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- GDP (PPP):
- $50.8 billion
- 4.7% growth
- 3.5% 5-year compound annual growth
- $2,366 per capita
- Inflation (CPI):
- FDI Inflow:
Cameroon’s economic freedom score is 52.6, making its economy the 136th freest in the 2014 Index. Its overall score is 0.3 point better than last year, reflecting gains in trade freedom and fiscal freedom. Cameroon is ranked 29th out of 46 countries in the Sub-Saharan Africa region, and its overall score is lower than the regional average.
Over the 20-year history of the Index, Cameroon’s economic freedom has been stagnant near the lower boundary of the “mostly unfree” category, and its overall score has improved only 1.3 points. Deteriorations in half of the 10 economic freedoms, including property rights, investment freedom, and monetary freedom, have counterbalanced notable improvements in trade freedom and fiscal freedom.
Substantial challenges remain in the struggle to promote stable long-term economic development, and lingering institutional weaknesses call for much greater commitment to reform, particularly in two areas. Cameroon continues to score below the world average in freedom from corruption and the protection of property rights, and marginal reforms in these critical areas have failed to generate much improvement.
President Paul Biya has held office since 1982 and was re-elected in October 2011. Though he claimed 78 percent of the vote, the election was marred by irregularities. Relative stability has allowed Cameroon to develop limited infrastructure to support its emerging oil sector. Although the government claims to maintain strong civil-rights laws, charges of discrimination and abuse of human rights are abundant. In 2012, Cameroon tightened its border security with Nigeria after attacks by the Nigerian terrorist group Boko Haram. Cameroon’s economy, highly dependent on commodity exports and subject to burdensome regulation, has been seriously affected by the global economic slowdown. The International Monetary Fund is calling for reforms to reverse the hostile business environment and attract more infrastructure investment.
Corruption remains endemic in Cameroon and raises the costs and risks of doing business. President Biya’s long tenure in office has encouraged cronyism, and members of his Beti ethnic group dominate many key positions. Protection of real property rights is weak due to pervasive corruption and a slow, inefficient judicial system that is vulnerable to political interference. Intellectual property rights are routinely violated.
Cameroon’s top individual income tax rate has risen to 35 percent. The top effective corporate tax rate is 38.5 percent (35 percent plus a 10 percent surcharge). Other taxes include a value-added tax (VAT) and an inheritance tax. The overall tax burden is 11 percent of GDP. Public expenditures are 22 percent of GDP, and public debt amounts to about 15 percent of gross domestic income.
The time and number of procedures required to launch a business have been reduced over the years, but completing licensing requirements still costs over 10 times the average level of annual income. The labor market does not function efficiently. The government’s excessive subsidization (for example, for fuel and electricity) and inefficient public financial management systems limit public infrastructure investment.
Cameroon’s average tariff rate is 11.9 percent. As with other members of the Central African Economic and Monetary Community, it may take weeks to import cargo. The legal and regulatory systems can be difficult for foreign investors to navigate. The financial sector is dominated by multi-service banks. Despite efforts to shore up financial intermediation, access to credit remains limited in rural areas, and the cost of long-term financing is high.