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Cameroon Economic Outlook

Macroeconomic performance

The regional, economic, and financial environment has remained fragile and challenging, despite fiscal consolidation by Central African Economic and Monetary Community (CEMAC) countries, rising oil prices, and restrictive monetary policy in CEMAC, which led to improved economic performance in 2018. Real GDP growth reached an estimated 3.8% in 2018, up from 3.5% in 2017. Domestic demand (consumption and investment) was the mainstay of economic growth. The fiscal deficit continued to fall to an estimated 2.6% of GDP in 2018 from 4.9% in 2017 and 6.2% in 2016.

Financing through commercial and public loans of infrastructure projects carried out as part of the country’s emergence policy led to an accumulated government debt of 34% of GDP (38% including large state enterprises) in 2018, compared with 12% of GDP in 2007. As in 2017, common monetary policy remained restrictive in 2018. Inflation was an estimated 1.1% in 2018, below the 3% community requirement. The current account balance remained in deficit, at an estimated 3.2% in 2018, up from 2.7% in 2017.

Tailwinds and headwinds

Real GDP is projected to grow by 4.4% in 2019 and 4.7% in 2020, following energy and transport production infrastructure startup, as well as rising world oil prices. The current account deficit is projected to level off at 3.1% of GDP in 2019 and 2020. Inflation is projected to remain below the 3% community requirement.

But the growth prospects have some uncertainties. Expected budget revenue in 2019 depends heavily on fluctuating world oil prices. Cameroon will also have to continue efforts to restore the fiscal balance, rebuild foreign exchange reserves, and strengthen regional currency parity.

Deterioration in the security situation in the North- West and South-West regions, in the throes of a persistent sociopolitical crisis, could also darken prospects for economic growth because these regions house important areas of agricultural production and the country’s largest agribusiness. If the crisis continues, it could increase expenditures for defense and security and affect the 2019 budget.

Although Cameroon’s economy remains the most resilient in Central Africa in terms of diversification, the weakness of its growth base and its great exposure to fluctuations in world prices for raw materials are significant factors of economic vulnerability.

Implementing value chain projects in the agro-sylvopastoral and fisheries sectors could help strengthen the country’s economic resilience. Strengthening resilience also requires improving the economy’s competitiveness, especially with greater support for facilitating transport, developing trade at the regional level, taking account of the country’s geographic location, and providing support for private sector development.

To reach economic emergence by 2035, and based on the Strategic Document for Growth and Employment (2010–2020), a 10-year strategy for the Vision 2035, the government has implemented a substantial investment program to accelerate growth, create decent jobs, and reduce poverty. The program involves implementing structuring projects in key sectors of the economy. For example, the government has already implemented a variety of power generating facilities to reduce the lack of infrastructure and increase installed capacity, which is close to 1,300 MW, and has turned the energy sector into a key export sector.