Country Report Cameroon July 2008

Outlook for 2008-09

• The 75-year-old president, Paul Biya, supported by the ruling party, Rassemblement democratique du peuple camerounais (RDPC), will continue to dominate the political scene during the forecast period.
• The recent social unrest caused by unemployed youth is a source of concern for the regime, since it could become a formidable challenge if it were to become politically organised.
• The regime will continue to seek closer ties with countries interested in developing Cameroon's untapped natural resources.
• One of the government's priorities will be to contain the rapid rise in the cost of living.
• Real GDP growth is expected to remain subdued, at 3.6% in 2008, owing to the negative effect of social unrest on investment plans, although it will accelerate to 4.8% in 2009 as construction of new mining projects begins.
• High oil and food prices in international markets will put upward pressure on prices, and inflation is expected to rise from an estimated average of 1.1% in 2007 to 4% in 2008 and 3% in 2009.
• The current account is forecast to post a surplus equivalent to 1.4% of GDP in 2008, before turning again to a deficit of 0.2% of GDP in 2009 owing to a moderate fall in oil prices.

Monthly review

• A deputy regional governor and five soldiers have been killed by unknown assailants in the Bakassi peninsula.
• The National Assembly has passed a law extending the deadline for appointing the 14 members of the independent electoral body, Elections Cameroon (Elecam), until January 2009.
• The IMF has extended by six months the three-year poverty reduction and growth facility (PRGF) arrangement with Cameroon, which was expected to end in July 2008.
• The regional central bank has raised some of its interest rates in order to prevent states and commercial banks from accessing cheap credit.
• The government has called for the integration of micro-finance institutions in the country's financial system.
• There is increased concern that the rising cost of inputs is constraining the expansion of agricultural production in Cameroon.

Source: Country Report