For growth to accelerate and become more inclusive, the government’s role CAMEROON Key conditions and needs to shift from being the main driver of economic activity to: (i) providing a challenges stable and fair regulatory environment and adequate infrastructure services; and Table 1 2021 Cameroon is the largest economy in the (iii) effectively delivering basic services to Population, million 27.2 Economic and Monetary Community of the population. GDP, current US$ billion 42.0 Central Africa (CEMAC), accounting for GDP per capita, current US$ 1543.7 over 40 percent of the region’s GDP a 26.0 International poverty rate ($1.9) and over 60 percent of regional foreign Lower middle-income poverty rate ($3.2) a 47.0 exchange reserves. The oil sector ac- Recent developments a 71.0 counts for 4 percent of the country’s Upper middle-income poverty rate ($5.5) Gini index a 46.6 GDP and 13.8 percent of its fiscal rev- Cameroon’s economic activity gradually School enrollment, primary (% gross) b 105.7 enues in 2021, highlighting Cameroon’s recovered in 2021 on the back of dynamic b 59.3 exposure to commodities and oil price secondary and tertiary sectors and Life expectancy at birth, years shocks. The current development model stronger external demand. Real GDP Total GHG Emissions (mtCO2e) 126.1 has run out of steam, as governance in- growth reached 3.5 percent in 2021, or 0.8 Source: WDI, Macro Poverty Outlook, and official data. dicators have deteriorated, human capi- percent in per capita terms. Higher oil pro- a/ Most recent value (2014), 2011 PPPs. b/ Most recent WDI value (2019). tal remains weak, and the business en- duction and prices and a rebound in ser- vironment is unfavorable. High market vices and external demand have supported concentration and state ownership of private consumption and investment. In- The completion of infrastructure projects commercial enterprises also limit do- creased shipping costs have put pressure mestic competition. The country has be- on prices in recent months, limiting the is expected to boost GDP growth in 2022. come more fragile. Conflicts affecting 6 availability of food staples in local mar- Driven by higher oil prices, the fiscal out of 10 of Cameroon’s regions have kets. Meanwhile, higher exports and oil deficit is projected to narrow in the medi- displaced people, increased violence, prices have improved Cameroon’s current um term, while the current account and led to a collapse in social services. account balance. Following a sharp decline The current growth level is too low to in 2020, imports moderately increased in deficit would decline gradually. The im- achieve a substantial poverty reduction. 2021, driven by large infrastructure pro- pact of the shipping crisis, along with the Although the poverty rate has declined jects, including initiatives related to the Ukraine-Russia war, could put further over the last decade, the absolute num- Africa Cup of Nations. Despite the im- pressure on inflation and incomes. The ber of poor people has increased con- proving economic context, vaccination outlook remains favorable, but is subject sistently due to population growth. The against COVID-19 remains low at 2.9 per- COVID-19 crisis has reversed progress cent of the total population, as of end- to several risks, hence the need to acceler- in poverty reduction, with the poverty March 2022. ate structural reforms. rate estimated to have increased in 2020. The fiscal deficit remained unchanged to The debt stock has been rising since 3.2 percent of GDP in 2021, owing to 2016, calling for improved debt manage- improved revenue collection and expen- ment to attract new investment. diture controls. Oil revenues reached 1.9 FIGURE 1 Cameroon / Real GDP growth and contributions FIGURE 2 Cameroon / Actual and projected poverty rates to real GDP growth and real GDP per capita Percent, percentage points Poverty rate (%) Real GDP per capita (constant LCU) 10 90 800000 8 80 700000 6 70 600000 4 60 500000 2 50 400000 0 40 -2 300000 30 -4 20 200000 -6 10 100000 2000 2003 2006 2009 2012 2015 2018 2021 2024 0 0 Gov. cons. Exports GFCF 2007 2009 2011 2013 2015 2017 2019 2021 2023 Inventories Private cons. Imports International poverty rate Lower middle-income pov. rate Statistical disc. GDP Upper middle-income pov. rate Real GDP pc Source: World Bank. Source: World Bank. Notes: see Table 2. MPO 15 Apr 22 percent of GDP in the same year due 3.2 percent of GDP in 2021 to 2.8 percent to higher oil prices. Tax revenues also in 2024. Non-oil revenues are expected to increased in 2021 due to better-than-ex- Outlook increase, due to simplified administrative pected collection of the value-added tax measures on property income and the new (VAT), corporate income tax, and excises. The economic recovery is expected to con- tax on mobile money transfers. Spending Similarly, efforts to improve the tax ad- solidate, with growth projected to reach reprioritization, including the gradual re- ministration, including digitization and 4.0 percent in 2022 and 4.4 percent in 2023. duction of subsidies to SOEs, would con- tax audits, also contributed to the revenue Economic growth would benefit from sus- tain expenditure in the medium term. Still, increase. On the expenditures side, even tained higher oil prices as the pandemic Cameroon remains at high risk of external though higher oil prices led to higher fuel comes progressively to an end. Unless the and overall debt distress, although debt is subsidies, the authorities cut current ex- government introduces price subsidies, the assessed as sustainable, according to the penditures on goods and services, allow- Ukraine-Russia war will affect the outlook, latest Debt Sustainability Analysis con- ing for some expansion of capital out- have an impact on poverty reduction, and ducted in February 2022. lays. Capital spending increased from 4.6 weigh on inflation. Key transmission chan- The outlook remains subject to risks asso- percent of GDP in 2020 to 5.4 percent nels are: (i) increased wheat prices, trans- ciated with: (i) a further tightening of mon- of GDP in 2021, while the public debt lating into higher prices for bread; (ii) etary policy; (ii) a protracted Ukraine-Rus- stock increased from 44.9 percent of GDP higher oil and energy prices, leading to sia war; and (iii) a persistent security cri- in end-2020 to 47.2 percent of GDP by higher production costs; and (iii) higher sis in the North-West, South-West, and Far end-2021. fertilizer prices, affecting the majority of North regions. Should such risks material- The Bank of Central African States tight- people working in agriculture. Efforts to ize, real GDP would grow more modestly ened its monetary policy in late 2021 over reduce poverty will also be hampered by than under the baseline scenario, affecting concerns about the evolution of foreign ex- the ongoing security crisis in parts of the fiscal and external accounts. A sharp rise change reserves. Despite higher oil prices country. Nevertheless, the poverty rate is in global risk premia following a monetary and the International Monetary Fund Spe- expected to remain constant at 23 percent policy tightening in advanced economies cial Drawing Rights allocation (equivalent in 2022. would affect the outlook and debt sustain- to US$1.4 billion), the country’s foreign ex- The current account balance should con- ability. The increase in international oil change reserves represented just above 3 tinue to improve, owing to robust oil and and food prices would add on existing in- months’ worth of imports of goods and non-oil commodity exports. The country’s flationary and fiscal pressures. services by end 2021 (same as by end 2020). fiscal deficit is projected to narrow from TABLE 2 Cameroon / Macro poverty outlook indicators (annual percent change unless indicated otherwise) 2019 2020 2021e 2022f 2023f 2024f Real GDP growth, at constant market prices 3.7 0.5 3.5 4.0 4.3 4.4 Private Consumption 4.5 3.3 3.8 4.0 5.4 4.6 Government Consumption 1.8 2.3 3.4 9.1 -5.2 -7.9 Gross Fixed Capital Investment 8.1 2.4 8.2 8.9 8.5 8.9 Exports, Goods and Services 5.1 -21.0 3.2 3.9 11.5 8.8 Imports, Goods and Services 10.5 -5.4 9.0 11.5 11.0 7.0 Real GDP growth, at constant factor prices 3.6 0.5 3.5 4.0 4.3 4.4 Agriculture 2.8 0.1 4.1 4.3 5.6 5.6 Industry 3.6 1.3 4.1 4.4 4.5 4.5 Services 3.9 0.3 3.1 3.7 3.8 4.0 Inflation (Consumer Price Index) 2.5 2.5 2.5 3.0 2.5 2.0 Current Account Balance (% of GDP) -4.4 -3.7 -4.0 -3.9 -3.8 -3.7 Fiscal Balance (% of GDP) -3.3 -3.2 -3.2 -3.0 -2.9 -2.8 Debt (% of GDP) 43.0 45.8 47.1 45.1 42.3 39.8 Primary Balance (% of GDP) -2.4 -2.3 -2.1 -1.9 -2.0 -1.9 a,b International poverty rate ($1.9 in 2011 PPP) 23.2 23.9 23.6 23.1 22.6 22.0 a,b Lower middle-income poverty rate ($3.2 in 2011 PPP) 42.4 43.4 42.9 42.2 41.3 40.3 a,b Upper middle-income poverty rate ($5.5 in 2011 PPP) 66.4 67.5 67.0 66.2 65.3 64.2 GHG emissions growth (mtCO2e) 0.9 0.4 0.9 1.0 1.0 1.1 Energy related GHG emissions (% of total) 9.6 9.5 9.8 10.1 10.3 10.5 Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD. a/ Calculations based on 2007-ECAM-III, 2019-, and 2014-ECAM-IV.Actual data: 2014. Nowcast: 2015-2021. Forecasts are from 2022 to 2024. b/ Projection using point-to-point elasticity (2007-2019) with pass-through = 1 based on GDP per capita in constant LCU. MPO 16 Apr 22