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Quick Facts
- Population:
- GDP (PPP):
- $76.9 billion
- 5.9% growth
- 5.3% 5-year compound annual growth
- $3,249 per capita
- Unemployment:
- Inflation (CPI):
- FDI Inflow:
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Cameroon’s economic freedom score is 51.9, making its economy the 149th freest in the 2018 Index. Its overall score has increased by 0.1 point, with improvements in scores for fiscal health and government integrity offsetting declines in investment freedom and labor freedom. Cameroon is ranked 32nd among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.
Cameroon’s economy continues to suffer from factors that often affect underdeveloped countries, including an inefficient and top-heavy civil service, poor infrastructure, endemic corruption, continuing inefficiencies of a large parastatal system in key sectors, and a generally unfavorable climate for business enterprise. Restrictions on trade through nontariff barriers raise costs. Weak rule of law fails to stem the corruption that erodes incentives for long-term economic expansion. More comprehensive and sustained economic reforms, including increased budget transparency and privatization of state-owned enterprises, are urgently needed.
Background
Cameroon was formed in the 1960s from former French and British colonies. Its stability has enabled development of agriculture, roads, railways, and a petroleum industry. It has made slow progress toward democracy. Longtime President Paul Biya abolished term limits in 2008 and was elected to another seven-year term in 2011 in an election marred by irregularities. Tensions between the Anglophone minority and the central government are rising. The Islamist terrorist group Boko Haram frequently attacks across Cameroon’s 1,230-mile border with Nigeria. The economy depends on oil for about 40 percent of export earnings. Cameroon is building Central Africa’s only deep-sea port in Kribi and wants to tap its great hydropower potential by damming the Lom River.
Enforcement of contracts is neither timely nor efficient. Protection of real and intellectual property rights is weak and slow. The judiciary is incompetent and vulnerable to political interference. Legal complaints can take years to resolve and are subject to rampant judicial corruption. Cronyism is systemic, and bribery is commonplace in all sectors. Revenues from oil, gas, and mining are not openly reported.
The top individual income tax rate is 35 percent, and the top corporate tax rate is 33 percent. Other taxes include value-added and inheritance taxes. The overall tax burden equals 17.8 percent of total domestic income. Over the past three years, government spending has amounted to 21.6 percent of total output (GDP), and budget deficits have averaged 4.0 percent of GDP. Public debt is equivalent to 32.8 percent of GDP.
Cameroon’s generally unfavorable climate for business enterprise is generated by frequent administrative obstructions and red tape, among other problems. The informal economy accounts for an estimated 70 percent of total employment. Youth unemployment may be as high as 75 percent. Prices for food and other consumer goods remain heavily regulated, and the government has announced new subsidies for agricultural and livestock farmers.
Trade is significant for Cameroon’s economy; the combined value of exports and imports equals 51 percent of GDP. The average applied tariff rate is 15.8 percent. Nontariff barriers impede trade. The prevalence of state-owned enterprises limits foreign investment. The financial sector is dominated by multiservice banks. Access to credit remains limited in rural areas, and the cost of long-term financing is high.