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Select Economic and Financial Indicators 2014 2015 2016 2017e 2018f
Real GDP (% change) 5.9 5.8 4.5 2.8 4.0
GDP (USD bn) 32.1 28.4 29.3 29.0 33.1
Inflation (average) 1.9 2.7 0.9 0.5 0.8
Fiscal Balance (% GDP) -4.0 -2.7 -6.1 -4.5 -5.4
Broad Money (% change, end period) 10.8 9.1 5.6 2.6 5.4
Population (mn) 22.2 22.8 23.4 24.1 24.7
Exports (USD bn) 8.6 6.7 6.2 6.1 6.7
Imports (USD bn) 9.7 7.8 7.0 7.0 7.7
Current Account Balance (% GDP) -4.3 -4.1 -3.6 -4.0 -4.5
FX Reserves (USD bn, end period) 3.9 3.9 2.2 2.3 2.6
Exchange Rate (average) 496.16 594.11 597.41 590.84 581.86
Oil production (mn bpd) 0.073 0.079 0.070 0.083 0.082
Sources: IMF, World Bank, UN, Bloomberg, Ecobank Research

Economic Outlook

Economic Outlook

Real GDP: growth is expected to remain subdued over 2017 as the economy continues to recover from the oil price slump in 2014/15. While oil production and prices are likely to recover, they will remain structurally weak adding only modest value to overall productivity. At the same time, fiscal consolidation efforts aimed at reducing the debt level (which has risen sharply since 2011) will undermine prospect for the government’s infrastructure programme (including plans in preparation for hosting the 2019 Africa Cup of Nations Football Tournament). Investment prospect will also be constrained by high security threats related to Boko Haram in the northern part of the country bordering Chad, and instability in neighbouring Central African Republic. However, in 2018, growth is likely to rebound as election-related spending increases ahead of the 2018 presidential elections. This, alongside the public works programme will create multiplier effects in other sectors, supporting growth above 4%.

Inflation: is likely to remain subdued in 2017 in line with weak domestic demand. This will rise in 2018 in line with an anticipated rise in government spending, but to remain below the 3% regional convergence criterion, supported by the exchange rate peg that helps anchor imported prices.

Fiscal balance: The fiscal deficit is projected to narrow in 2017 on the back of the fiscal consolidation programme, but to remain above the regional benchmark of 3.0% of GDP reflecting continued strong public investment (albeit expected to soften), sustained strong expenditures to counter security threats and weak oil revenue (which accounts for 25–30% of total fiscal revenues). While an IMF-supported three-year economic and financial programme (commencing in 2017) will help to compensate for the latter (via budgetary support and efficiency gains following reforms in the non-oil sector), revenue challenges are likely to persist sustaining pressure on the budget account. In 2018, we expect the budget deficit to widen on the back of the planned election and the fiscal outlays alluded to above. Moreover, large contingent liabilities from state-owned enterprises will continue to compound the fiscal challenges the authorities face. These outlays will continue to offset potential increases in revenue arising from both the oil and non-oil sectors.

Current account: The external sector will remain under pressure given continued strong imports, driven by strong investment spending, notably on infrastructure; this is despite a potential rise in concessionary loans and oil and gas exports and prices.

Risks:

  • Risks to the outlook are largely on the external side, specifically the sustained weakness in oil prices, an escalation of security threats and rising political risk amid uncertainty over the country’s future leader. At the same time, domestic risks, such as delays to structural reforms aimed to strengthen public financial management and contingent liabilities from state-owned enterprises, could have an adverse impact on public finances.

FX, FI and Commodity Information

FX, FI and Commodity Information

Exchange Rate Structure

Regime Fixed
Target XAF655.957 to EUR1
Type of intervention Via Central Bank
Convertible currency? Partial
Market participants n/a
Source: Bloomberg, IMF, and Ecobank Research

FX

FX Products Spot Forwards Non-deliverable Forwards Options Swaps
On offer Yes Yes No No Yes
Daily trading volume (USD mn) 10 (not very liquid) n/a n/a (not very liquid)
Average trade size (USD mn) 1
Average spread 1.00% 2.00% 0.50%
Trading hours 8am – 5pm
Settlement cycle T+2
FX Market Structure BEAC’s exchange regime is free of restrictions on payments and transfers for current international transactions, apart from restrictions maintaned for security.
Non-resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow No restrictions n/a
Financial flow
Resident FX Regulations Spot Forwards Non-deliverable Forwards Options Swaps
Trade and FDI flow As per exchange regulation n/a
Financial flow
Source: Bloomberg, IMF, and Ecobank Research

FI

Primary Market Treasury bills Treasury notes Treasury bonds Central Bank bills OMOs
Issuer Government n/a Government n/a
End use Government financing Government & infrastructure financing
Maturity structure 91- to 364-days 2- to 5-yrs
Coupon Zero Fixed
Coupon payments n/a Annual
Secondary Market
Daily trading volume Limited trading n/a
Average trade size Limited trading
Settlement cycle T+1

Ecobank local affiliate contact details:
Ecobank Cameroun, Rue Ivy French Bonanjo, Douala
Tel: +237 233 43 82 50 / 51
Source: Bloomberg, IMF, and Ecobank Research

FI Primary Market information

FI Primary Market information

Cameroon Debt

Cameroon Debt 2014 2015 2016 2017e 2018f
Government debt (% GDP) 26.2 27.1 32.8 33.9 35.5
Sub-Sahara average 44.3 51.5 54.7 54.8 54.8
External debt (official creditors, % GDP) 16.2 20.4 22.1 27.6 30.6
Sub-Sahara average 25.4 29.5 31.3 33.0 33.4
External public debt stock (USD bn) 5.2 5.8 6.5 8.2 9.5
Share of total sub-Sahara debt (%) 2.1 2.3 2.3 2.6 2.8
Source: IMF and World Bank

Banking sector information

Banking sector information

Banking sector information

Cameroon is the largest banking sector in the Economic and Monetary Community of Central African States (Communauté Économique et Monétaire de l’Afrique Centrale, CEMAC). In 2015 total assets in Cameroon’s banking sector accounted for just over a third of banking sector assets in CEMAC. However, Cameroon’s share has declined by almost 500bps since 2010, ceding its market share to Republic of Congo which has gained 400bps over the same period. As a member of CEMAC, Cameroon’s banking sector is regulated by the regional central bank, Banque des Etats de l’Afrique Centrale (BEAC). BEAC’s supervisory functions are discharged by the Commission Bancaire de l’Afrique Centrale (COBAC). Cameroon’s banking sector is dominated by foreign banks, with 11 of the 13 commercial banks operating in the country having majority foreign ownership (see table below).

Bank ownership structure in Cameroon, 2017

  Ownership Majority Shareholder
Standard Chartered Bank Cameroon (SCBC) Foreign Standard Chartered Bank Plc
Atlantic Bank of Cameroon Foreign Atlantic Financial Group Central and East
BGFIBank Cameroon Foreign BGFIBank SA
UBA Foreign UBA Plc
National Financial Credit Bank Local-private Awanga Zacharia
Ecobank Cameroon Foreign Ecobank Transnational Incorporated (ETI)
Union Bank of Cameroon Foreign Oceanic Bank International Plc
Commercial Bank of Cameroon Foreign CFH Luxembourg 
Citibank Foreign Citibank NA New York
Afriland First Bank Local-private SBF & Co
Société Générale de Banques au Cameroon (SGBC) Foreign Société Générale 
Crédit Agricole – Commercial Bank Corporation (SBC-CA) Foreign IUB Holding
International Bank of Cameroon for Savings and Credit (BICEC) Foreign Banques Populaires Caisses d’Epargne
Source: Ecobank Research

Financial inclusion is weak

According to World Bank data, in 2014 only 12% of Cameroon’s adult population had bank accounts. Even accounting for informal money lenders and saving groups, we estimate that over 85% of the population had access to formal financial services at end-2015. Increasing financial inclusion will be driven by the convergence between mobile telephone companies (telcos) and commercial banks. According to Cameroon’s telecoms regulator (Agence de Régulation des Télécommunications, ART), at end-September 2015 there were 16.8mn mobile phone subscribers in Cameroon, offering the platform for banks and telcos to deliver financial services.

Loans dominate the balance sheet

We estimate that total assets in Cameroon’s banking sector grew by 10% year-on-year in local currency (XAF) terms by end-2015, reaching an equivalent of USD7.5bn. Credit was the primary driver of this growth, with gross loans and advances accounting for around 60% of total assets. Commercial banks primarily lend to private enterprises (established SMEs) and to local and multinational corporations. This segment accounted for over 80% of total outstanding credit (see chart). Credit is largely short term; we estimate that short- and medium-term credits accounted for 80% of total outstanding credits at end-2015, versus just 1% for long-term credits.

Funding

Customer deposits remain the main source of balance sheet funding. At end-2015 we estimate that customer deposits grew by 9% year-on-year in local currency (XAF) terms to an equivalent of USD6bn. Total customer deposits in Cameroon accounted for just over one third of total deposits in the CEMAC region at end-2015. Current accounts dominate customer deposits, making up three-quarters of total deposits. The short term nature of funding continues to limit commercial banks’ abilities to create longer term assets.

Liquidity remains strong

Commercial banks’ liquidity measurement regime in CEMAC is based on the coverage of short-term liabilities as they fall due, requiring coverage of 100% or more. This is in line with the Basel Committee’s liquidity coverage guidelines. As a result, commercial banks in Cameroon had fully covered for their short-term liabilities with coverage hovering above 100% (and averaging 139.5% in FY2014).

Commodity and Trade Information

Commodity and Trade Information

Hydrocarbon & Mineral Production

Cameroon is a major oil producing country in the Gulf of Guinea, with estimated output of 90,000 bpd of crude oil and 20mn standard cubic feet of gas. Most of this is produced by the UK Independent, Victoria Oil & Gas, for export to global markets.

Cameroon’s refinery, the 42,000-bpd SONARA refinery, utilises light sweet crude from Nigeria and Equatorial Guinea. The refinery’s output exceeds the country’s 27,000 bpd domestic demand for most petroleum products and plays a key role in meeting the fuel needs of other CEMAC countries. However, due to capacity issues at SONARA and growing domestic & regional demand, Cameroon remains dependent on LPG imports and is importing increasing volumes of gasoline and diesel. Cameroon consumed an estimated 1.7mn tonnes of petroleum products in 2017. Gasoline and diesel together made up over 75% of fuel consumed.

Cameroon has 3.1mn tonnes of installed capacity for cement, and is a mid-ranking producer of aluminium, with output of 90,000 tonnes in 2015, most of which was for export. The country also produced 1,000 carats of diamonds and 250kg of gold in 2016. Cameroon has large unexploited iron ore deposits, including the large Mbalam-Nabeba project which is being developed by Australia’s Sundance Resources, but so far the country is not producing ore for export.

Soft commodity production

Cameroon is Africa’s fourth largest producer of cocoa, with estimated output of 240,000 tonnes in 2016/17 (August-July), marginally above previous seasons. Cameroon’s cocoa sector has struggled to increase output, owing to erratic weather, low yields (reflecting old tree stock) and outbreaks of disease. The government has ambitious plans to raise output to 600,000 tonnes by 2020, but it is unlikely to achieve this goal unless investment in the sector is substantially boosted.

Cameroon is a small cocoa grinder, with estimated grindings of 30,000 tonnes in 2016/17, a level that has been broadly flat for years. The stagnation of grinding in Cameroon reflects the constraints facing the sector, including bean shortages, quality issues related to the drying and fermenting of beans, and high power costs.

Cameroon also produces small volumes of Robusta and Arabica coffee, with output of 480,000 60-kg bags in the 2016/17 season (October-September). Outturn has plummeted from the peak levels achieved in the early 1990s, following the slump in international prices which led farmers to abandon coffee in favour of more lucrative cash crops. Cameroon is Sub-Saharan Africa’s fourth largest palm oil producer, after Nigeria, Ghana and Côte d’Ivoire, with an estimated production of 320,000 tonnes in 2017. Production has risen steadily in recent years, supported by government plans to plant an additional 30,000 hectares with high-yielding trees. Cameroon is Sub-Saharan Africa’s fifth largest producer of cotton, with estimated output of 102,000 tonnes of cotton lint in 2016/17. Most production occurs in the north of the country and is exclusively marketed by the cotton parastatal, Sodecoton. The country is also Sub-Saharan Afirca’s fourth largest producer of natural rubber (NR), with estimated output of 55,800 tonnes in 2014.

Trade Flows

Imports

Cameroon’s imports totalled US$4.9bn in 2016. Capital and consumer goods, food, crude oil, petroleum products and industrial raw materials made up the bulk of imports, some of which were re-exported to the CEMAC region. Capital goods and industrial raw materials were the largest imports, including machinery & vehicles (US$809mn), electronics (US$533mn), iron & steel (US$327mn), plastics (US$172mn) and cement (US$142mn). This reflects the poor development of local manufacturing and Cameroon’s role as a regional re-export hub. Cameroon imported US$229mn worth of crude oil in 2016, most of which came via the Chad-Cameroon export pipeline for refining in Douala and for export to global markets, as well as US$217mn worth of petroleum products, used both for domestic and regional consumption. Cameroon is also dependent on food imports, importing US$242mn of rice (5.8% of SSA’s total rice imports), US$153mn of wheat and US$282mn of fish in 2016.

Exports

Cameroon’s exports totalled US$2.1bn in 2016. Commodities dominate export flows, making up eight of the country’s top ten exports. Cocoa & cocoa products were the largest export, worth US$778mn, mostly to markets in Western Europe. Cameroon’s other soft commodity exports included wood (US$481mn), cotton (US$149mn), bananas (US$66mn), rubber (US$50mn) and coffee (US$49mn). Cameroon acts as a hub for oil flows, exporting US$121mn worth of petroleum products (mostly to the sub-region) and US$43mn worth of crude oil (mostly from Chad). The country’s only significant metal export is aluminium, worth US$122mn in 2016, most of which went to Italy and France.

  • Flag
  • Population
    23,439,189
  • Area
    475,442 km2
  • Capital
    Yaoundé
  • Largest city
    Douala
  • Official language
    French, English
  • Major languages
    French, English
  • Currency
    Central African CFA franc (XAF)

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