The economy of Cameroon was one of the most prosperous in Africa for a quarter of a century after independence. However, the drop in commodity prices for its principal exports - petroleum, cocoa, coffee, and cotton - in the mid-1980s, combined with an overvalued currency and economic mismanagement, led to a decade-long recession. Real per capita GDP fell by more than 60% from 1986 to 1994. The current account and fiscal deficits widened, and foreign debt grew.
Recent signs, however, are encouraging. As of March 1998, Cameroon's fifth IMF program - a 3-year enhanced structural adjustment program approved in August 1997 - is on track. Inflation has been brought back under control. GDP has grown by about 5% a year beginning in 1995. Cameroon has rescheduled its Paris Club debt at favorable terms. The government embarked upon a series of economic reform programs supported by the World Bank and International Monetary Fund (IMF) beginning in the late 1980s. Many of these measures have been painful; the government slashed civil service salaries by 65% in 1993. The CFA franc - the common currency of Cameroon and 13 other African states - was devalued by 50% in January 1994.
France is Cameroon's main trading partner and source of private investment and foreign aid. Cameroon has an investment guaranty agreement and a bilateral accord with the United States. USA investment in Cameroon is about $1 million, most of it in the oil sector.
Cameroon's Financial System
Cameroon's financial system is the largest in the CEMAC region. The banking sector is highly concentrated and dominated by foreign commercial banks. 6 out of the 11 largest commercial banks are foreign-owned, and the three largest banks hold more than 50 percent of total financial system assets. While foreign banks generally display good solvency ratios, small domestic banks are in a much weaker position. Their capitalization is well below the average of banks in the CEMAC region and their profits are close to 2 percent, compared to 20 percent for foreign banks in the country.
Access to financial services is limited, particularly for SMEs. Less than 5 percent of Cameroonians have access to a bank account. Aside from a traditional tendency for banks to prefer dealing with large, established companies, determining factors are also found in interest rates for loans to SMEs being capped at 15 percent and being heavily taxed. While the microfinance sector is consequently becoming increasingly important, its development is hampered by a loose regulatory and supervisory framework for microfinance institutions (MFIs).
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HOW SMALL BUSINESSES CAN BENEFIT FROM BANKS AND MICROFINANCE INSTITUTIONS IN CAMEROON / AFRICA
Climate Finance in Cameroon
As Cameroon is built on the coastal regions with the highest risk of flood mortality, its economic resources of agriculture, on which 60% of its population relies, are shaken. This attracts the question of climate finance to salvage livelihood and security. Climate finance in Cameroon comprises a mixture of the Forest Investment Program (FIP), and domestic, and internationally sourced funding for climate change sustainability, control, and resilience.
According to the United Nations Development Programme (UNDP), countries need more finance for their climate targets than they can source domestically. Thus, in African countries like Cameroon, climate funds become an important source of finance to manage the climate crisis. The report from UNDP stated that 50 percent of mitigation financing tracked in Africa between 2011- 2021 came from MDBs ($37 billion) and 45 percent from bilateral sources ($33.47 billion). It should be remembered that Cameroon signed the Global Methane Pledge to reduce global methane emissions by at least 30% from 2020 levels by 2030.
The World Bank on Climate Change and Development Report (CCDR) in Cameroon estimated the GDP loss to range from 4 to 10 percent in the most pessimistic scenario by 2050 if no action is taken. Cameroon faces challenges in its climate finance mitigation.
Oil Revenue and Transparency
Cameroon became an oil-producing country in 1977. Claiming to want to make reserves for difficult times, the authorities manage "off-budget" oil revenues in total opacity (the funds are placed in Paris, Switzerland and New York accounts). Several billion dollars are thus diverted to the benefit of oil companies and regime officials.
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Historical Context: French Influence
The influence of France and its 9,000 nationals in Cameroon remains considerable. African Affairs magazine noted in the early 1980s that they "continue to dominate almost all key sectors of the economy, much as they did before independence.
Key Economic Indicators
The following table shows the main economic indicators in 1980-2022.
| Year | GDP (Bil. US$ nominal) | GDP per capita (US$ nominal) | GDP (Bil. US$ PPP) | GDP per capita (US$ PPP) | GINI | Human Development Index |
|---|---|---|---|---|---|---|
| 1980 | 9.37 | 942.77 | 18.51 | 1,861.79 | ||
| 1981 | 10.35 | 1,016.38 | 20.21 | 1,987.19 | ||
| 1982 | 10.67 | 1,027.56 | 21.47 | 2,067.09 | ||
| 1983 | 9.60 | 907.61 | 22.32 | 2,113.50 | ||
| 1984 | 8.71 | 804.38 | 23.58 | 2,176.14 | ||
| 1985 | 8.87 | 803.60 | 25.02 | 2,267.85 | ||
| 1986 | 9.49 | 838.05 | 26.79 | 2,364.89 | ||
| 1987 | 10.18 | 879.43 | 28.51 | 2,461.14 | ||
| 1988 | 10.06 | 846.74 | 29.87 | 2,514.81 | ||
| 1989 | 9.98 | 819.69 | 31.40 | 2,581.35 | ||
| 1990 | 10.56 | 845.72 | 33.33 | 2,668.87 | ||
| 1991 | 10.81 | 845.02 | 34.87 | 2,722.99 | ||
| 1992 | 11.39 | 863.71 | 36.75 | 2,789.70 | ||
| 1993 | 9.40 | 689.04 | 37.44 | 2,746.14 | ||
| 1994 | 8.66 | 618.80 | 39.30 | 2,806.54 | ||
| 1995 | 9.50 | 663.92 | 41.58 | 2,902.01 | ||
| 1996 | 10.26 | 702.70 | 44.22 | 3,026.73 | ||
| 1997 | 10.81 | 724.22 | 46.78 | 3,137.84 | ||
| 1998 | 11.56 | 759.57 | 50.24 | 3,298.35 | ||
| 1999 | 12.28 | 793.28 | 53.76 | 3,467.52 | ||
| 2000 | 12.94 | 823.41 | 57.51 | 3,655.71 | 0.451 | |
| 2001 | 13.83 | 865.17 | 61.60 | 3,861.28 | 0.457 | |
| 2002 | 14.72 | 901.26 | 65.65 | 4,023.10 | 0.463 | |
| 2003 | 16.42 | 988.05 | 70.25 | 4,224.67 | 0.472 | |
| 2004 | 18.61 | 1,103.84 | 76.00 | 4,508.28 | 0.481 | |
| 2005 | 20.44 | 1,197.04 | 82.09 | 4,803.61 | 0.488 | |
| 2006 | 22.39 | 1,289.01 | 89.36 | 5,141.02 | 0.494 | |
| 2007 | 24.36 | 1,377.17 | 97.04 | 5,487.69 | 0.503 | |
| 2008 | 27.61 | 1,530.49 | 106.14 | 5,884.92 | 0.512 | |
| 2009 | 26.14 | 1,416.27 | 110.17 | 5,973.72 | 0.520 | |
| 2010 | 28.33 | 1,509.43 | 118.13 | 6,294.82 | 0.528 | |
| 2011 | 31.35 | 1,645.33 | 127.25 | 6,678.23 | 0.536 | |
| 2012 | 34.71 | 1,788.62 | 137.30 | 7,079.07 | 0.543 | |
| 2013 | 36.87 | 1,868.97 | 147.29 | 7,465.85 | 0.550 | |
| 2014 | 38.78 | 1,938.01 | 157.08 | 7,852.34 | 0.556 | |
| 2015 | 35.97 | 1,767.60 | 165.97 | 8,147.34 | 0.563 | |
| 2016 | 34.60 | 1,667.99 | 174.83 | 8,417.08 | 0.568 | |
| 2017 | 38.26 | 1,819.14 | 184.90 | 8,807.85 | 0.574 | |
| 2018 | 40.91 | 1,919.06 | 196.18 | 9,190.10 | 0.582 | |
| 2019 | 43.50 | 2,018.56 | 208.02 | 9,636.21 | 0.587 | |
| 2020 | 40.76 | 1,858.90 | 214.77 | 9,785.16 | 0.590 | |
| 2021 | 45.35 | 2,029.29 | 227.99 | 10,196.46 | 0.597 | |
| 2022 | 44.32 | 1,933.49 | 239.11 | 10,429.86 |
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