With a population of more than 25 million people in 2018, Cameroon is a country with low, middle income. And shares boundaries with the Central African Republic, Gabon, Chad, and Nigeria. Located along the Atlantic Ocean, Two of its border regions shared with Nigeria, i.e., Northwest and Southwest Nigeria, are Anglophone (English-speaking), while the rest of the country is Francophone(French-speaking). The country is endowed with vital natural resources such as precious metals and other minerals, oil and natural gas, agricultural resources such as cocoa, coffee, cotton, cassava, banana, and maize. With a strategic location, Cameroon is an essential gateway into the region of Central Africa, which includes Northern Congo, Central African Republic, and Chad, which are landlocked. The country is, without a doubt, an influential country in the financial and economic region of Central Africa.

Despite the unresolved political upheaval and security difficulties facing the country, The economy of Cameroon had a 4.1% growth rate in 2019 as a result of growth in consumption, a dynamic tertiary sector, and growth in investment.

Economic Overview

Cameroon is the economic powerhouse of the Central African Economic and Monetary Community, also known by its French abbreviation CEMAC. The region is currently experiencing an economic crisis that came about as a result of the fall in the price of oil. Together with the rest of its CEMAC member states, Cameroon consequently had to make provision for economic efforts to adjust to the TOT (terms of trade) shock and rebuild the general stability and confidence in the common currency of the region.

In Cameroon this year, the growth is expected to arrive at 4.3%. The bounce back is driven by three main factors, such as an increase in the production of natural gas, with the new LNG (liquified natural gas) offshore terminal being available online, persistent speed in the construction, housing, industry, and services sectors.

In April 2017, the Country Economic Memorandum of the World Bank stated that Cameroon become a high middle-income country by 2035, and the government has to liberate the potential of the private sector, which is bombarded with a lot of unnecessary taxes stifling growth and increasing the country’s productivity.

For this to happen, the country’s real gross domestic product has to increase by 8% or a per capita of 5.7% till 2035. This will need Cameroon’s investment share of the GDP to rise from about 20% in 2015 to 30% in 2035, and efficiency development to reach 2% over a similar period from its normal zero development rate over the previous ten years. These difficulties, however overwhelming, can be met. The review of public expenditure issued by the World Bank in February 2018 proposes five different ways to accomplish these objectives. 

Although the economic growth of Cameroon has not greatly included human capital development, the country continues to lack in the area of human progress. Cameroon ranked 151 in 2018 on the Human Development Index and ranked 21 in Africa. From 2007 to 2014, the poverty rate of the country has slightly reduced from 39.9% to 37.5%. Nevertheless, the two main goals that will not be achieved by this trend in the Growth and Jobs Strategy Paper are the 2020 poverty rate of 28.7% and the unemployment rate reducing from 76% to 50%.

Between 2018 and 2019, the inflation rate of Cameroon increased from 1.1% to 2.4%, yet it stayed low within the limit of CEMAC at 3%. The budget deficit had also decreased by 3.8% of GDP in 2017, and in 2018, it fell to 2.5% and is at 2.3% in 2017 as a result of fiscal integration in the course of the three-year time frame between 2017 to 2019. Between 2018 and 2019, the account deficit remained at 3.7% of GDP, and the current account deficit is assessed to be in the same percentage bracket before it fell to 2.6% during the course of 2020. This is also the problem of high, threatening distress from debt, according to a 2018 assessment by the International Monetary Fund with an estimated debt of about 39% of 2018’s GDP, as opposed to the 12% in 2017.

The IMF also predicted a slow ascent of the non-oil development in the country floated by the completion of interests in energy ventures, infrastructure, and a slow resolution of the security issues are the main drawbacks of the economy. As indicated by the Bretton Woods foundation, the mid-term viewpoint stays positive, with non-oil development expected to progressively rise on account of financial integration through 2020 to 2021, which along with upgraded foreign trade repatriation will uphold a continuous modifying of BEAC reserves. Basic changes to build public venture proficiency, reinforce public endeavors, and to back private industry improvement will uphold the development standpoint going ahead.

Development Challenges

Despite the fact that Cameroon's diversified economy stays the strongest in Central Africa, the country experiences bad governance, impeding its growth, turn of events, and capacity to pull in investment. It positions 152 out of 180 nations in the 2018 Transparency International corruption observations list, and 166 out of 190 economies in the 2019 Doing Business report of the World Bank. 

Tailwinds and headwinds

In 2020, development stayed around 4% before easing back to 3.4%. The IMF scheme ended in June 2020, and its impacts are probably going to proceed into 2021. Cameroon assumes a focal part in the Economic and Monetary Community of Central Africa (CEMAC), holding almost 40% of its cash flexibly. From 2014 to 17, a lot of absolute intracommunity exchange added up to 24.7%, supported by the general growth of its economy and the presence of road corridors with all CEMAC nations just as Nigeria. The nation's approval of the African Continental Free Trade Agreement in June 2019 proceeds in this vein. At the same time, the merger in 2020 of two stock trades between Cameroon and Gabon is expected to result in more financial consolidation in the CEMAC zone. The implementation of noteworthy value chain ventures in the pastoral, agroforestry, and fisheries industry should assist with reinforcing the economy.

The steadiness of security issues, explicit Boko Haram attacks in the far north, and sociopolitical strains in the northwest and southwest regions are influencing the economy, with transport, accommodation, media communications, and business farming registering vital material and monetary misfortunes. The administration started a public discourse to address the difficulties In September 2019.

The security costs produced by the different security emergencies and the closure of SONARA (the public petroleum facility) in June 2019 after a fire debilitated the nation's monetary and current record positions. Constraints stay in the medical sector, the health sector, poverty, and business hold Cameroon back from gaining from capitalizing on the capability of the demographic profit. Imparting sufficient training labor skills and high skills is among the nation’s greatest difficulties. Executing the Growth and Jobs Strategy Paper 2010 to 19 has prompted the production of infrastructure, financed generally by borrowing from the public sector. However, development stayed beneath the objective of an average of 5.5% throughout the period.

Notwithstanding the somewhat satisfying monetary actions of the nation, poverty still influences almost 40% of the country’s population, with about 8 million still unemployed. Since the decline rate of poverty in the country is falling behind the population development rate, the general number of the poor in Cameroon has risen, and poverty is progressively concentrated in the North and Far North as indicated by the World Bank. These two regions are additionally hit by the assaults of the Islamist terrorist group called Boko Haram.