Country Report Cameroon December 2008

Outlook for 2009-10

• The Economist Intelligence Unit forecasts that the ruling Rassemblement democratique du peuple camerounais (RDPC) will continue to dominate the political scene during 2009-10.
• Given the advanced age of the president, Paul Biya, and the reportedly fragile state of his health, his departure from office as a result of sickness cannot be ruled out. In such an event the ensuing power vacuum could be destabilising.
• The government will struggle to secure foreign investment for infrastructural and agricultural development projects amid the global economic slowdown and tight financial markets.
• Real GDP growth is forecast to slow to 2.6% in 2009, reflecting sharply lower global demand and oil prices, before it accelerates marginally, to 2.7% in 2010, in line with a slight pick-up in oil prices and production activity.
• World prices for food and fuel will drop in 2009, but lower subsidies will offset some of this deflationary pressure, leading to average inflation of 3.5%. Higher commodity prices will sustain inflation at 3.6% in 2010.
• In line with movements in the trade account and global oil prices, the current account is forecast to return to deficit, equivalent to 2% and 2.2% of GDP in 2009 and 2010 respectively.

Monthly review

• The local press have reported that the French president, Nicolas Sarkozy, will visit Cameroon in early 2009 in order to boost co-operation between the two countries, especially in security.
• In early November the government replaced three military commanders who were in charge of security in the port city of Limbe, presumably in response to their handling of the robbery of three banks in the city two months earlier.
• The draft budget for 2009 has been published, providing for spending of CFAfr2.3trn (US$5.4bn), a drop of CFAfr171bn on the 2008 budget. But the opposition has still criticised the spending provisions as unrealistically high.
• The business community has voiced concerns that the government will encounter difficulties in meeting its revenue targets, which could lead it to raise tax rates and to accumulate domestic arrears to the private sector.
• In November it was reported that three foreign firms had formed a consortium to exploit the bauxite deposits in the north of the country.
• The national oil company, Societe nationale des hydrocarbures, has signed an agreement with a French firm, GDF-Suez, to conduct a feasibility study for the construction of a liquefied natural gas plant in the country.

This report covers the following industry codes:
SIC Code: 10
NAICS Code: 212