Country Brief

Country Brief last updated September 2009

History

At the end of World War I, the German protectorate over Douala was divided between Britain and France. In December 1958, the French-administered region was granted self-government as the Republic of Cameroon. Full independence and United Nations membership were gained in 1960. Ahmadou Ahidjo became the country's first president.

In 1961 British Southern Cameroon was federated with the Republic of Cameroon, while British Northern Cameroon joined Nigeria. Mr. Ahidjo remained president until late 1982. He was succeeded by former Prime Minister Paul Biya, who in 1997 was sworn in as president and was re-elected in 2004 for another seven years. The current prime minister is Mr. Philemon Yang.

Politics

Cameroon is a constitutional republic. A 1996 constitutional amendment extended the presidential term to seven years, with a two-term limit. Another amendment in 2008 removed the presidential term limits. The president and bicameral legislature are popularly elected, with ministers appointed by the president and precluded from legislative office. Cameroon enjoys relative political stability, unlike most other countries in the turbulent Central African sub-region.

Economy

The economy is mainly agricultural. The principal commercial crops are cocoa, coffee, tobacco, cotton, and bananas. Petroleum products make up more than half of all exports. Timber is also a major export.

In the early 1980s Cameroon was one of Africa's economic success stories. However, economic and policy weaknesses were exposed in 1985, when sharp declines in coffee, cocoa, and oil prices led to a 60 % decline in the external terms of trade. These severe terms of trade shock combined with an over-valued exchange rate, fiscal crisis, and economic mismanagement resulted in prolonged economic stagnation and rapid accumulation of public debt. In January 1994, the CFA franc was devalued, but the government was slow to carry out necessary structural reforms that would have enabled a rapid recovery of the economy following the devaluation.

In late 1996 the government of Cameroon changed course and made a commitment to structural reforms and prudent macroeconomic policies. The success of government reforms (forestry, transportation, banking system, and privatization of public utilities) supported by the International Monetary Fund (IMF) and the World Bank translated into better economic performance. Cameroon adopted a comprehensive poverty reduction strategy in 2003, and in April 2006, reached the completion point under the Enhanced heavily Indebted Poor Countries (HIPC) Initiative and became eligible for further debt relief from the IMF, International Development Association (IDA), and the African Development Fund (AfDF) under the Multilateral Debt Relief Initiative (MDRI).

Development progress

With a stable macroeconomic framework and far-reaching structural and institutional reforms, Cameroon’s economy has performed well below its potential over these nearly five decades. From 1997-2007 Cameroon’s per capita gross deomstic product (GDP) growth averaged a modest 1.5% per annum. While this represented a modest recovery from the negative 4.6% per annum per capita GDP growth in the 1987-1997 decade that reflected external shocks and poor policy choices, performance over the two decades has been poor. While poverty headcount declined between 1996 and 2001, the finding of the last household survey (ECAM III) reported no significant change in poverty trends since 2001 (39.9% in 2007 vs. 40% in 2001). At present, income inequities remain serious and social indicators have remained poor. According to ECAM III findings in 2007 over 55% of rural households are poor, as compared to only about 12% of urban ones (changing from 52 and 17 %, respectively, in 2001).

Overall economic growth declined to about 3% in 2008 and is projected to be 2.5% in 2009, due mainly to postponed reforms on business climate, public enterprises reforms, the rapid decline in oil production, and the lower electricity supply that adversely affected industrial activities. Sluggish growth and hikes in the prices of few staple products led to protests in February 2008. The government is seizing the opportunity of the new Poverty Reduction Strategy Paper (PRSP) (2009) to address growth bottlenecks more forcefully.

Challenges ahead

The government of Cameroon has grand ambitions for its future, as reflected in its “Vision 2035” plan. This document served as the anchor for the new PRSP, the Growth and Employment Strategy (Document de stratégie pour la croissance et l’emploi - DSCE), and envisions Cameroon as an “emerging nation, democratic and united in its diversity” by 2035. Its principle objectives include: i) reducing poverty to less than 10%; ii) becoming a middle-income country; iii) being considered an industrialized nation; and iv) consolidating democracy and national unity.

The implementation of the first poverty reduction strategy delivered some results, but the government of Cameroon used new opportunities offered by HIPC completion, eligibility for MDRI and the Paris Declaration on harmonization and alignment, to prepare a 2009 second-generation poverty reduction strategy that is results-oriented.

Aligned to the new strategy, a Country Assistance Strategy (CAS) is in preparation and is expected to be completed in the fall of 2009. The Bank program will directly respond to the government’s stated vision and intentions as outlined in Vision 2035 and the DSCE, which emphasize economic growth. For this reason, the Bank’s overall response will center on the notion of “inclusive growth” during the CAS period. The proposed CAS pillars have been selected based on the main areas of focus of the DSCE’s growth strategy: increased competitiveness and improved service delivery.

World Bank assistance

As of September 2009, the World Bank’s portfolio in Cameroon comprises 20 projects: 13 IDA and Global Environment Facility- financed projects, three regional operations, and four trust fund projects. The commitment value of the portfolio is US$659.5 million equivalent.

For more information, visit Projects and Programs .

The International Finance Corporation (IFC) has a regional office in Douala, and has played a key role in the petroleum sector, railway concessioning, electricity and in privatization.

The Multilateral Investment Guarantee Agency (MIGA) is taking steps to strengthen its presence in Cameroon. There are no active guarantees in Cameroon, but some promising opportunities.

The World Bank works closely with Cameroon’s development partners through its country office in Yaoundé.

Contacts

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