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Cameroon Economic Outlook

Cameroon Economic Outlook

Macroeconomic performance and outlook

Despite exogenous shocks and security challenges, Cameroon’s economy grew an estimated 4.1% in 2019 thanks to a dynamic tertiary sector and growth in consumption and investment.

However, economic growth has not been inclusive enough to develop human capital. Cameroon continues to underachieve in human development, ranked 151 in the world (21 in Africa) on the 2018 Human Development Index. The poverty rate has inched lower, from 39.9% in 2007 to 37.5% in 2014. However, the current trend will not achieve two goals in the Growth and Jobs Strategy Paper: workforce underemployment falling from 76% to 50%, and a poverty rate at 28.7% in 2020.

The inflation rate rose from 1.1% in 2018 to 2.4% in 2019, but remained below the CEMAC 3% limit. The fiscal deficit has been declining (3.8% of GDP in 2017, 2.5% in 2018, and 2.3% in 2019) thanks to fiscal consolidation in the context of the three-year plan for 2017–19. The current account deficit is estimated at the same level in 2019 as in 2018 (3.7% of GDP) before declining to 2.6% in 2020 (its 2017 level). Cameroon continues to have a high risk of debt distress, according to the IMF’s assessment in November 2018 (debt was almost 39% of GDP in 2018, compared with 12% in 2007).

Tailwinds and headwinds

Growth is projected to remain around 4% in 2020 before slowing to 3.4% in 2021. The IMF program will end in June 2020, and its effects are likely to continue into 2020 and 2021. Cameroon plays a central role in the Economic and Monetary Community of Central Africa (CEMAC), holding nearly 40% of its money supply. Over 2014–17, its share of total intracommunity trade amounted to 24.7%, aided by the relative diversification of its economy and the existence of road corridors with all CEMAC countries as well as Nigeria. The country’s ratification of the African Continental Free Trade Agreement in June 2019 continues in this vein. The merger in 2020 of two stock exchanges (Cameroon and Gabon) is expected to lead to further financial integration in the CEMAC area. The implementation of significant value chain projects in the agroforestry, pastoral, and fisheries sectors should help to strengthen the economy.

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The persistence of security problems, specifically Boko Haram, in the far north and sociopolitical tensions in the northwest and southwest are affecting the economy, with transport, hospitality, telecommunications, and commercial agriculture recording significant material and financial losses. In September 2019, the government initiated a national dialogue to address the challenges.

The security expenses generated by the various security crises and the shutdown of SONARA (the national oil refinery) in June 2019 following a fire weakened the country’s fiscal and current account positions. Constraints remain in meeting needs in education, healthcare, poverty, and employment, and hold the country back from capitalizing on the potential of the demographic dividend. Imparting high skills and training sufficiently skilled labor feature among the country’s biggest challenges. Implementing the Growth and Jobs Strategy Paper 2010–19 has led to the creation of infrastructure, financed largely by public sector borrowing. However, growth remained below the goal of an average 5.5% over the period.

Source: African Economic Outlook (AEO) 2020

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Shurilifestyle
Hello everyone! I am Shuri Fuh Maouline, founder of shurilifestyle, a Cameroonian based in Douala, Littoral. I blog about routines, motherhood, lifestyle, travel, relationship, food, and drinks. I enjoy sharing my little experiences and ideas and I hope that through this medium I will be able to give helpful tips and answer some of your questions. Feel free to correct me, comment and ask your questions via the comments section or by email via info@shurilifestyle.com
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