Cameroon: Economic and Political Overview
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With a strategic location that makes the country a natural gateway into the landlocked region of Central Africa (including Chad, Central African Republic and northern Congo), Cameroon is undoubtedly an influential country in the economic and monetary community of the region. After the Covid-19 pandemic-lead recession in 2020, GDP growth rebounded, supported by the non-oil sector recovery and the general global economic recovery and reached 3.8% in 2022 (IMF). Economic growth is expected to accelerate to 4.6% in 2023 and 4.7% in 2024, but spillovers from Russia’s war in Ukraine present major risks (IMF). This performance will be driven by public investments in projects such as the hydroelectric dam of Lom-Pangar and Nachtigal and the port of Kribi.
After slowing down in 2020 due to the Covid-19 pandemic and security tensions in the region, Cameroon’s economy rebounded in 2021 and continued to recover in 2022. Restrictive budget policy prior to the pandemic, a modest recovery plan, emergency fund from the IMF and debt payment suspension contributed to the stability of public finances. Aiming to avoid premature fiscal tightening, the authorities continued to gradually reduce the budget deficit, from -2.4% GDP in 2021 to -2% GDP in 2022 (IMF). It is expected to decrease below 1% GDP in 2023 (IMF). Public debt increased to an estimated 46.8% GDP in 2022, but it is expected to reduce to 43.7% GDP in 2023 and 40.5% GDP in 2024 (IMF). According to the IMF’s updated figures, inflation peaked to 6% in 2022 (from 2.3% in 2021), and should remain at that level in 2023. This surge in prices is driven by imported inflation linked to food (fertilisers, cereals, livestock inputs) and refined hydrocarbons costs, as well as domestic supply pressures (Coface, IMF). According to Coface, inflation is expected to return within reach of the 3% convergence target in the monetary zone by 2024. In the context of the IMF’s Extended Credit Facility and Extended Fund Facility arrangements, Cameroonese authorities are focused on strengthening budgetary discipline, addressing fiscal risks from state-owned enterprises, and accelerating the implementation of structural reforms (IMF). The government announced a reduction in fuel subsidies, in an effort to create fiscal space for productive investment and social spending. Challenges include spillovers from Russia’s war in Ukraine, including inflationary pressures, supply chain disruptions, food security, and a tightening of global financial conditions (IMF).
Despite the rather satisfying economic performances of the country, poverty affects nearly 40% of the population, around 8 million people. The crisis Covid-19 increased the extreme poverty rate, which represents around a quarter of the population (World Bank). Because the poverty reduction rate is lagging behind the population growth rate, the overall number of poor in Cameroon increased, and poverty is increasingly concentrated in the North and Far North (World Bank). The latter regions are also hit by the attacks of the Islamist terrorist group Boko Haram and a secessionist insurgency in the Anglophone regions. More than 1 million Cameroonians have been internally displaced since December 2017, and the country also hosts more than 470,000 refugees, mainly from the Central African Republic and Nigeria (World Bank, UNHCR). In 2021, the unemployment rate in the country stood at 3.9% (World Bank, ILO estimate).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 40.86 | 45.39 | 43.72 | 48.63 | 52.60 |
| GDP (Constant Prices, Annual % Change) | 0.5 | 3.6 | 3.4 | 4.3 | 4.4 |
| GDP per Capita (USD) | 1,539 | 1,667 | 1,566 | 1,700 | 1,794 |
| General Government Gross Debt (in % of GDP) | 44.9 | 46.8 | 46.4 | 42.8 | 40.4 |
| Inflation Rate (%) | 2.5 | 2.3 | 5.3 | 5.9 | 4.7 |
| Current Account (billions USD) | -1.52 | -1.80 | -0.69 | -1.38 | -1.56 |
| Current Account (in % of GDP) | -3.7 | -4.0 | -1.6 | -2.8 | -3.0 |
Source: IMF – World Economic Outlook Database, October 2021
Cameroon is open to international trade. It is a member of the Commonwealth, the CEMAC (Central African Economic and Monetary Community), the Economic Community of Central African States (ECCAS), and has signed the African Continental Free Trade Agreement. The ratio of trade to GDP is around 37% (World Bank, 2021).
Its main export commodities are fuel (oil, gas), minerals (coal, aluminium), wood, cocoa, cotton, and rubber. Cameroon mainly imports mineral fuels and oil, food (rice, wheat, fish, etc.), medicines, and manufactured products (vehicles, machinery, electrical and electronic equipment). Cameroon’s main export partners are China, Italy, the Netherlands, France, Spain and India. Its main import suppliers are China, France, Nigeria, the Netherlands, Thailand, the United States and Togo. Cameroon signed a free trade agreement with the European Union in August 2016. For some years now, Eastern Asian countries (especially China, Japan, India, and Thailand) have been reinforcing their trade ties with Cameroon.
Cameroon's trade balance is structurally negative. According to WTO data, in 2021 Cameroon recorded a trade deficit of USD 2 billion. The same source reported that the country imported USD 6.1 billion worth of goods against USD 4.1 billion for exports. Service exports generated 1.55 billion USD while service imports amounted to 2.24 billion USD in 2020 (WTO, latest available data). In 2021 imports of goods and services increased by 13.8% compared to 2020, much faster than exports (3.4%) (World Bank).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 43.5 | 14.4 | 42.1 |
| Value Added (in % of GDP) | 16.9 | 24.5 | 51.1 |
| Value Added (Annual % Change) | 2.9 | 3.2 | 4.3 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
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Source: Index of Economic Freedom, Heritage Foundation
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Latest Update: September 2023
