Cameroon’s inflation rate averaged 6.3% between April 2023 and April 2024, according to a report on household consumer prices from the National Institute of Statistics (INS). This rate remains more than double the 3% tolerance threshold within the CEMAC.

However, there was a decrease of over 1% from the 7.4% recorded in 2023. The INS noted that the 2023 rate was the third highest in 29 years, following 32.5% and 9% in 1994 and 1995, respectively, after the CFA franc devaluation.

The INS identified key inflation drivers as an 8.7% increase in food prices and a 15.7% rise in transport costs. “The rise in food prices is mainly due to higher prices of bread and cereals, vegetables, and fish and seafood. The increase in transport costs is primarily due to higher road passenger transport costs, driven by fuel price adjustments at the pump starting February 3, 2024,” the report stated.

Monetary policy had a limited impact on inflation. The rate averaged above 6% from April 2023 to April 2024, despite the Central African States Bank (Beac) intensifying its austerity measures since late 2021. Beac’s measures included suspending liquidity injections into banks, intensifying liquidity withdrawals, issuing Beac bonds to remove liquidity from banking systems, and gradually raising key interest rates.

Beac aims to dry up banks to tighten access to financing for states, individuals, and other economic operators. Central bank analysts believe restricting credit access reduces the proportion of monetary-origin inflation in CEMAC countries. However, Beac officials admitted that only 20% of the current inflation is of monetary origin.

Source: Business in Cameroon

The Bank of Central African States (BEAC) has resumed liquidity injections into banks in the Economic and Monetary Community of Central Africa (Cemac), marking the first such operation since February 2023. The BEAC injected CFA 120 billion, per a statement released on June 11.

As a reminder, the bank has decided to suspend injections as part of its tightening of monetary policy aimed at combating galloping inflation in the Cemac zone. However, before this suspension, the central bank of the Cemac countries had progressively reduced the volume of its weekly liquidity injection operations in banks, from CFA250 billion to just CFA50 billion.

BEAC officials explained that the reduction and suspension of liquidity injections were intended to dry up banks’ cash reserves, restricting access to financing for governments, individuals, and businesses. The central bank hoped this would address the estimated 20% of inflation attributed to monetary factors.

The BEAC did not clarify whether this liquidity injection is a one-time operation or a response to the banks’ increasing need for funds after more than a year of tightened credit conditions. Since late 2021, Cemac banks have faced severe restrictions on accessing central bank refinancing tools, including higher key interest rates and the halt of liquidity injections.

On the contrary, banks have endured significant withdrawals from their reserves through intensified liquidity absorption operations and the recent issuance of BEAC bonds, further draining their liquidity. Despite these measures, inflation remains high in Cemac countries. In Cameroon, for instance, inflation rose by an average of 6.3% from April 2023 to April 2024, according to the National Institute of Statistics. This rate is more than double the 3% threshold tolerated in the Cemac region.

Source: Business in Cameroon

An International Monetary Fund (IMF) team, led by Ms. Cemile Sancak, Mission Chief for Cameroon, visited Yaoundé during April 25-May 8 and held virtual meetings during May 9-31 to discuss progress on reforms and the authorities’ policy priorities in the context of the sixth reviews of the four-year program supported by the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) arrangements, and the first review of the Resilience and Sustainability Facility (RSF). The ECF/EFF arrangements were approved by the IMF Executive Board for a total amount of SDR 483 million (US$ 689.5 million) in July 2021 (see press release 21/237). An extension of these arrangements of 12 months was approved in December 2023 to allow more time to implement the policies and reforms, and access was augmented by SDR 110.4 million (US$ 147.6 million, see press release 23/469). The 18-month RSF was approved by the Executive Board in January 2024 in the amount of SDR 138 million (US$ 183.4 million, see press release 24/30).

At the conclusion of the discussions, Ms. Sancak issued the following statement:

“The IMF and the Cameroonian authorities have reached staff-level agreement on the sixth reviews of the ECF/EFF arrangements, and the first review of the RSF arrangement. The agreement is subject to approval by the IMF Executive Board, with Board consideration expected in late June. Completion of the reviews would enable disbursement under the ECF/EFF arrangements of SDR 55.2 million (US$ 73.0 million), and disbursement under the RSF arrangement of SDR 34.5 million (US$ 45.6 million).

“Preliminary data indicate that Cameroon’s post-COVID-19 recovery continued last year, with overall growth of 3.3 percent. This is lower than the 3.6 percent realized in 2022 and the previous growth forecast of 4 percent in 2023 due to a combination of external and internal factors, including supply chain and energy disruptions and a contraction in domestic oil production. Inflation subsided from 7.3 percent at the end 2022 to 5.9 percent at end 2023.

“Headline fiscal developments were broadly in line with program objectives. The non-oil primary deficit improved to 2.6 percent of GDP in 2023 (from 3.9 percent in 2022). The consolidation effort was supported by a strong non-oil revenue and the government’s efforts to reduce costly fuel subsidies. However, effective public financial management remains a persistent challenge, with substantial extra-budgetary expenditure in 2023. This translated in overruns on current spending, and the non-oil primary deficit target under the program was missed by a small margin. The current spending overrun also constrained resources for priority, pro-growth investment, underlining the need to redouble efforts to strengthen budget integrity and execution. The authorities intend to introduce a revised 2024 budget to limit expenditures executed through treasury advances and adopt a plan to clear domestic arrears, among others. There was a minor breach of the ceiling on the accumulation of new external payment arrears. 

“Prospects remain favorable provided continued reform and a supportive external environment. Economic growth is now expected to increase to around 4 percent in 2024. The decline in inflation will be gradual given the impact of the second pump price increase early in 2024, and it will reach 5.5 percent by year end. The authorities are preparing a revised budget for 2024 and have expressed their continued commitment to maintaining macroeconomic stability and to further reducing the non-oil primary fiscal deficit to 2 percent of GDP in 2024.

“The authorities are making good progress on their structural reform agenda. Meeting the ambitious objectives of the national development strategy for 2020-30 (SND30) will require stepping up these efforts, especially those that would create fiscal space for infrastructure investment while maintaining debt sustainability. Reforms to support a deep structural transformation of the economy also need to be accelerated, including to improve the business climate for the private sector. The mission encouraged the authorities’ efforts to strengthen the performance and financial management of public enterprises, complete technical studies related to the restructuring of SONARA, and strengthen the anti-corruption framework.

“The authorities recognize the need to strengthen Cameroon’s resilience to climate change. Under the RSF, the government has intensified its efforts to improve the climate policy framework. Work is well advanced on the initial reform measures that entail adoption of an order establishing the institutional framework for the coordination of the climate agenda, and publication of a project selection procedure manual that integrates criteria relating to climate change. Work is ongoing on a series of important reform measures, including a national climate plan, a national strategy for disaster risk financing, climate-related public investment management, and in the governance and sustainability of the forestry sector.

“The IMF team met with the Prime Minister, Joseph Dion Ngute, the Minister and Secretary General of the Presidency, Ferdinand Ngoh Ngoh, the Minister of Finance, Louis Paul Motaze, the National Director of the BEAC, Emmanuel Nkoa Ayissi, and other senior officials. The mission also met with representatives of development partners, the diplomatic community, the private sector, and civil society. The team wishes to thank the Cameroonian authorities for their excellent cooperation.”

Reported by the IMF Communications Department

Customs officers at Douala International Airport, in Cameroon’s bustling economic hub, seized a consignment of 24 kg of cocaine from Sao Paulo, Brazil, on May 30, 2024. The announcement came from the communications department of the General Directorate of Customs under the Ministry of Finance. The intercepted shipment is reported to be worth $2 million or over one billion CFA francs, as per the same source

The drugs were concealed in eight packages weighing a total of 166 kg. Upon inspection of these packages, “customs officers found shoes and handbags with wooden handles, inside which 24.5 kg of cocaine were carefully concealed,” it was reported. The suspect, approximately 60 years old, along with the evidence, was handed over to the Public Prosecutor near the Douala-Bonanjo High Court.

This is one of the largest drug seizures in recent years at Douala International Airport. It is also the second significant cocaine seizure at this airport since the beginning of 2024. Indeed, 15 kg of cocaine had already been seized at the same airport on February 27, 2024, on a Turkish Airlines flight. Valued at approximately CFA600 million, the shipment was concealed in boxes and bottles of cosmetic products.

Since 2016, there has been a notable rise in drug seizures and the interception of other illicit goods at Douala and Yaoundé-Nsimalen airports, which are the primary airports in Cameroon. This increase is attributed to the establishment of anti-trafficking airport units (CAAT) in select airports across the country.

According to the regulations establishing them, CAATs are responsible for “collecting and sharing information in real-time between connected airports, as part of the fight against illicit trafficking; conducting more efficient checks on people, baggage, cargo, and postal items in transit, upon arrival and departure, in the fight against illicit trafficking; and conducting risk analysis.”

Source: Business in Cameroon

Africa’s economy has shown resilience overall despite global conditions but growth needs to be in double digits to truly tackle poverty on the continent, the African Development Bank (AfDB) said on Thursday.

The pan-African economic institution also emphasised the need to create more jobs and further industrialise, during a presentation on Africa’s economic outlook at the bank’s annual meetings in Nairobi.

“African economies are operating like everybody else within a very, very challenging global context,” AfDB president Akinwumi Adesina said.

He noted high inflation and the war in Ukraine as well as the difficulties — and costs — faced by African nations seeking to raise money on global capital markets.

“Despite all of these headwinds… African economies have done pretty well,” Adesina said.

The bank is forecasting overall African economic growth at 4.3 percent next year from an estimated 3.7 percent in 2024 and 3.1 percent last year.

And it says 10 out of the 20 fastest growing economies in the world are in Africa.

But Adesina warned: “We need to be very clear as well, that just having real GDP growth at that level is not enough to be able to get our hundreds of millions of people out of poverty.

“We believe that African economies ought to be growing at double digits for probably the next decade or so to be able to have the kind of transformation that we need as a continent.”

In 2023, more than 460 million of the 1.2 million people in sub-Saharan Africa were considered extremely poor by the World Bank.

The AfDB estimates that between 10 and 20 million young Africans join the job market each year, while only three million new jobs are available.

“We have to make sure that our growth is also delivering value for the youth and for the women,” Adesina said.

“We don’t eat GDP. Doesn’t matter how (good) that GDP is. We have to make sure that it’s creating jobs, quality jobs.”

Source: AFP

Cameroon’s imports of mechanical and electrical machines and equipment reached CFA656 billion in 2023, up CFA136 billion (26%) from the CFA520 billion spent in 2022. The figures were reported by the National Institute of Statistics (INS).

The INS report on Cameroon’s foreign trade highlights that imports of these goods accounted for 13.2% of total import expenditures in 2023. This rise underscores Cameroon’s commitment to bolstering its technological and industrial capacities.

Let’s however note that the report does not specify the reasons behind the surge in equipment imports or the countries of origin for these machines and devices.

Source: Business in Cameroon

In 2023, only 12.7% of Cameroon’s export earnings (CFA2,988.6 billion) came from African trading partners. According to figures released by the National Stats Agency (INS), this share of export earnings is equivalent to what Cameroon captured solely from its exports to France, its second-largest customer in 2023, behind the Netherlands.

As far as imports are concerned, trade between Cameroon and African countries presents an even bleaker picture. “Imports from African countries (in 2023) fell by 2.2 percentage points on the previous year, representing 9.5% of total import expenditure (CFA4,993 billion). Within this sub-group, Côte d’Ivoire leads with a share of 1.5%, followed by Morocco and South Africa. This low proportion of trade between African countries highlights the opportunity offered by the African Continental Free Trade Area (AfCFTA) to strengthen and promote intra-African economic ties”, said the INS. However, INS data revealed a lack of adoption by many African states of this preferential trade regime, which came into force on January 1, 2021, opening the doors to a vast market of around 1.3 billion consumers on the continent.

In October 2022, Cameroon cautiously ventured to boost intra-African trade by making its first exports under the AfCFTA. On October 19, 2022, Cameroonian customs issued AfCFTA certificates to agri-food companies Cameroon Tea Estate and Ndawara Tea Estate for the export of 38.6 kg of Cameroonian tea to Ghana. These companies, headed by billionaire Baba Danpullo, have followed the example of Gic Afatex.

Since October 6, 2022, this SME has become the first Cameroonian company to export goods (dried safou and pineapple, ginger) to Ghana under the AfCFTA preferential tariff. The first import under this preferential regime took place on July 2, 2023, involving a cargo of resin imported from Tunisia by Inoda Industries Sarl, which specializes in the production of paint and coating materials.

Source: Business in Cameroon

Camair-Co continues to face a debt burden of XAF124 billion Central African francs (USD203.7 million), making it the second most indebted state-owned enterprise in Cameroon, according to the country’s latest monthly public debt review.

Released on April 25, the report by Cameroon’s public debt management committee (Comité National de la Dette Publique – CNDP) and national debt recovery fund (Caisse Autonome d’Amortissement – CAA), viewed by ch-aviation, reveals that Camair-Co carried XAF62.4 billion (USD102.5 million) in domestic debt and XAF61.6 billion (USD101.2 million) in external debt by March 31, 2024. The highest debt, of XAF652 billion (USD1 billion), is shouldered by national oil refinery Société Nationale de Raffinage (Sonara).

Unprofitable since its incorporation in 2006, the technically bankrupt national carrier was among four state-owned enterprises that were placed under performance contracts in 2023 as part of government efforts to improve the viability of public enterprises under the supervision of the International Monetary Fund (IMF). The government of Cameroon is currently implementing a USD689.5 million Economic and Financial Programme for 2021-2024 supported by the IMF’s Extended Credit Facility (ECF) and Extended Fund Facility (EFF).

The financial strain on the fiscus has led to discussions of privatisation. The possibility of listing Camair-Co was mentioned in a report last year by a technical committee tasked with rehabilitating state-owned enterprises (SOEs). In 2020, President Paul Biya instructed the government to develop a restructuring plan to revive the carrier and sell 51% to a strategic private investor. However, the state-run enterprises rehabilitation commission (Commission Technique de Réhabilitation des Entreprises du Secteur Public – CTR) emphasised that before any divestment Camair must clean up its balance sheet and improve its financial standing. Efforts to address this include a restructuring and revitalisation plan, supported by the presidency since September 2020.

Meanwhile, the airline is wet-leasing three Embraer jets to resume regional routes later this month, to Cotonou Cadjehoun in Benin and Pointe Noire and Brazzaville in Congo.

Source: ch-aviation

The feasibility study for the construction of a railway line between Cameroon and Chad has been completed, according to information released by the Ministry of Transport’s communication unit. Although the findings of this study, disclosed in April 2024, have not yet been made public, Business in Cameroon has learned that it highlights three distinct routes totaling nearly 2,100 kilometers. This study aimed to identify the best route, although the specific paths studied were not specified.

However, during the European Union (EU) and Cameroon Business Week on February 20in Yaoundé, a senior official from the Ministry of Economy, Planning, and Territorial Development indicated that three possible routes, with varying costs, had been proposed, as reported by SBBC. The first proposed route would start from Ngaoundéré, the regional capital of Adamaoua, and reach the Chadian capital, N’Djamena, passing through Garoua, Maroua, and Kousseri in Cameroon. This route would require an investment of CFA4,829 billion.

The second route would also start from Ngaoundéré to N’Djamena, this time passing through the Chadian cities of Moundou, Kélo, and Bongor, with an estimated cost of CFA2,988 billion. As for the third and final proposed route, linking Ngaoundéré to N’Djamena via Garoua, Figuil, Kéré, Pala, Kélo, and Bongor, it would require a budget of CFA4,948 billion. Initially, two routes with lower costs were considered: a 400 km railway line connecting Ngaoundéré to Moundou for an investment of CFA1,160 billion, and a 1,400 km route passing through Garoua and Maroua to reach N’Djamena, costing CFA1,400 billion. So far, no definitive agreement on the route has been reached.

To finance the feasibility study, Cameroon and Chad secured a loan of 2 million units of account (over CFA1.2 billion at the current value of the US dollar) from the African Development Bank (AfDB). The agreement was signed in Yaoundé on February 20, 2021, between the Cameroonian Minister of Economy, Planning, and Territorial Development, Alamine Ousmane Mey, and the AfDB country representative, in the presence of the Cameroonian and Chadian Ministers of Transport. This project is expected to not only connect the northern regions of Cameroon but also facilitate the transit of goods from the port of Douala to Chad.

Source: Business in Cameroon