Country Report Cameroon November 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 this event, the ensuing power vacuum could be destabilising.
• Fiscal oil revenue is forecast to fall sharply in 2009, in tandem with global oil prices and in the absence of significant extra crude production. Oil receipts should increase slightly in 2010, in line with rising world prices.
• Real GDP growth is forecast to slow to 3% in 2009, reflecting sharply lower global demand and oil prices, before it accelerates marginally, to 3.1% 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 our downward revision to oil prices in 2009-10, 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 abduction in October of ten oil workers, eight of whom are foreign nationals, from a boat in waters surrounding the Bakassi peninsula has further exposed the region's growing insecurity.
• The alleged kidnapping of an EquatoGuinean dissident who had been enjoying political asylum in Cameroon by agents of Equatorial Guinea's government has strained bilateral relations.
• The RDPC confirmed its dominance of the political scene at rerun local elections in five municipalities held in late October.
• The recent 43-day absence from the country of MrBiya has stoked speculation about the state of his health.
• Sharply lower oil prices since mid-2008 have led the Ministry of Finance to reconsider its projections for the 2009 budget.
• Cameroon's forestry sector has already felt the effects of the global economic slowdown through a sharp drop in orders.
• The government and the privately owned rail operator, Camrail, have begun negotiations over their respective responsibilities for financing new investment.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;70;47;1
NAICS Code: 52;72;48;11