| Imagery Source: Pix4Free |
| Information Source: African Development Bank |
| Recent macroeconomic and financial developments |
| The economic growth rate rose from 3.6% in 2022 to 3.8% in 2023, thanks to the good performance of the forestry and logging sector and the dynamism of the services sector. On the demand side, growth was driven mainly by private investment. Inflation, which stood at 6.3% in 2022, rose to 7.4% in 2023, driven by food prices, which rose 11.1%. |
| The budget deficit improved from 1.1% of GDP in 2022 to 0.9% in 2023 due to greater rationalisation of public spending, policies aimed at broadening the tax base (from the current tax burden of 12.6% of GDP, and rising oil prices. Public debt fell from 45.3% of GDP in 2022 to 41.8% in 2023, though the International Monetary Fund still classifies the country as being at high risk of debt distress. The current account deficit narrowed from 3.4% of GDP in 2022 to 2.7% in 2023 due to improved primary income balances and increased gas production. The quality of the banking system’s portfolio deteriorated slightly, with the gross delinquency ratio rising from 13% to 15.4% between end-2022 and mid-2023. But the equity ratio rose from 15% to 16.3% over the same period. |
| According to the World Bank, among the economically active population, the $2.15 a day poverty rate was an estimated 23% in 2023, and the unemployment rate was an estimated 3.7%, due to weak economic growth. |
| Outlook and risks |
| GDP growth is projected to reach 4.1% in 2024 and 4.4% in 2025, thanks to a gradual increase in domestic gas production and higher world commodity prices. Inflation is projected to fall to 6.3% in 2024 and 4.3% in 2025 due to the continued tightening of monetary policy by the Bank of Central African States. The budget deficit is projected to further improve to 0.5% in 2024 and 0.2% in 2025, thanks to continued tax reforms and rationalisation of public spending. The current account deficit is also projected to improve to 1.9% in 2024 and 1.6% in 2025 as gas exports continue to increase. Risks of this growth outlook are linked to Russia’s invasion of Ukraine and the Israel–Hamas war, with negative consequences for product supply chains, as well as a possible resurgence of social tensions within the country. |
| Reform of the global financial architecture |
| Structural transformation has been slow. Between 2000 and 2023, there was a net increase in the contribution of the services sector to GDP, from 44.3% to 51.9%, at the expense of the industrial sector, whose share declined from 34.1% of GDP to 25%. The structure of employment changed considerably between 1990 and 2019, with a net decrease in the share of employment in the agricultural sector from 70% in 1990 to 43% in 2019, while the share in services rose from 20% to 42%. The share of employment in industry remained largely stable over the period. |
| To ensure structural transformation, the country must step up efforts to mobilise not only domestic resources but also the concessional external resources needed to finance energy and transport infrastructure projects at affordable rates. Reforming the global financial architecture to increase Africa’s decision-making power in the major international financial institutions is imperative. This will enable Africa’s priorities to be better taken into account, especially concerning access to stable, long-term resources. For Cameroon, a Congo Basin country rich in natural resources, such reform would enable better valorisation of its natural capital, revalue its national wealth, and provide access to additional financial resources, notably from a potential carbon market. |
| For the full document, click the link below |
| Cameroon: Economic Outlook and GDP |
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