The economic context of Cameroon

Economic Indicators

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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. In 2020, the Covid-19 pandemic has pushed the economy into recession, but GDP growth rebounded to 3.6% in 2021, supported by the non-oil sector recovery and the general global economic recovery (IMF). According to IMF estimates, economic growth will continue to strengthen, with growth rates reaching 4.6% in 2022 and 4.9% in 2023. 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. Greater electricity supply, rising liquefied natural gas production and activities related to the African Cup of Nations will support economic growth.

After slowing down in 2020 due to the Covid-19 pandemic and security tensions in the region, Cameroon’s economy rebounded in 2021. 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. The authorities aim to avoid premature fiscal tightening and to gradually reduce the budget deficit to 3.1% in 2021, 1.9% in 2022 and then to below 1% in 2024 (IMF). Public debt, which increased to an estimated 45.8% GDP in 2020 and 2021, is expected to reduce to 43.8% GDP in 2022 and 41.8% GDP in 2023 (IMF). Inflation remained moderate at 2.3% in 2021, and is forecast to further decrease to 2.1% in 2022 and 2% in 2023 (IMF). 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).

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 from 24.5% in 2019 to an estimated 25.3% in 2021 (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 500,000 Cameroonians have been internally displaced since December 2017, and the country also hosts more than 440,000 refugees, mainly from the Central African Republic and Nigeria (World Bank, UNHCR). In 2020, the unemployment rate in the country stood at 3.6% (World Bank, ILO estimate)

Main Sectors of Industry

Due to its abundant natural resources, Cameroon stands as a major global producer of goods like cocoa, coffee, bananas, palm products, tobacco, rubber, cotton, maize, and cassava. The primary sector contributes to 17.4% of the GDP and employs almost 43% of the active population (World Bank). Before the development of oil trade (which alone represents over 8% of the GDP), agriculture was the country's main economic driver. Coffee and cocoa production, which is concentrated in the English-speaking regions, suffers from political instability in the area. Fishing and forestry are two of the country's additional significant activities. The country has high-value varieties of timber. In addition to oil and gas, Cameroon's resources include bauxite ore and iron. LNG production is expected to offset the gradual decline in crude oil production.

The secondary sector accounts for 23.3% of the GDP and employs 14% of the workforce. The country's main industries are food processing, sawmill, the manufacture of light consumer goods and textiles.

The tertiary sector accounts for 52% of the GDP and employs 42% of the active population. It benefits from the economic activity created around large-scale energy projects. The services sector is booming, driven by the sectors of telecommunications, air traffic and transport.

 

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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Indicator of Economic Freedom

Definition

Definition:

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.}}

Score:

53,3666666666667/100

World Rank:

144

Regional Rank:

32

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

 

Sources of General Economic Information

Ministries

Website of the Government of Cameroon

Statistical Office

National Institute of Statistics

Central Bank

Bank of the States of Central Africa

Stock Exchange

Central African Stock Exchange (BVMAC)

Economic Portals

Portal of the Cameroonian government on the economy
Portal on the economy of Cameroon
Information portal on Cameroon that has an excellent section on the economy