Cameroon
2014
Richard-Antonin Doffonsou / r.doffonsou@afdb.org
Lisa Simrique Singh / lisa.singh@undp.org
www.africaneconomicoutlook.org
Cameroon
Cameroon
• GDP growth in 2013 reached 4.9% and should stay around this level in 2014 and 2015.
• Cameroon has remained stable in a region marked by political and security crises but
must use growth to reduce poverty.
• Cameroon has a limited role in global value chains but has a proactive policy to
develop the promising agriculture, forestry and livestock and fisheries sectors.
Overview
Despite a difficult global context marked by lower commodity prices and deteriorating terms
of trade, domestic economic activity has remained solid. Domestic demand has continued to
grow, driven by major infrastructure projects and measures to revive production in several
sectors. Growth recorded in 2012 was consolidated in 2013, although it was slightly lower than
forecast. This growth was driven mainly by the tertiary sector, which accounted for 47.8% of gross
domestic product (GDP), one percentage point higher than in 2012, thanks to strong performances
by the transport, telecommunications, trade and hotel and catering industries. Growth was also
supported by a recovery in certain branches of the secondary sector, with strong performances by
the construction and extractive industries (oil and gas) and investments in basic infrastructure.
This growth trend is forecast to continue in 2014 and 2015.
In 2013, Cameroon produced a medium-term budgetary framework in line with a directive
issued by the Economic and Monetary Community of Central Africa (CAEMC) on programme
budgets. The framework is in line with the growth and employment strategy paper for 2010-20
(Document de stratégie pour la croissance et l’emploi, DSCE), emphasising growth and employment
and focusing action on developing infrastructure through major energy, transport and
telecommunications projects. In addition to these actions to reduce production-factor costs,
measures have been taken to support the modernisation of Cameroon’s production equipment,
especially in the agricultural sector (tractor assembly plant in Ebolowa), and to support the
development of manufacturing industries (leasing). The aim is to ensure that natural resources
are exploited judiciously – especially in the agriculture, forestry and livestock and fisheries
sectors – by growing the value chain of promising sectors (cotton, textile and clothing; timber;
cocoa; rubber; etc.) through the promotion of agri-business. This strategy contributes to fiscal
sustainability by reducing the country’s strong dependence on export revenue and oil prices. The
strategy also aims to strengthen competitiveness by incorporating a larger market share into
intra-regional trade. Achieving this objective will be helped by additional roads leading to the
main sub-regional markets in CAEMC countries and Nigeria.
Parliamentary and local elections ran smoothly, bolstering socio-political stability in a region
plagued by political and security crises. These elections redistributed the roles of the president’s
ruling party and the opposition, but the president still holds a comfortable parliamentary majority,
allowing his party to legislate without risk.
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Cameroon
Figure 1. Real GDP growth
Real GDP growth (%)
Central Africa (%)
Africa (%)
%
12
10
8
6
4
2
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013(e)
2014(p)
2015(p)
Source: AfDB, Statistics Department AEO. Estimates (e); projections (p).
Table 1. Macroeconomic indicators
2012
2013(e)
2014(p)
Real GDP growth
4.4
4.9
5.0
2015(p)
5.1
Real GDP per capita growth
1.9
2.4
2.5
2.7
CPI inflation
2.4
2.3
2.5
2.5
Budget balance % GDP
-1.9
-3.7
-4.1
-4.6
Current account balance % GDP
-3.3
-3.3
-3.4
-3.6
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations.
Recent developments and prospects
Energy supplies increased in 2013, but remain insufficient to meet demand. This situation
should improve in 2014, with the Kribi gas-fired power station set to open. The supply of electricity
should gradually increase and become more reliable, reducing the frequency of load shedding. In
2013 the recovery of extraction industries consolidated, thanks notably to the opening of new oil
and gas wells. The agricultural sector recorded gains once again in the north of the country, after
floods in 2012 severely disrupted agricultural production cycles.
Nevertheless, the economy was hit somewhat by poor performances in the agriculture and
forestry sectors (cotton, cocoa, timber), which are exposed to the volatility of commodity prices.
The unattractive business environment and high production-factor costs continue to weigh
heavily on local industries’ competitiveness. Consequently, real GDP growth was below the DSCE
target of 5.5% for the 2010-20 period, reaching only 4.9%.
The GDP supply structure is still dominated by the tertiary sector (47.8% of GDP). The primary
and secondary sectors have seen their shares of GDP fall to 22.5% and 29.7%. The fastest-growing
sectors (see Table 2 below) are trade, hotels and restaurants (19.9% of GDP), agriculture (16.9%),
manufacturing (14.5%), and the extractive industries (8.2%). Together, these five sectors account
for 60% of GDP.
The primary sector experienced a slowdown in 2011 and 2012 caused by the poor performance
of export-based industrial agriculture (-3.7% in 2012), but recorded growth of 3.6% in 2013. This
trend is bolstered by the upturn in export-based industrial agriculture and the strong growth in
subsistence agriculture. These sectors have benefited from a number of factors: i) XAF 3 billion
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(CFA Franc BEAC) were granted for purchasing agricultural equipment for the two main riceindustry operators (SEMRY and UNVDA); ii) producers were provided with fertilisers, pesticides
and several high-yield seed varieties (rice, maize, cassava, plantain, potato, yam, sorghum, etc.);
iii) the cotton agro-industry (SODECOTON) obtained loans for XAF 6.5 billion and XAF 10 billion
in February 2011 and March 2012 respectively from local banks to operate the 2011/12 and
2012/13 seasons; and iv) new coffee and cocoa farms began production. Despite these factors, the
slowdown in the global economy, especially in the euro area and in China, has reduced demand
for certain primary products exported by Cameroon, especially in forestry and logging.
Secondary-sector growth increased from 4.9% in 2012 to 5.7% in 2013. This acceleration
can be attributed to the upturns in oil production (+4.5%), construction (10.5%), and electricity
production (+6.5%) since the opening of the Kribi gas-fired power station and its knock-on effects
on the other manufacturing industries, which recorded real growth of 5.2%.
Tertiary-sector real growth was 5.9% in 2013, up from 5.5% in 2012, thanks to the upturn in
the primary and secondary sectors. Moreover, the increase in the transport sector’s supply-side
capacity, especially road and rail transport, and the continued expansion of fibre optics helped
drive strong growth in the transport and communications sectors (8%)1,2.
On the demand side, GDP growth has been driven by domestic demand, which grew by 5.9%.
Although net external demand improved, it remained negative with an estimated deficit of 8.3% of
GDP, with imports increasing, especially food (rice, fish, etc.), construction material (cement, etc.)
and capital goods for major infrastructure projects.
Private consumption grew by 5.2% in 2013, as household income increased thanks to the
payment of salaries and allowances to young graduates working in the civil service and
recruitment for major infrastructure projects. However, public consumption growth slowed in
2013 to 1.7% (from 6.6% in 2012) due to delays in the spending of loans provided to public bodies,
which needed time to adapt when programme budgeting was introduced. Overall, consumption
represented 88.3% of GDP in 2013.
After a slight slowdown in 2012, the investment rate rebounded 0.8 percentage points to 20%
of GDP, thanks mainly to a half percentage point rise in public investment for major infrastructure
projects. Private investment increased by 0.3 percentage points, benefiting from investment
facilities provided by the government, a 12.3% rise in bank lending to the private sector, a larger
supply of energy, and the knock-on effects of major infrastructure projects. Investment in mineral
and oil exploration, meanwhile, should increase now that Cameroon has been declared compliant
with the Extractive Industries Transparency Initiative (EITI).
The outlook for 2014 and 2015 is good. The extractive industries (mainly oil and gas) are
expected to continue the upward trend in 2012-13 thanks to improved yields expected from
existing wells (in the Rio Del Rey field), the start of operations on new deposits (M’via, Dissoni),
gas production (Sanaga South) mainly for use at the Kribi gas-fired power station, and more
intensive exploitation of the Logbaba gas field.
The primary sector’s growth prospects remain good, with the opening of new cocoa, coffee,
cotton, rubber, palm oil, maize and rice farms and the continued modernisation of farming
techniques, including promoting mechanisation and distributing fertilisers, seedlings and highyield seeds. The fisheries sector is also expected to grow. Primary-sector growth could reach 5.7%
in 2014 and 9.0% in 2015.
Unlike in 2013, when the Kribi gas-fired power station was only operational during the final
six months of the year, in 2014 the additional energy supply (+216 megawatts) will be available
to industries throughout the year. There has also been a diversification of industrial energy
sources, with the progressive introduction of a cheaper, more regular industrial gas thanks to a
pipeline built in the Douala industrial zone by Rodeo Development Limited for an investment cost
estimated at XAF 45 billion. These developments in the energy supply and the new investment
facilities (the 2013 Private Investment Incentives Act) bode well for an upturn in industrial
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activity in 2014 and 2015. The construction sector, meanwhile, will remain strong in 2014 and 2015
thanks to the construction of the Lom Pangar, Memve’ele and Mekin dams, the start of work on a
second bridge over the River Wouri and road infrastructure. Finally, large-scale semi-industrial
and industrial exploitation of the country’s abundant mineral resources (iron, diamond, bauxite,
cobalt, etc.) should further boost growth. Consequently the government is in the process of
revising the current mining code to produce a more attractive code. Forecasts predict secondarysector growth of 5.0% in 2014 and an average of 5.6% between 2015 and 2018.
The tertiary sector should benefit from high growth in the other sectors as well as from
capacity-building for services in the transport, telecommunications and hotel and restaurant
industries. The tertiary sector is therefore forecast to grow by 5.4% in 2014 and 5.5% in 2015. Real
GDP growth should hover at around 5% from 2014, despite uncertain world growth.
Table 2. GDP by sector (percentage)
2008
2013
23.4
22.5
of which fishing
1.3
1.2
Mining
9.6
8.2
of which oil
9.5
8.1
15.0
14.5
Electricity, gas and water
1.1
1.0
Construction
3.3
6.0
21.3
19.9
Agriculture, hunting, forestry, fishing
Manufacturing
Wholesale and retail trade, hotels and restaurants
of which hotels and restaurants
1.5
0
Transport, storage and communication
6.7
7.2
Finance, real estate and business services
10.5
11.0
Public administration, education, health and social work,
community, social and personal services
8.0
8.5
Other services
1.2
1.2
Gross domestic product at basic prices / factor cost
100
100
Source: Data from domestic authorities.
Macroeconomic policy
Fiscal policy
As in the previous two years, Cameroon adopted a moderately expansionary fiscal policy in
2013 due to investment in major infrastructure projects. The additional expenditure was financed
by external borrowing and oil revenue. Fiscal policy has sought to ensure compliance with the
convergence criteria: i) a primary fiscal surplus; ii) inflation at or below 3%; iii) domestic and
external debt below 70% of nominal GDP; and iv) no backlog of domestic and external arrears. The
2013 fiscal year was marked by the introduction of a major reform resulting from the new financial
regime adopted in 2008. The first programme budget was implemented following the transition
from line-item budgeting to programme budgeting, in accordance with CAEMC Directive No.
S1/11-UEAC-190-CM-22 on finance laws.
According to estimates in late December 2013, fiscal performance deteriorated in 2013 due
to poor revenues and some cost overruns. Revenue and grants are estimated at around 17.8% of
GDP (after cross-cancellation of the grant to the national refining company SONARA with taxes
owed by the latter to the government), around 1 percentage point below projections. This poor
performance was mainly due to lower taxes on goods and services. Due to the high operating
costs of oil operations, oil revenue – which is not earmarked as a specific expenditure according
to the treasury single-account principle – fell slightly as a proportion of GDP to 4.8% in 2013
(against 5.4% in 2012 and 5.3% in 2011), even though production exceeded projections. Current
expenditure increased from 14.2% in 2012 to 14.8% in 2013, largely thanks to fuel-consumption
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subsidies. Representing 19.5% of current expenditure and 3.3% of GDP, these subsidies pose a
risk to fiscal sustainability. Investment expenditure, meanwhile, increased its contribution to
GDP by 0.8 percentage points thanks to major infrastructure projects. However, this increase was
dampened by reforms to public procurements and the problems posed by the introduction of
programme budgeting for the first time. The government decided to extend the supplementary
budget execution period.
These budgetary challenges concerned both expenditure, with the continuation of fuel
subsidies, and revenue, with poor mobilisation of domestic and external financing. Consequently,
payments amounting to 3.9% of GDP were deferred to the 2014 financial year. Subject to changes
during the supplementary period, the overall fiscal deficit (see Table 3 below) for 2013 is estimated
at 3.7% of GDP, compared to 1.9% in 2012 and 3.6% in 2011.
Table 3. Public finances (percentage of GDP)
Total revenue and grants
2005
2010
2011
2012
2013(e)
2014(p)
2015(p)
18.2
16.6
18.2
18.3
17.8
17.7
17.2
Tax revenue
10.4
10.3
11.0
11.0
11.1
11.0
10.9
Oil revenue
5.0
4.2
5.3
5.4
4.8
4.7
4.4
Total expenditure and net lending (a)
14.4
17.7
21.7
20.2
21.6
21.8
21.8
Current expenditure
12.1
13.8
15.3
14.2
14.8
15.3
15.6
10.6
13.5
15.0
13.8
14.5
14.8
15.1
Wages and salaries
4.7
5.4
5.6
5.5
5.7
5.9
6.0
Interest
1.5
0.3
0.4
0.4
0.3
0.5
0.5
Capital expenditure
2.4
3.9
6.4
6.0
6.8
6.5
6.2
Primary balance
5.3
-0.8
-3.2
-1.5
-3.4
-3.7
-4.1
Overall balance
3.8
-1.1
-3.6
-1.9
-3.7
-4.1
-4.6
Excluding interest
Note: a. Only major items are reported.
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors' calculations.
Monetary policy
Cameroon is a member of CAEMC and its monetary policy is conducted by the Monetary Policy
Committee (MPC) of the Bank of Central African States (BEAC). The MPC’s national responsibilities
are exercised by the Monetary and Financial Committee. The BEAC’s monetary policy has
sought to stabilise prices and the real effective exchange rate and to prevent public spending
from crowding out private investment. After three years of a rather restrictive monetary policy
between 2010 and 2012, even though inflation complied with the CAEMC convergence criteria,
the BEAC moved to an expansionary monetary policy implemented through two instruments:
refinancing and reserves. The MPC reduced the advance rate (intervention rate) for banks from
3.5% to 3.25%. The required reserve ratio for Cameroon’s banks is 11.75% for sight deposits and
9.25% for time deposits. As a result, money supply grew by 7.7% in 2013 from XAF 3.07 trillion
to XAF 3.31 trillion; in 2012 it grew by only 1.4%. Credit to the economy (domestic credit) also
increased by 30.3% between 2011 and 2013, benefiting the private sector (+14.6%) in conjunction
with the financing of major infrastructure projects.
Due to the nature of goods traded with the countries of the euro area (mainly oil and minerals,
the prices of which keep rising) and the weak link between local banks and those of their parent
companies in Europe, Cameroon was not contaminated by the euro-area crisis. There were no
shocks to the domestic climate, despite parliamentary and local elections. Inflation, which is
strongly correlated with food prices, remained below CAEMC’s 3% convergence threshold in 2013,
despite the expansionary fiscal and monetary policy. The rate increased by only a tenth of a
percentage point to 2.5%, thanks notably to the recovery of the agro-pastoral sector, which was
hit by flooding in 2012.
Economic co-operation, regional integration and trade
Cameroon is a member of nearly all the sub-regional institutions, and has ratified corresponding
agreements and treaties. It participates actively in regional integration among the CAEMC and
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Economic Community of Central African States (ECCAS). The country is implementing the Short
Term Action Plan of the New Partnership for Africa’s Development (NEPAD) in Central Africa
(PACT-NEPAD-AC). The CAEMC has introduced a common external tariff for trade. Cameroon has
made no significant progress in the trade indicator of the World Bank report Doing Business 2013,
but no measures have been introduced that restrict trade, of which it is the main beneficiary in
the region. However, the region as a whole is held back by difficulties transposing CAEMC texts
into national legislation and problems related to product origins and compensation mechanisms.
Cameroon plays a leading role in the Central Africa region, with a strong GDP, a large
money supply and strong exports. During the first ten years of the new millennium, Cameroon
accounted for 40% of CAEMC’s GDP, 44% of its money supply and 39% of its exports. Cameroon’s
geographical location makes it a key country of transit towards inland countries, while its more
diversified economy naturally allows it to trade strongly with other CAEMC countries and beyond
into Nigeria. Its key CAEMC partners are Equatorial Guinea (30% of trade), Chad (27%), Republic
of Congo (25%) Gabon (11%) and the Central African Republic (7%). Cameroon has a trade surplus
with all CAEMC countries except Equatorial Guinea. Outside CAEMC, Nigeria3 – with which it
shares a border that is more than 1 000 km long – remains Cameroon’s main trading partner,
ahead of the major European economies.
Despite the continued current account deficit in 2013, maintained by deficits for goods,
services and income, the overall balance was positive according to estimates. In 2012, there was
a positive balance of payments of XAF 47.6 billion, up XAF 211.7 billion from the XAF 164.1 billion
deficit in 2011. This improvement was largely driven by the upturns in oil production and exports
of other key goods. Furthermore, the gradual reduction of imports of capital goods and crops
(rice, maize, etc.) and additional external financing in 2014 and 2015 should also help to maintain
this upward, positive trend in the balance of payments.
Table 4. Current account (percentage of GDP)
2005
2010
2011
2012
2013(e)
2014(p)
0.3
-0.9
-2.2
-1.2
-2.2
-2.5
-3.1
Exports of goods (f.o.b.)
17.7
19.1
21.3
21.3
19.4
18.7
17.7
Imports of goods (f.o.b.)
17.4
20.0
23.4
22.5
21.6
21.2
20.8
Services
-2.2
-2.3
-0.5
-1.1
-0.9
-0.6
-0.1
Factor income
-2.9
-1.1
-1.1
-1.7
-1.0
-0.9
-0.9
1.5
0.9
1.0
0.8
0.8
0.6
0.6
-3.4
-3.4
-2.8
-3.3
-3.3
-3.4
-3.6
Trade balance
Current transfers
Current account balance
2015(p)
Source: Data from the Central Bank and domestic authorities; estimates (e) and projections (p) based on authors'
calculations.
Debt policy
In 2012, Cameroon’s outstanding public and publicly guaranteed debt increased in nominal
terms by 9.8% from an estimated XAF 2.23 trillion to an estimated XAF 2.45 trillion. In terms of
GDP, however, it fell by almost one percentage point from 18.5% to 17.8%. Public debt accounts
for 88.7% of the total, while government guarantees account for the remaining 11.3%. The total
amount of domestic and external finance commitments was XAF 1.01 trillion, 18% below the 2011
figure. The bulk of these commitments were for infrastructure, especially roads (45%), energy
(19%) and telecommunications (10%).
In 2013, the government continued to seek debt financing to support its huge programme for
building major infrastructure to maintain growth. The proportion of external borrowing was
50.7%, and domestic borrowing was 49.3%. The government aims to increase the proportion of
external borrowing to 55% by 2017. The aim is to reduce the proportion of outstanding external
public debt (64.5% at end-2012) to 63% by 2017.
Since debt was cancelled under the Heavily Indebted Poor Countries initiative in 2006,
Cameroon’s debt distress rating has been low. According to the debt sustainability analysis
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conducted jointly by the World Bank and the International Monetary Fund (IMF), all external
debt ratios remain below their thresholds. However, the predominance of non-concessional
borrowing observed in recent years needs to be contained and borrowing needs to be used to
finance projects that are profitable enough to stimulate growth.
Including new borrowing, Cameroon’s public debt-to-GDP ratio stood at 20.1% in 2013 (see
the figure below), making it very sustainable. This ratio could be reduced to 12.8% by 2017
with stronger growth. Compared to CAEMC’s critical debt-to-ratio threshold of 70%, Cameroon
has plenty of margin to continue its development without running the risk of breaching the
convergence criteria.
A debt committee co-ordinates the country’s debt policy and ensures it is coherent with
Cameroon’s development objectives. Nevertheless, capacity-building is necessary to improve the
country’s management of non-concessional loans, which are increasingly being used to finance
major infrastructure projects.
Figure 2. Stock of total external debt
Outstanding debt (public and private) /GDP
%
Debt service/Exports
40
35
30
25
20
15
10
5
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: IMF (WEO & Article IV)
Economic and political governance
Public sector
Cameroon has one of the most diverse and dynamic private sectors among CAEMC member
states. According to the 2009 business census, there are around 94 000 businesses and other
entities in the formal sector, most of which are small and medium-sized enterprises (SMEs).
Private-sector development is held back by a number of factors: i) the electricity supply is
insufficient and intermittent; ii) weak public governance hinders investors’ economic calculations;
iii) institutions to promote the private sector are weak, often lacking the human, technical and
financial resources to fulfil their missions; iv) capital is expensive and hard to access; v) the
additional cost of technical production; and vi) the basic infrastructure is poor quality.
Despite some reforms, the business environment remains unfavourable. In the World Bank
report Doing Business 2014, Cameroon has slipped seven places down the Ease of Doing Business
Rank from 125th in 2013 to 132nd. Furthermore, the government’s accumulation of domestic arrears
weakens corporate cash flow, which raises the cost of public procurement. The lack of long-term
resources and high interest rates hold back private investment.
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To develop the potential of agriculture, livestock and fisheries in the value chains, the
government plans to stimulate agribusiness. Legislation on investment incentives was passed in
April 2013. A more attractive mining code is being prepared and will be put before the national
assembly in 2014. Meanwhile, the commitments made in discussions at the Cameroon Business
Forum will be carried out in 2014. These measures include: i) making legislation on economic
zones passed in December 2013 operational; ii) implementing the strategy to make foreigntrade procedures paperless; iii) consolidating a one-stop shop for land transactions introduced
in 2012; iv) extending the network of business-creation regulation centres (centres de formalités de
création d’entreprises, CFCEs); v) setting up planned automatic tax payment centres; vi) introducing
application processing times for commercial disputes handled by specialised commercial
tribunals; and vii) cutting paperwork from the one stop shop for foreign trade.
Financial sector
Cameroon has a multitude of banks, but the system is not diversified. The system is
dominated by traditional banks, specialist banks and business banks, but there are no investment
banks, which substantially limits the capacity to mobilise long-term resources. Moreover, the
cost of resource mobilisation, even with excess liquidity, remains high. Despite a high level
of bank capitalisation, interest rates are high, making credit unattractive. A quarter of credit
goes to wholesale and retail, restaurants and hotels. The other sectors that receive most credit
are construction (17%), the extractive industries (12.4%), social and personal services (12.4%),
agriculture, livestock, fisheries and forestry (11.9%), and transport and communications (8.1%).
The financial sector continued to be developed in 2013. Efforts focused on promoting the
spread of finance, with the authorities supporting a guarantee mechanism that has XAF 5 billion
of funding. The fund’s management structures, including the monitoring mechanism, are in
place, and the eligibility criteria are known. In addition, substantial progress has been made in
setting up a bank for financing SMEs, with the appointment of directors due to take place.
On the whole the Cameroonian financial sector is in good health and several banks are relatively
solid and comply with prudential standards. Nevertheless, an IMF report published in November 2013,
after the organisation’s consultation mission, said there were threats to the stability of the financial
sector that required urgent action, especially five banks in difficulty. The main risks that could cause
instability are related to the concentration of credit in a small number of sectors and a small number of
businesses. These risks also reflect the high level of government arrears owed to SONARA, leading to a
worrying rise in government debt with the Cameroonian banking system. These banks will be closely
monitored by the Central African Banking Commission (COBAC). The authorities are also introducing
strong measures to improve banks’ financial situation and prevent any systemic risks.
Public sector management, institutions and reform
Two major public sector management reforms were introduced in 2013. As part of the
implementation of the new financial system and programme budgeting, the Ministry of Public
Procurement was created and attached to the president’s office. The ministry is responsible for
conducting all public procurement for all government ministries and bodies4.
The public sector is still highly fragmented, resulting in powers overlapping between one
ministry and another, as well as wasted resources and limited effectiveness. Reforms are under
way to strengthen co-ordination between different areas of government without affecting the
spirit of decentralisation of the past few years, when certain responsibilities were devolved to
regional and local authorities.
Finance laws have been passed to improve transparency and admissibility. There are institutions
for the internal and external control of public accounts: the inspectorate-general of each sectoral
ministry, the Inspectorate-General of the Ministry of Finance, the Audit Bench, the Supreme State
Audit Office (CONSUPE) and the National Anti-Corruption Commission (NACC). The Audit Bench
assists the parliament and the government in monitoring enforcement of the finance laws5.
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Reports on public debt are published. Also, Cameroon achieved the status of EITI compliant
country in October 2013. As such, it is implicitly obliged to produce EITI reports annually. The 2012
report is expected to be published on 31 December 2014, and the 2013 report by 1 July 2014. Civil
society has statutory representation in the EITI, giving it access to information on all physical and
financial flows in the extractive industries. Natural resource management and environment
A tenth of the Congo Basin forests lie in Cameroon, covering 41.3% of the country. Cameroon’s
economy relies heavily on exploiting these natural resources. The government is therefore very
sensitive to environmental protection and forest conservation. It has signed most international
environmental conventions, including the Convention on Biological Diversity, the United Nations
Convention to Combat Desertification (UNCCD), the Stockholm Convention on Persistent Organic
Pollutants and the UN Convention on Climate Change. The government has adopted a national
anti-desertification action plan that highlights the vulnerability of the semi-arid (the Sahel) and
coastal regions to climate change6.
The country is engaged in the process to reduce emissions from deforestation and forest
degradation (REDD+), especially in developing a national REDD+ strategy. In this context, the
Participants Committee of the Forest Carbon Partnership Facility has approved Cameroon’s
Readiness Preparation Proposal. This approval should allow Cameroon to obtain REDD+ funding.
Moreover, since it signed a Voluntary Partnership Agreement under the European Union’s Forest
Law Enforcement, Governance and Trade (FLEGT) Action Plan, efforts have been made to increase
governance in the forestry sector. A new mining code is being drafted to allow judicious use of
mineral resources in compliance with environmental norms. The government has introduced an
anti-poaching strategy in response to the rise in elephant poaching.
The country was declared EITI compliant at the end of 2013. The sectors covered by this
declaration before 2013 were oil and gas. The new decision means that Cameroon must now
produce a balance sheet, maintain rigorous transparency and extend the area covered by the EITI
to the nascent mining sector.
Cameroon’s legislation does not require specific accounts for revenue obtained from the
extractive industries (mining and hydrocarbons) and the forestry industry. The revenue goes to
the treasury based on the single-account principle. However, it is clear that the revenue is mainly
invested in major infrastructure projects.
Political context
Parliamentary and local elections were held in 2013, and the senate, which guarantees the
country’s political stability, started operating. In legislative elections on 30 September 2013, the
ruling Cameroon People’s Democratic Movement (CPDM) took 148 of the 180 seats in the National
Assembly. The other parties that took seats were the Social Democratic Front (SDF, 18 seats), the
National Union for Democracy and Progress (Union nationale pour la démocratie et le progrès, UNDP,
5 seats), the Democratic Union of Cameroon (Union démocratique du Cameroun, UDC, 4 seats), the
Union of the Peoples of Cameroon (Union des populations du Cameroun, UPC, 3 seats), the Movement
for the Defence of the Republic (Mouvement pour la défense de la République, MDR, 1 seat) and the
Cameroon Renaissance Movement (CRM, 1 seat). The use of biometrics has improved the electoral
register and the accuracy of results.
However, the political context is marked by grave political and security crises in neighbouring
Central African Republic and incursions and kidnappings in the north of the country by extremist
groups allied to the Nigerian sect Boko Haram. Increased security and defence expenditure
spending would reduce social spending and further weaken budgetary equilibrium.
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Social context and human development
Building human resources
Although the country’s macroeconomic performance has been positive, the results fall short
of the country’s ambitions. Despite progress in some indicators, achievement of the United
Nations’ Millennium Development Goals (MDGs) will not be reached by the 2015 target date.
Government policy on education is focused on achieving goal 2 (universal primary education)
and 3 (promotion of gender equality). Cameroon has consolidated its achievements in basic
education. Primary-school enrolment stands at 123% and gross enrolment at 111%. The net
primary enrolment ratio for 6-11 year-olds has increased to 78.8%, compared to a target of 88%.
The adult literacy rate is 34.9% (41.7% for men, 27.3% for women).
In healthcare, the main objectives were to reduce childhood mortality by two-thirds, maternal
mortality by three-quarters, HIV/AIDS prevalence by half and the death rate associated with
malaria to less than 10%. Latest statistics suggest that progress in reducing infant and child
mortality should be consolidated. By 2011 child mortality had been reduced to 122 per thousand
from 142 per thousand in 2004, but this remains well above the MDG goal 4A. Progress has
been achieved thanks to a fairly effective prevention scheme, with vaccination rates among 1223 month-old infants of 87% for BCG, 68% for diphtheria/ whooping cough/tetanus (DPT), 70%
for a three-dose schedule of the polio vaccine and 71% for the measles vaccine. For measles, the
Ministry of Public Health’s 2013 roadmap indicates a coverage rate of 94.89%.
Progress has also been made in tackling the AIDS pandemic. The preliminary results on HIV
prevalence in the fourth Demographic Health Survey showed that HIV prevalence in Cameroon
among 15-49 year-olds fell considerably from 5.5% in 2004 to 4.3% in 2011. It fell among both
men (4.1% to 2.9%) and women (6.8% to 5.6%). In the first quarter of 2013, 77.11% of HIV-infected
pregnant women (2 837 of 3 679) were receiving antiretroviral drugs. However, the MDG goal 6B
has not yet been achieved.
Poverty reduction, social protection and labour
The adoption of the DSCE strategy paper was preceded by a major national household survey
in 2007, which was published in 2008. The survey found that 39.9% of the population lived below
the poverty line in 2007 compared to 40.2% in 2001. Although growth has accelerated, it has
not been strong enough to significantly reduce unemployment and poverty. Real GDP per capita
and most social indicators have stagnated, despite Cameroon’s abundant and diverse natural
resources. Inequality remains high: Cameroon’s Gini inequality coefficient is 0.39. In the past,
policies have shied away from tackling poverty. A World Bank review of public expenditure found
that since 2005 budget allocations have begun to move away from social sectors towards the
general state functions. Business reforms have not yet drawn enterprises from the informal to
the formal sector.
The household survey analysed poverty from various angles. It looked too at the depth of
poverty and perception of poverty. The data collected by Cameroon’s National Institute of
Statistics (NIS) is updated with new studies and published on the NIS website. Analyses of the
results have identified regional and local pockets of poverty. A poverty profile has been drawn
up so that social policies can be better targeted in national, regional and local budgets and in
operations by technical and financial partners. The results of this profile include health and
education roadmaps (building schools and health centres), targeted vaccination programmes for
young children, measures to combat HIV/AIDS, a social safety net programme being prepared by
the World Bank for the northern regions. The government plans to strengthen programmes for
vulnerable groups as it implements programme budgeting. © AfDB, OECD, UNDP 2014
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Gender equality
The constitution establishes equality between men and women and guarantees the same
rights. Cameroon has ratified the main international and regional legal instruments on promoting
and protecting women’s rights. Various legal instruments have gradually been incorporated into
national legislation, helping to change the status of women and improve their lives. Unlike other
countries, Cameroon has not passed a law on quotas for women in political decision-making
positions and public administration.
Nevertheless, the participation of women in government, in the two chambers of the national
assembly and in senior positions in the public administration is growing. In 2010, women held
13.1% of government posts and by 2013 this had risen to 13.5%. The proportion of women in the
national assembly increased from 11.1% during the 2002-07 legislature to 13.9% during 2007-12. In
the private sector, however, there has been very little improvement. More women than men are
unemployed, and although the proportion of women in work increased from 68.3% in 2005 to 79.5%
in 2007, in recent years it has begun to fall again, and now stands at 64.2%. In the non-agricultural
informal sector, 26.5% of salaried workers in 2010 were women, while 84.1% of those who were
self-employed or family workers were women. Women have limited access to job opportunities
because they do not have enough access to professional networks and economic information.
These factors severely hinder their access to productive resources and their empowerment.
Women also have difficulties accessing the financial sector and microfinance. Women’s access
to production credit rose from 0.4% in 2001 to 0.5% in 2007, but remains low compared to men’s
access, which declined from 1.2% to 0.9% over the same period. Because women have poor access
to credit it is also difficult for them to acquire land and land titles.
Cameroonian women still face sociocultural constraints. There are cultural aspects, such
as forced marriages, under-age marriages, practices that harm the health of women such as
excision, widowhood rites and discrimination against young girls in terms of schooling because
of the high rate of poverty. Consequently, the proportion of women with no schooling keeps
increasing. Between 2004 and 2010 it increased from 29.2% to 30.0%. The percentage of teenagers
(15-19 year-olds) who are mothers increased from 22.7% in 2004 to 25.2% in 2011. However,
awareness campaigns in recent years are beginning to show their fruit, with the number of 15-19
year-old mothers beginning to stabilise.
Thematic analysis: Global value chains and industrialisation in Africa
The proven potential of raw materials (mines, timber, agricultural products) and production
factors (electricity, arable land) have shaped Cameroon’s participation and positioning in global
value chains. The raw material-producing sectors (timber, agriculture and mining) and highvoltage electricity-consuming sectors (basic metals and cement) appear to be most involved in
global value chains. Various services sectors are also integrated into global chains: ship repair
and maintenance, information technology and transport.
Cameroon’s participation is limited mainly to activities at the ends of the chains in lower
value sectors and little benefit for the rest of the economy. At the top of the chains, Cameroonian
businesses simply supply raw materials, or at best supply products that have been through
primary processing. At the bottom, Cameroonian firms act as intermediaries for foreign
industries, providing, for instance, packaging, assembly and distribution to the local market or
the Central African region.
In some industries, however, the government has adopted measures to encourage increased
local processing of raw materials. This timber industry has moved towards primary and secondary
processing. Moreover, strong demand from CAEMC and ECCAS countries and from Nigeria
– part of the Economic Community of West African States – is attracting more and more agroindustries (processing of palm oil, cocoa, etc.). Sluggish global demand for some raw materials
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has forced manufacturers to look towards domestic and sub-regional markets. These changes
should gradually lead to a shift away from commodity exports and towards the production of
finished goods. Capacity-building in ship repairs (shipyards) has therefore enabled Cameroon to
participate fully in global value chains in this sector, at least within the Gulf of Guinea region.
Sectors that have increased their participation in global value chains have contributed to
economic growth, created jobs, developed capacities and improved infrastructure. However,
Cameroon’s position in value chains (at the extremes of the chains) exposes it to fluctuations in
commodity prices and global economic cycles. The recent global financial crisis highlighted this
vulnerability, especially among export-oriented industries.
These industries have a large number of small operators that are often poorly equipped and
largely disorganised. Their integration into clusters will allow them to regroup and upgrade more
effectively. This has already occurred with the timber cluster set up in Yaoundé to bring together
artisans, structure timber supply, and equip the site with a kiln and other finishing machines.
Opportunities to strengthen Cameroon’s position in global value chains
Analysis of geographical distribution identifies opportunities for participation in global value
chains in the north of the country, thanks to the concentration of livestock farming and cotton
cultivation. SODECOTON produces cotton fibres and refined cottonseed oil. The enhancement
of livestock farming, meat products and leather is still held back by the sectors’ infrastructure
deficits. The southern part of the country enjoys a tropical climate, making it ideal for developing
agricultural industries (cocoa, palm oil, natural rubber, cassava, fruit and vegetables, etc.). On
the coast, the potential development of hydroelectricity and gas-based thermal electricity (with
large reserves) and access to the sea offer Cameroon opportunities to participate in global value
chains (ship repairs, shipping, light metals, etc.). Furthermore, Cameroon’s strategic position as a
country of transit towards several countries in the sub-region provides opportunities to develop
global value chains at the borders with neighbouring countries.
Obstacles to global value chains
Obstacles have to be overcome to improve Cameroon’s place in the world economy through
global value chains. These constraints are related to the poor support infrastructure: the collection
markets and wholesale markets, the packaging and transport infrastructure at ports and airports,
and standardisation infrastructure. Furthermore, the deficit in human-resource capacities, the
largely obsolete production equipment in certain sectors, and the difficulties people encounter
in obtaining finance limit the country’s participation in GVCs. The lack of infrastructure is
particularly a result of insufficient investment budgets and two decades of accumulated delays
during the period of structural adjustments since the mid-1980s.
Government policies to increase participation in global value chains
The government set up the Enterprises Upgrading Office and the CFCEs to tackle these
shortcomings. The Enterprises Upgrading Office aims to build the capacity of companies, while
the CFCE ensures the growth of clusters and sectors. In addition to these measures concerning the
structure of sectors and the capacity-building of businesses, the development of infrastructure
to reduce the costs of production is one of the key areas in which the government is working
to increase Cameroon’s participation in global value chains. More rational budget choices are
required. Fuel subsidies, for instance, are equivalent to 3.3% of GDP and represent 19.5% of current
expenditure.
Better budgeting would free up finance for infrastructure investment for internal resources,
which could be added to extra external resources that could be raised with a judicious debt policy.
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Notes
1. The Garoua Boulaï–Ngaoundere road connecting the south with the north.
2. The acquisition of six new locomotives and the rehabilitation of 175 km of track.
3. The main exports to CAEMC countries are food products, mineral water, meat, palm oil, iron
and steel, and fruit juices. The main imports are crude oils, cigarettes and liquefied butane.
Excluding crude oil, the Republic of Congo is Cameroon’s leading CAEMC partner, providing 41%
of trade with CAEMC countries, followed by Gabon (20%), Equatorial Guinea (16%), Chad (15%)
and the Central African Republic (8%).
4. The ministry’s seal is required to certify the transparency, compliance and legality of
procurements and any related payments. For major infrastructure projects, autonomous
commissions are set up, which include the ministry.
5. The Audit Bench prepares a report for the parliament on the enforcement of the finance laws
and a declaration certifying that the individual accounts of senior state accountants comply
with the general account of the finance administration. It examines the accounts of public
accountants and punishes mismanagement. The Audit Bench’s reports have sometimes
been acted upon, leading to the detention of senior officials, who have been prosecuted for
embezzlement.
6. In the area of biodiversity conservation, Cameroon has increased the size of its protected areas
from 7% of the country in 1996 to 15% as of 2013.
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