|
Overview
Cameroon has a rich and diversified commodity-based economy. Agriculture was the sole engine of growth and foreign-exchange earnings until the late 1970s when oil became the primary engine of growth.
Food and export crops, livestock, fishing and forestry are the mainstay of the economy, accounting for about 29% of GDP, employing some 50% of the active population, and generating more than half of total export earnings. The petroleum and manufacturing sectors represent 20% of GDP. Of this the oil sector accounts for less than 5% of GDP but contributes 35% of government revenue and export receipts. Its contribution, however, is expected to diminish sharply in the next decade as most of the oilfields have started to mature. The secondary sector contributes 31% of GDP and employs 15% of the population.
Cameroon is the most important market in the Communauté économique et monétaire de l'Afrique centrale (CEMAC), accounting for nearly half of the GDP .
Agriculture, forestry & fishing
Agriculture is rich and varied, but largely unexploited. Nevertheless, with only 13 per cent of land in Cameroon classified as arable, food production has previously met virtually all local requirements. Most agricultural production is in the hands of smallholders, with the exception of rubber and palm, which are run under the plantation system.
Millet, sorghum, rice, yam, cassava and plantain are produced for both domestic consumption and for exports to countries within the central African region. There has been a recent decline in the production of domestic food crops; this is partly attributable to the increasing emphasis on cash crops since 1994 to compensate for the sharp decline in the manufacturing and services sectors.
The main cash crops, which provide about 40 per cent of Cameroon exports, are cocoa (Cameroon is the world's fifth-largest producer), coffee and cotton. In late 2001 the government announced an ambitious plan to revive the cocoa and coffee sectors, currently constrained by inadequate institutional capacity and poor and fluctuating world prices. The full benefits of the programme are not expected to be seen before 2010. Bananas, tea, rubber and palm oil are produced for export.
Livestock raising is an important sub-sector, benefiting from ideal terrain and low rates of disease among stocks.
Forestry
With forests and woodland making up nearly 78 per cent of the country's area, the forestry sector is the country’s second largest export earner after oil, generating around 20% of export revenue, and employing some 55,000 people. There is, however, a great untapped potential in the forestry sector - Cameroon could be one of the major exporters of timber and other wood products but is constrained by the lack of basic transport infrastructure, especially in the tropical rainforest region of the country. Recent reforms and the government’s ban on the export of all unprocessed timber have resulted in increased processed timber production and export, but a 30% decline in unprocessed timber. Cameroon was previously the largest producer of logs in Africa, almost 60 per cent of which were exported. Some 80% of forests have either been logged or allocated as logging concessions, mostly to French firms.
Fishing
Fishing is underdeveloped. Large stretches of farmland and fishing waters were abandoned after the eruption of Mount Cameroon in early 1999 sent poisonous gases and other emissions into lakes and streams in the vicinity. This appeared to have affected the production of basic food crops for local consumption and the government was forced to increase its food imports to US$173 mn.
Mining
Bauxite deposits have been identified but remain unexploited; there are also deposits of iron ore and potential reserves of gold, diamonds, uranium, rutile, industrial clays and low-grade nickel and cobalt. Tin is mined on a very small scale. Investment by large mining companies is needed to exploit underground riches. A new mining code is planned to encourage foreign investors.
Industry & manufacturing
This comprises the mining, construction and energy sectors. Mining and oil extraction are dominant, constituting about 46 per cent of total exports in 1999 making oil a principal source of the government's revenue. Offshore oil production (light crude) began on a commercial scale in 1977, peaked in 1985 and has since been falling. Cameroon generally follows OPEC pricing policy. Crude oil exports go mainly to France and the USA, but Cameroon has been a net importer of oil since 1995.
The manufacturing sector, which is centred on import substitution (radios, soap, tyres, footwear manufacture) and the processing of agricultural commodities (sugar refining, brewing, palm oil processing, cotton spinning, tobacco and wood-pulp production) and oil refining (petroleum) accounted for 10.6 per cent of GDP in 1998. Other heavy industries are aluminium smelting at Edea (using imported bauxite), steel processing and leather tanning.
The building of the 1,070 km Chad-Cameroon pipeline, which at its peak is expected to employ about 7,000 people, is expected to boost the construction industry, having already stimulated an increase of 1.1% real GDP growth in 2000-01. Construction of the pipeline, which will cost about US$2bn, had begun by the end of 2001.
Tourism
The once flourishing tourism sector, which has been depressed since the political violence of the early, and mid-1990's, has recently shown signs of improvement. A 17% increase in government expenditure has been made to boost the sector.
Government finance and fiscal policy
Despite being a resource-rich country, Cameroon has remained plagued with problems of a bloated civil service, an unfavourable investment environment, corruption and governmental mismanagement. Various programmes have been adopted since the 1990's to address these problems. Under an IMF supported medium term three-year Poverty Reduction and Growth Facility (PRGF) programme introduced in July 1997, structural reforms aimed at liberalising the economy and foreign trade, and stimulating private initiative were introduced, while government efforts centred on strengthening expenditure management and control, and improving transparency in government operations. A new three-year PRGF facility with the IMF worth US$134m was approved in December 2000 in recognition of sound macroeconomic management and market oriented reforms. By late 2001 significant progress had been in privatization. A focus on governance and privatization remain key policy trends, while the next phase of reforms are also aimed at improving social services and reducing poverty.
Foreign Aid and Donors
Cameroon is still beset with an unsustainably high level of foreign debt– an estimated US$10.9bn in 2000. However, in January 2001 the Paris Club creditors agreed to restructure Cameroon’s public external debt under the enhanced heavily indebted poor countries (HIPC) initiative bringing a reduction in total debt services from US$401m in 1999 to a projected US$242m in 2002.
Cameroon has become the leading beneficiary of project aid from the Agence française de dévelopment (AFD), reflecting the country's improvement in relations with the international donor community and relatively good economic performance.
Regional and International economic grouping/alliance:
|
|
|
|
Organization of African Unity (OAU)
|
|
|
|
Communauté économique et monétaire de l'Afrique centrale (CEMAC)
|
|
|
|
The Franc Zone
|
|
|
|
The Lomé Convention
|
|
|
|
