submit to a special structural adjustment program. Among other things, the preparation of a strategy paper on poverty reduction and measures against corruption was requested. In April 2006 Cameroon reached the”Completion point” and in June 2006 the time had come: Cameroon got a large part of its debts canceled by the Paris Club.
Since the economic crisis in the 1990’s, the Cameroonian government has published statements and declarations of intent on economic and financial policy at regular intervals in order to prove its “good will” to international donors. The continuation of the privatization of state-owned companies, a diversification of products or a strengthening of the non-oil sector, the creation of an investment-friendly climate, an increase in state revenues and corresponding expenditure monitoring as well as transparency and the fight against corruption are much-cited objectives of Cameroonian economic policy.
In 2011 Paul Biya declared the ” Vision 2035 “, Cameroon’s economic roadmap for achieving the status of an emerging market. One of the foundations of this ambitious, World Bank-backed program is the strategy paper on growth and jobs from 2009.
The privatization of state and parastate companies is very controversial in Cameroon. Opaque business practices and the stirring up of old and new lines of conflict, such as between Anglo-Phones and Francophones, repeatedly aroused skepticism towards this instrument. Many privatizations also did not bring the desired improvement in performance. Nevertheless, the privatization plans that have since stalled are to be taken up again.
After the state Société Nationale des eaux du Cameroun (Snec) was privatized, the drinking water supply existed for 10 years as a public private partnership (PPP) on the basis of output-based aid. The state-owned national water supply Camwater had leased part of the water network to a private provider, Camerounaise des Eaux (CDE). Camwater was responsible for the expansion of water infrastructure, CDE took over operation and maintenance, – a non-transparent mesh that many questions about the water supply was open and in 2018 his end was.