This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

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Effective leadership will be required for Cameroon to take full advantage of the opportunities presented by its natural strengths, particularly the potential of its agricultural sector.The country is a substantial exporter of bananas, coffee, cocoa, tea, rubber and cotton; and if similar efforts were put into the production of food crops for the domestic and regional markets, any significant dependence on imports of basic staples could probably be ended.


The country did not suffer as much as many others from the inflationary effects of soaring fuel and food prices in early 2008 and yet there were still political consequences in the form of violent protests against the surge in prices in February. These indicated ordinary citizens’ frustration with President Paul Biya’s failure to oversee a process of sustained growth and development, despite Cameroon’s natural resources. His government is popularly regarded with cynicism and the risk of further outbreaks of protest remains in 2009 and 2010. 


There is also wide public anger at the ubi
quity of corruption: police openly solicit bribes from car drivers even in city centres. And there are elements in the power structure who would rather brush the problem under the carpet than tackle it seriously. Journalists who reported on the ‘Albatross affair’ – alleged corruption concerning the purchase of a faulty presidential jet – found themselves the targets of sinister threats.


Almost two decades after the introduction of nominal multiparty democracy in 1990, the political arena is still dominated by Biya and his Rassemblement Démocratique du Peuple Camerounais. The opposition is weak and divided; it proved unable to coalesce around a credible single challenger to Biya in the 2004 elections. The legislative elections held in June 2007 also saw the ruling party maintain its position, suggesting that it will continue to monopolise the foreseeable future.


Biya is now serving his fifth presidential term, which will end in 2011. In April 2008, the constitution was amended to scrap term limits and allow him to stay in power beyond even then. The package passed by the National Assembly also assures an outgoing head of state of immunity from prosecution, so that Biya could never be called to account for any abuses that occurred on his watch. Political opponents and civil society groups complained that democracy had suffered a major setback but they proved unable to mobilise mass popular protest on a scale sufficient to block the amendments.


Despite the underlying tensions, Cameroon has maintained a level of basic stability. The main exception to this picture has been in the Bakassi peninsula, recently returned to Cameroonian rule by Nigeria, and where about 50 people were killed in violent incidents in 2008, mainly in attacks on Cameroonian soldiers. On 18 October, the security forces beat back an attack by pirates in waters off the peninsula bordering Nigeria. An armed group that claims to be fighting for compensation for those Nigerian settlers of Bakassi who chose to leave when it was handed back to Cameroon said its fighters were involved in a clash near Jabane. Calling itself the Niger Delta Defence and Security Council (NDDSC), the group claimed responsibility for previous attacks on Cameroonian soldiers.


The NDDSC issued dire threats if Cameroon did not release two of its fighters captured in July and pay compensation to Nigerians who left the territory following the handover on 14 August. Around 90% of the population in Bakassi are Nigerians, mainly fishermen and their families. Bakassi leaders and Nigerian lawmakers say they do not want to become Cameroonians. If the situation can be stabilised, Cameroon will be able to step up the process of oil exploration in a zone that is regarded as highly prospective. This would help to reinforce an oil sector that has long been in gradual decline, despite occasional moderate new discoveries.


Cameroon’s real economic strength is the diversity of its economic base. Although oil is the biggest export earner, timber, rubber and a range of export food crops also make important contributions to the balance of payments. They outweigh the importance of hydrocarbons in terms of the contribution they make to employment and livelihoods.


Despite weaknesses, the economy continues to progress. Real GDP growth for 2008 has been estimated at 3.8% and there is a projection for 4.6% in 2009. The average inflation rate in 2008 has been estimated as 4.1% with a projection of 2.1% in 2009. The IMF has continued to provide financial and policy support, although it had to be persuaded to grant waivers on slippages in the fiscal performance and its recourse to domestic borrowing. Prime Minister Ephraïm Inoni has pressed forward with a major programme of structural economic change and has continued with the privatisation of numerous companies. Those already privatised include the Cameroon Development Corporation, Sodecoton, Camtel, Sonel and Snec. The IMF is pushing for greater efforts in raising non-oil revenue, in reducing subsidies to public enterprises and in improving the business environment.


In the longer term, this liberalisation process may help to bolster efficiency and attract new investment, but the experience of AES Sonel, the national power company sold to US investors, shows that privatisation does not automatically bring a rapid solution to historic problems of commercial viability and under-investment. The construction of a new thermal power station at Limbe has eased supply constraints, but may not provide a full long-term solution. At the same time, the experience of privatisation has proved painful for many of those who worked at the companies concerned. 
Some sectors still face serious challenges. The partial privatisation of the state-owned cotton company Sodecoton – sold to two French companies – may boost output but world market conditions for this crop remain tough, particularly for producers who are in the euro-backed CFA franc zone and have problems coping with low global prices caused in part by US farm subsidies.


Timber output has been curbed under a government strategy to bring it back to levels that are environmentally sustainable. In order to preserve the sector’s long-term prospects, it is vital to limit production now; but that is not easy, given the powerful vested interests at play.
Prospects for economic diversification have been boosted by a rise in aluminium production but Cameroon’s manufacturing is challenged by low-cost producers in Asia. Chinese traders are now increasingly active as local competitors within the country. 

Submitting to the IMF’s medicine

Cameroon cannot afford to see a breakdown in its relationship with the IMF. Given the country’s patchy record of financial governance, it needs to maintain a good working partnership to protect its financial credibility.


An IMF Poverty Reduction and Growth Facility ending in January 2009 has provided the framework for macroeconomic and fiscal policy. Although it provided extra support to help cope with the increased cost of food, its policy recommendations have not been comfortable. The Fund has argued that fuel should be priced at world market levels, although this will hit the poor hard. Whatever its long-term benefits in terms of economic efficiency and environmentally rational use of resources, the practical impact of such an approach is painful in social terms and therefore adds to political pressures too.


The IMF has helped to retain investor confidence, a factor becoming increasingly important as recently privatised companies seek financing for infrastructure improvements and new projects. Maintaining electricity output is essential, not least because of continuing demand from the country’s aluminium smelter in Edea.