Cameroon Economy Facts
Cameroon has high debt problems despite having plenty of oil and other natural resources as well as profitable export agriculture. One obstacle to economic development is poorly developed infrastructure. Widespread corruption causes public funds to disappear in private pockets and the assets are unevenly distributed.
At independence in 1960, the future looked good. Productive agriculture has led to strong economic growth for a long time. It was mainly coffee and cocoa that went on export. In 1978, oil resources began to be recovered, which contributed to Cameroon becoming one of Africa’s most prosperous countries. In the mid-1980s, oil accounted for more than half of export earnings. The money was used, among other things, for a strong expansion of the public sector.
- Countryaah.com: Major imports by Cameroon, covering a full list of top products imported by the country and trade value for each product category.
But when world market prices for oil, cocoa and coffee began to fall in 1986, the Cameroonian economy was in crisis. Gradually, Cameroon was forced to take out large loans and the foreign debt shot up. To reduce the debt burden, the government implemented a austerity program in cooperation with the IMF in the late 1980s. This meant, among other things, that the number of public employees was reduced and that state-owned companies were sold out. Several similar IMF programs then followed for Cameroon.
An economic turning point came in 1994 when the value of Cameroon’s currency, the CFA franc, was written down by a sharp devaluation. Exports gained momentum and since the mid-1990s, growth has been relatively good.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including CMR which represents the country of Cameroon. Check findjobdescriptions to learn more about Cameroon.
From 1997 Cameroon managed to write off large parts of its foreign debt. In October 2000, the country qualified for the so-called HIPC initiative, which targets heavily indebted poor countries and is administered by the IMF and the World Bank. Large debt write-offs were made against the government’s efforts to reduce poverty, fight corruption, reform the justice system and increase respect for human rights.
During the first years after the turn of the millennium, the government managed to keep public costs down while striving to bring more tax money to the Treasury. Several state-owned companies were sold: telecommunications and electricity companies, the railways and partly state-owned industries that produce rubber and palm products. In 2006, Cameroon’s foreign debt had fallen to 25 percent of its value compared with 2003 when it was at its highest. The external debt remained at a moderate level until 2011, when it began to rise rapidly again, in order for 2017 to be almost up to the same level as in 2003.
Inflation is low since the government usually subsidizes basic food and fuel when world market prices skyrocket. Fuel subsidies in particular constitute a costly item in the state budget, which is often deficit. The holes in the budget are covered with aid and new loans. Important lenders and donors are the EU, China and the World Bank.
While debt problems have grown, growth has been fairly good. During the 2010s, new smaller oil sources were found, while agriculture was developed and the government made investments in infrastructure. However, dependence on the oil is a major concern in the long run. Production has decreased by more than half since the record year 1985. If no new large deposits are discovered, the oil is estimated to last only a few more years.
Procedure, oil accounts for just under half of export revenue, between 15 and 20 percent of Treasury revenue, and is the most important source of foreign currency.
Trying to broaden the economy
The ambition is to exploit other natural resources, such as natural gas, gemstones and minerals. But foreign companies’ willingness to invest is limited due to violent domestic conflicts and terrorist attacks (see Current policy). The separatist uprising that broke out in western Cameroon in the fall of 2017 has harmed the country’s economy through falling cocoa production. Other problems are electricity shortages, poor communications and an underdeveloped banking system that makes it difficult for the country’s own companies to lend to investments. Many planned projects have been dropped or hit by serious delays.
Oil exports allowed Cameroon to show a surplus in the trade balance for many years, ie exports were greater than imports. But since 2009, the relationship has been the opposite. Deficits also prevail in the current account, ie trade in goods plus trade in services. Here, the costs that Cameroon must pay abroad for services such as transport, insurance and other services are weighed in. The deficits are financed with aid, loans and money that Cameroonians abroad send home.
Besides crude oil, timber, cocoa, cotton and coffee are important export goods. Imports are dominated by food, machinery, electrical products and vehicles.
The country’s main single trading partner was France for a long time, but now China has taken over that role. China, not least, buys Cameroonian unprocessed timber. Much of the trade is done with countries in the EU, which according to a 2009 agreement import a certain part of the goods from Cameroon duty-free. The United States has withdrawn some trade benefits for Cameroon due to reports of human rights violations committed by the Cameroonian military in the conflict with the separatists.
The port of Douala is central to the country’s export-oriented economy. It is also important for trade in the coastal neighboring countries of Chad and the Central African Republic.
FACTS – FINANCE
GDP per person
US $ 1,527 (2018)
US $ 38,502 million (2018)
3.9 percent (2018)
Agriculture’s share of GDP
14.3 percent (2018)
Manufacturing industry’s share of GDP
15.3 percent (2018)
The service sector’s share of GDP
51.8 percent (2018)
2.1 percent (2019)
Government debt’s share of GDP
39.1 percent (2018)
US $ 10,396 million (2017)
Central African Franc
US $ 4,601 million (2017)
US $ 4,827 million (2017)
– US $ 949 million (2017)
Commodity trade’s share of GDP
25 percent (2018)
Main export goods
oil, oil products, timber, cocoa, cotton, coffee (2017)
Largest trading partner
China, France, Italy, Spain, India, Belgium (2017)