Country Report Cameroon February 2009

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 severe global economic slowdown and tight financial markets.
• Given our forecast for sharply reduced global demand and lower average oil prices in 2009-10, we forecast real GDP growth of just 1.8% in 2009 and 2.3% in 2010.
• 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%. Higher commodity prices will sustain inflation at 3.2% in 2010.
• In line with movements in the trade account and global oil prices, the deficit on the current account is forecast to widen to 5.8% of GDP in 2009, before shrinking to 4% in 2010.

Monthly review

• Amnesty International has severely criticised Cameroon's human rights record. It accuses the government of presiding over violence against the opposition, as well as ordering the use of lethal force against civilians.
• The government has announced that it will not replace the poverty reduction and growth facility (PRGF), which expired in January, with another funded IMF programme. Cameroon will still seek IMF policy advice, however.
• The regional central bank, Banque des Etats de l'Afrique centrale (BEAC), was reported in early February to be facing substantial losses on its investments in a French bank, Societe Generale.
• The government announced in January that it had declared unsuccessful the tender for the sale of a 51% stake in the national fixed-line operator, Camtel, which it has tried to privatise since 1999.
• In January the minister of commerce, Luc Magloire Mbarga, signed an agreement with wholesalers to stabilise prices of some basic goods, mostly food items.
• The national cotton company, Sodecoton, was reported to be facing a loss of CFAfr5.5bn (US$12m) amid lower global prices and domestic production.

This report covers the following industry codes:
SIC Code: 1
NAICS Code: 11