- Basic data
- Public finances and the state budget
- Banking system
- Tax System
The potential of the Cameroonian economy remains untapped. The country is rich in a number of minerals, but their resources are still waiting to be exploited (the mining industry is still underdeveloped). In January 2010, the Cameroon government adopted a long-term plan to strengthen economic growth, employment and poverty reduction (Document de stratégie pour la croissance et l’emploi). Cameroon also has an ambitious plan to become a so-called new economy with a higher middle income by 2035 (Vision Cameroun 2035). It wants to achieve this by strengthening investments in agriculture and infrastructure, improved availability of credit for entrepreneurs, investments in education and healthcare, and especially the influx of foreign investments in the extraction of raw materials. However, the plans will run into long-standing and difficult-to-remove evils: subsidies for certain commodities for domestic consumers, bureaucracy, corruption, particular interests of individuals, insufficient infrastructure, poor access to business loans, etc. The pursuit of fiscal consolidation will also be weakened in 2020-2021 due to the impact of the global oil price and the pandemic. From an estimated 4.3% of GDP in 2019, the fiscal deficit will increase to 8.6% of GDP in 2020 and can be predicted to decrease to a stable 3.4% of GDP by 2024, real GDP will decrease by 3% in 2020 for the same reasons. As a result of the increase in natural gas production in 2021-24, an annual average of 4.1% can be expected. GDP should grow at a rate of 4%, inflation should average around 2.9% per year in 2020-2024. Check ebizdir for economical facts of Cameroon.
The share of Cameroonian industry in the creation of GDP amounts to approximately 24%. The strongest branch of industry is the mining industry. 2020 was also expected to support growth in liquefied natural gas (LNG) production at the new terminal at the port of Kribi, which should boost productivity across the economy. In 2022-24, the manufacturing and agricultural sectors (each accounting for about 15% of GDP) will benefit from improved electricity supply. Agriculture accounts for approximately 22% of GDP. The main agricultural crops are cassava, yam, bananas, maize, sweet potatoes, sorghum, groundnuts and cocoa beans. Technical crops include rubber trees, oil palms and cotton.
Cameroon is the world’s fifth largest exporter of cocoa. Timber is Cameroon’s second most important source of foreign exchange. Forests cover 40% of the country’s surface, 17 miles ha are mineable. Logging contributes approx. 6% to GDP and approx. 11% to foreign exchange earnings. The trade and services sector is developing and today it already creates about 48% of GDP. The partial liberalization of telecommunications and the banking sector is thus bearing fruit. Compared to other countries in the region, tourism is far more developed, which is becoming an important service sector, especially in the coastal zone in the southwest of the country (the coast is 400 km long). Ecotourism and hunting tourism are relatively well developed.
|GDP growth (%)||3.7||-2.9||3.1||3.4||4.4|
|Export of goods (billion USD)||4.1||2.9||4.6||4.9||5|
|Import of goods (billion USD)||6.3||6||6.3||6.5||6.6|
|Trade Balance (Billion USD)||-0.7||-0.7||-0.6||-0.5||-0.5|
|Industrial production (% change)||ON||ON||ON||ON||ON|
|OECD export risk||06.VII||06.VII||06.VII||ON||ON|
Source: EIU, OECD, IMD
Public finance and state budget
|State budget balance (% of GDP)||-4.2|
|Public debt (% of GDP)||46.7|
|Current account balance (billion USD)||-1.4|
|F.O||11 – 38.5%|
The effort for fiscal consolidation was also weakened in 2021 as a result of the impact of the global oil price and the pandemic. Real GDP growth in 2021 reached 2.9%, for 2022 its further growth to 3.5% is predicted. As a result of the increase in natural gas production in 2021-2024, an annual average of 4.1% can be expected. Inflation rose to 2.2% in 2021 and unfortunately we expect it to rise further next year. The country’s debt has increased (in regional currency) from billion FCFA in 2016 to 10.3 billion FCFA in 2021. However, the country’s total debt is still only at 42.5% of GDP.
Economic policy should continue to be guided by the “Document de stratégie pur la croissanceet et l’emploi” and the Vision Cameroun 2035 plan. The main objectives are the acceleration of economic growth, the creation of job opportunities and the reduction of poverty. To achieve these goals, the government plans to increase infrastructure investment, improve private sector access to finance, and increase spending on health and education. With an influx of investment (mainly from the PRC) in infrastructure development, higher production to offset the lower oil price to some extent, and rapid development of services, the outlook for 2018 and the next few years is relatively good. GDP should grow at a rate of 4%, inflation should be in the range of 2-2.2%. State budgets will remain in deficit and will be financed by foreign loans, thus the country will go into debt again.
Cameroon is a member of the CEMAC currency zone – monetary policy is determined by the central bank of Central African countries, Banque des Etats de l’Afrique Centrale (BEAC), based in Yaoundé (www.beac.int). It supervises the activities of banks in the other five member countries of the Central African Integration Group (Chad, Congo, Gabon, Cameroon and the Central African Republic). The BEAC Central Bank issues currency and oversees liquidity in the Central African Currency Zone through rediscount rates and control of members’ money markets. In its monetary policy, it basically copies the decision of the European Central Bank. Furthermore, in 1993, the BEAC member states created a transnational banking supervisory institution – COBAC (Commission Bancaire de l’Afrique Centrale), which has specific powers to regulate the activities and discipline of all banking institutions of the CEMAC integration group.
There are 16 authorized private commercial banks in Cameroon. Licenses are issued by the Central African Banking Commission (COBAC). All authorized banks can be recommended for cooperation with Czech exporters.
- Access Bank Cameroon
- BGFI Bank Cameroon
- SCB Cameroun
- CCA Bank
- Commercial Bank of Cameroon
- Ecobank Cameroon – Acquired Oceanic Bank Cameroon
Banks offer a sufficient range of banking products (letters of credit, commercial loans, various bills of exchange (drafts), etc.) and accept more and more incentives for providing loans for medium-term investments by private entities. However, modern banking products (electronic banking) are not yet widespread (especially in big cities). The banking sector, on the other hand, suffers from strict regulatory measures, low volume of financial resources allocated for loans and low quality of services. No administrative authorization is required for transfers up to approximately USD 215,000.
Cameroon’s tax system has adapted to the uniform system within the CEMAC countries. The last tax reform was implemented in Cameroon in 1998. Available sources indicate that Cameroon’s tax and regulatory system is far from perfect, but it certainly does not discriminate against foreign entities (rather, it discriminates against the entire formal sector).
Cameroon’s tax system consists of the following basic direct and indirect taxes and employee social insurance:
- Personal Income Tax – is progressive according to income 11-38.5%,
- Corporate tax – 2.2% of turnover or 33% of profit
- Value Added Tax (VAT) – 19.25%,
- Consumption tax of 25% on luxury goods, reduced consumption tax of 12.5% on cars over 2000 cm3 and soft drinks.
Business is burdened by a number of other payments and levies (real estate tax (0.1% of the value), local tax (10%), construction tax, rent tax, real estate transfer tax (15%), etc.). Capital gains are taxed at a flat rate of 16.5%.
The company also pays: • Social insurance (Social Security Fund) – 11.2% of the salary, plus accident insurance in the amount of 1.75 – 5% • pension contribution – 7% • child benefits – 7% • contributions to the state fund employment – 2.5%
According to the new investment law of 2013, tax and customs benefits can be obtained by companies or individuals who establish a new, extend or renew the activity of an existing business or change the activity of a business in Cameroon for a period of 5 years.