CMR shd boost economy by increasing investment - Expert

With a strategic geographical position at the edge of the Gulf of Guinea, natural outlet for the country and the landlocked regions of Central Africa (Chad, Central African Republic and Northern Congo), Cameroon is undoubtedly an influential country in the economic and Monetary Community of Central African.

For economic intelligence of Africa care experts, Cameroon needs to booster its economy by increasing more investments. The economy with a slight increase in 2013 (4.9% against 4.4% in 2012), should remain vigorous in 2014 (forecast of 5% according to the African Development Bank).

Cameroon has abundant and varied natural resources (oil, timber, cocoa, fruits, rubber, cotton). However, the business environment remains difficult, which hinders the participation of the private sector.

The country continued to suffer from chronic under-investment in recent years (particularly in the electricity sector) and the economy remains highly exposed to the volatility world commodity prices, including those of oil (49% of exports) and 29% of budgetary revenues.

The increase in investment is reflected in imports of capital goods, but the export growth is expected to decline slightly with regard to GDP in 2014. This deficit is, moreover, covered without major difficulty by long-term debt and foreign direct investment, the most targeted sector being that of the extractive industries.

The overall budget deficit, base Fund and donations is estimated at 4.1% of GDP in 2013, against 2.5 per cent of GDP in 2012. The increase in spending has contributed to the deterioration of results. With regard to inflation, it dropped to 1.9%, against 2.4% in 2012.

Thanks to the debt relief obtained in 2006 under the Initiative for heavily indebted poor countries and multilateral debt relief Initiative, public debt has been reduced to a sustainable level. However, its stock and its service could significantly increase in the coming years, due to the progression of domestic debt and an increasing use of non-concessional loans.

The banking system has stabilized but, some small commercial banks remain in deep trouble and their restructuring is expected. The rest of the sector, dominated by large international banks, is healthy but remains exposed to the excessive concentration of credit on a small number of borrowers, including the refinery of national petroleum (SONARA), itself compromised by delays in payment from the Government. Bad debts remain at a relatively high level.

Cameroon remains politically one of the most stable countries in the region with President Biya (age 81) re-elected in October 2011, for a term of seven years.