Government underestimate the risk involved in EPA ratification

The Government is underestimating the risks involved in the Economic Partnership Agreement (EPA) between the European Union, its Member State and the Central African countries which Cameroon signed on January15, 2009.

As per the information gathered from the press conference of the Minister of Communication, Issa Tchiroma Bakary and the Minister of the Economy, Planning and Regional Development, Emmanuel Nganou Njoumessi on July 15; experts indicate that there would be an important increment in goods imported from the EU to Cameroon than the exports from Cameroon to the EU and there would be a limited incitation of the economy. Consequently there would be a deterioration of the balance of payment.

However, the Minister of Economy stated that the importation would not be raw materials but machines and equipment given that Cameroon embark in many construction projects.

Government is expected to inject FCFA 2,500billion in an adaptation plan to beef up the economy by sting on the average, 600 Cameroon enterprises. Also, there would be a decline in Custom duties and Government argues that it would be a reduction in net balance maintaining that the gap would be filled by an internal financial reform.

Generally, the risks would be minimised if Government implements the adaptation plan, the law on private investment, among others, to ward off the shocks. Tchiroma maintained that the country cannot stay in isolation and that countries of the sub-region that do not conform would eventually be closed to the EU market and would have to go through hurdles exporting their products.

To him, in 2013, the economy witnessed a growth of 5.5 percent against 4.6 percent in 2012 and 4.1 percent in 2011. They could therefore forecast that 2014 is expected to go beyond the growth rate of 2013.

This means that the Gross Domestic Product per inhabitant has moved, within the same period, from FCFA 631 in 2011 to FCFA 663 in 2012, and FCFA 696 in 2013, he said.

Regarding the Public Investment Budget, one of the major factors is the increasing growth rate; FCFA1,000 billion in 2014 against FCFA 957 billion in 2013, an increment of 4.5 percent representing about 30 percent of the whole State budget.

Three groups of products concerned are: Rapid liberalisation group; products for household consumption up to 30 percent of the total group, which are basic necessities that contributes to poverty alleviate ; raw materials, 19 percent of the group and Capital goods, 27 percent, to enable local enterprises to get access to useful inputs for their production process at lower costs.

These include drugs, books, seeds or animals’ breeders and the liberalisation this group of products was foreseen to be achieved within four years, starting from the first liberalisation year, in 2010.

The slow liberalisation group to encourage the local production is made up of machines and other capital goods, 35 percent, semi-finished products, 39 percent and other raw materials meant to support the local industry. The liberalisation of this group constitutes a support to investments, paving the way for local enterprises to update their equipment and improve their competitiveness.

In this group, we have mechanical machines and equipment; new vehicles, agricultural machines, electrical machines and equipment etc.

Products included in this group are meant to be liberalised over a period of seven years, from the second year of liberalisation, 2011.

The third group, known as the very slow liberalisation Group is to protect the local production and not avoid any interference over the tax revenues. It is made up of products with high prices, semi-finished products, 12 percent, and capital raw materials and capital goods, 34 percent.