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TRADE POLICY REVIEWS: FIRST PRESS RELEASE, SECRETARIAT AND GOVERNMENT SUMMARIES
Cameroon: February 1995

Cameroon's comprehensive macroeconomic and structural reform programme has gone a long way towards reversing the country's previous inward-looking anti-export policies, according to a WTO Secretariat report on Cameroon's trade policies and practices.

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See also:

Second press release
Chairperson’s concluding remarks


PRESS RELEASE
PRESS/TPRB/2
10 February 1995

"Attracting substantial new investment, particularly foreign, is a precondition to exploiting fully those new opportunities," Back to top

Trade policy review of Cameroon

Cameroon's comprehensive macroeconomic and structural reform programme has gone a long way towards reversing the country's previous inward-looking anti-export policies, according to a WTO Secretariat report on Cameroon's trade policies and practices. Recent economic reform measures have dismantled to a large extent the extensive price controls and guaranteed producer price system while the introduction of a new tariff schedule in January 1994, has helped provide a legal framework to fight illicit trade practices and unfair competition.

The report says Cameroon's international trade system, including new customs and fiscal regimes, are recent changes to part of a reform programme to reverse a prolonged economic downslide triggered by the halving of world petroleum prices in 1986. The ensuing sharp falls in export revenue and government income required increasingly stringent internal measures to keep the overall budget deficit under control.

Cameroon and other countries using the CFA franc issued by the Bank of Central African states were subject to a 50 per cent devaluation of the CFA franc in January 1994. The devaluation should help to restore Cameroon's competitiveness and achieve a sustained higher level of exports, thereby underpinning stable growth. However, this now hinges in part on containing inflation so as to preserve cost advantages. The report says that while there are signs that this strategy might be working, Cameroon's "process of economic reform is still fragile" and that "inadequate investment levels remain a serious constraint to a sustained economic recovery." Moreover, in the long-run, the piecemeal pursuit of investment risks creating ventures with uncertain long-term prospects.

Before 1994, Cameroon's tariff yielded relatively low revenue because of the widespread use of exemptions, necessary in part to offset the strong anti-export bias linked to the appreciation of the CFA franc. A complex import regime resulted in high protection for some industries at a high fiscal cost. With other members of the Central Africa Customs and Economic Union, Cameroon reformed its common external tariff in January 1994 and introduced in June a new General Trade Schedule which seeks to consolidate the country's import liberalization measures. The reforms include measures to streamline export procedures and reduce export duties to take advantage of the CFA devaluation. According to the report, tariff escalation in the new Schedule is substantial in areas such as textiles and clothing and basic metal products.

Cameroon has made little use of multilateral commitments to reassure investors and other economic agents of the permanence of its new outward economic orientation. Cameroon had no tariff bindings in the pre-Uruguay Round GATT and implementation of the Uruguay Round results will lead to only a handful of new tariff bindings for industrial products. All agricultural products are now bound but the ceiling rates "are many times higher than the currently applied tariffs." The report says "the low level of multilateral commitments is of particular concern because there appear to be few institutional constraints to prevent protectionist measures creeping back into Cameroon's trading system."

Exports, however, are now largely uncontrolled and authorizations have been removed with only selected products subject to controls. In addition, free zone legislation has been introduced to promote export-oriented investment. Although state monopolies still include public services, petroleum, telecommunications and international shipping, the high level of state involvement in other sectors has been progressively reduced.

The Uruguay Round market access and services commitments should complement Cameroon's reforms. As the country's reforms take root, exporting firms should find import barriers falling and export opportunities expanding. However, "attracting substantial new investment, particularly foreign, is a precondition to exploiting fully those new opportunities," says the report.

Notes to Editors

1. The WTO Secretariat's report, together with a report prepared by the Government of Cameroon will be discussed by the WTO Trade Policy Review Body (TPRB) on 13 and 14 February 1995. The review of Cameroon is carried over from the 1994 programme of trade policy reviews. The review will be a joint meeting of the TPRB and the GATT 1947 Council. This is the first review of Cameroon since the launching of the trade policy reviews in December 1989.

2. The WTO Trade Policy Review Body conducts a collective evaluation of the full range of trade policies and practices of each WTO member at regular periodic intervals and monitors significant trends and developments which may have an impact on the global trading system.

3. The two reports, together with a record of the Council's discussion and of the Chairman's summing up, will be published in due course as the complete trade policy review of Cameroon and will be available from the WTO Secretariat, Centre William, Rappard, 154 rue de Lausanne, 1211 Geneva 21.

4. The reports cover development in all aspects of Cameroon's trade policies, including domestic laws and regulations, the institutional framework, trade-related developments in the monetary and financial sphere, trade practices by measure and trade policies by sector. Attached are the summary observations from the Secretariat's report. Full reports will be available for journalists from the WTO Secretariat on request.

5. Since December 1989, the following reports have been completed: Argentina (1992), Australia (1989 & 1994), Austria (1992), Bangladesh (1992), Bolivia (1993), Brazil (1992), Canada (1990, 1992 & 1994), Chile (1991), Colombia (1990), Egypt (1992), the European Communities (1991 & 1993), Finland (1992), Ghana (1992), Hong Kong (1990 & 1994), Hungary (1991), Iceland (1994), India (1993), Indonesia (1991 and 1994), Japan (1990 & 1992), Kenya (1993), Korea, Rep. of (1992), Macau (1994), Malaysia (1993), Mexico (1993), Morocco (1989), New Zealand (1990), Nigeria (1991), Norway (1991), Peru (1994), the Philippines (1993), Poland (1993), Romania (1992), Senegal (1994), Singapore (1992), South Africa (1993), Sweden (1990 & 1994), Switzerland (1991), Thailand (1991), Tunisia (1994), Turkey (1994), the United States (1989, 1992 & 1994), Uruguay (1992) and Zimbabwe (1994).

The Secretariat’s report: summary Back to top

TRADE POLICY REVIEW BODY: CAMEROON
Report by the Secretariat – Summary Observations

After decades of import-substitution policies, Cameroon began opening its international trade system in the late 1980s, a process which included the introduction of new customs and fiscal régimes in January 1994. As a result, quantitative restrictions, tariff exemptions and special customs and fiscal régimes have now been eliminated or drastically reduced. With some important exceptions, exports are largely uncontrolled and most export charges are low. Cameroon's import tariffs are all ad valorem and applied in four tiers, with an average of 18.8 per cent. A new turnover tax has been introduced and progress continues in areas related to competition policy, government procurement, technical requirements and anti-dumping.

Cameroon's trade liberalization and fiscal reform are part of a larger market-oriented economic reform programme aimed at reversing a prolonged economic downslide triggered by the halving of world petroleum prices in 1986. The ensuing sharp falls in export revenue and government income required increasingly stringent internal measures to keep the overall budget deficit under control. As these measures failed to restore growth, Cameroon in concert with the other countries of the franc zone sought to restore competitiveness by devaluing the CFA franc from CFAF 50 to CFAF 100 per French franc in January 1994. The success of the devaluation in achieving a sustained higher level of exports, and thus helping to underpin stable growth, hinges in part on containing inflation so as to preserve the cost advantages derived from the devaluation. Although there were signs in late 1994 that the strategy might be working, Cameroon's process of economic reform is still fragile and inadequate investment levels remain a serious constraint to a sustained economic recovery.

Cameroon has made little use of multilateral commitments to reassure investors and other economic agents of the permanence of its new outward economic orientation. Cameroon had no tariff bindings in the pre-Uruguay Round GATT. Implementation of the Uruguay Round results will lead to only a handful of new tariff bindings for industrial products. Although Cameroon has bound all its agricultural tariffs under the Uruguay Round Agreement, the ceiling rates introduced, 80 per cent with a maximum level for "other duties and charges" of 230 per cent, are many times higher than the currently applied tariffs. The low level of multilateral commitments is of particular concern because there appear to be few institutional constraints to prevent protectionist measures creeping back into Cameroon's trading system. Deeper multilateral commitments would confirm the authorities' stated determination not to back-track on trade reform.

Cameroon in World Trade

Cameroon's service sector accounts for almost half of GDP; the agriculture and manufacturing sectors are also large, each accounting for about 22 per cent of GDP. Agriculture is particularly important as it employs about 80 per cent of Cameroon's population; manufacturing is responsible for a large share of total formal employment. Manufacturing is mostly based on the processing of indigenous agricultural products, although processing of imported materials also takes place. Among the largest manufacturing industry groups are food and beverage products, textiles, and aluminium. The informal sector is sizable and growing.

Cameroon's largest trading partner is the European Union (EU), which accounts for some 75 to 80 per cent of trade in each direction. About 30 per cent of Cameroon's exports are to France; Italy, the Netherlands, Spain and, to a lesser extent, Germany were Cameroon's other main export markets. Outside the EU, the United States is the largest market for Cameroon's exports but its importance has fallen markedly since the early 1980s. The share of Africa in Cameroon's exports is estimated at between 5 and 10 per cent, the largest markets apparently being the Central Africa Republic, Congo, Gabon, Morocco and Nigeria. By far the leading supplier to Cameroon is France, with a share of about 45 per cent; other major European suppliers include Belgium, Germany, Italy, the Netherlands and Spain. Cameroon's largest non-European suppliers are the United States and Japan; although not well documented, imports from Nigeria and Cameroon's other neighbours also appear important.

Crude petroleum accounts for about half of Cameroon's total exports, down from two-thirds in 1985. Non-petroleum exports are spread over a relatively broad range of agricultural products, the most important being bananas, cocoa, coffee, cotton, natural rubber and wood logs. The major processed export product is aluminium. Cameroon's imports are dominated by manufactured goods, which account for some three-fourths of all imports. The main imported products are chemicals (including medicines), alumina and automotive products, but a broad assortment of other products is also imported. Food imports account for slightly under 20 per cent of total imports, mainly frozen fish, flour and rice. Crude petroleum imports for the local refinery are also significant.

Trade Policy Framework

Cameroon is a bilingual, unitary state. The President is Head of State with executive responsibility for the conduct of the Republic's affairs and the negotiation and ratification of treaties. The President appoints the Prime Minister and the ministers and secretaries of state and presides the Council of Ministers. Ministries involved in the formulation and administration of trade or trade-related policies include those of Industrial and Commercial Development, Finance, Foreign Affairs, Agriculture, and Town Planning and Housing. Cameroon's legislature, the National Assembly, is a unicameral body of 180 elected members serving five-year terms.

Cameroon does not have a foreign trade law. International treaties and laws are subject to approval by the National Assembly. International accords ratified by Cameroon, including GATT, are in effect from the time they are ratified, with no implementing texts required, and take precedence over internal laws except the Constitution. Responsibility for negotiating, concluding and signing trade-related treaties and agreements is vested in the Ministry of Industrial and Commercial Development and the Ministry of Foreign Affairs.

Cameroon is a member of the Central Africa Customs and Economic Union (CACEU), whose other members are the Central African Republic, Chad, Congo, Gabon and, non-GATT party, Equatorial Guinea. The CACEU Treaty provides for a common external tariff as the main instrument for extra-regional trade policy and for a preferential duty to promote intra-regional trade. Exchange rate stability and the harmonization of monetary policies between CACEU members is ensured through their participation in the Bank of Central African States (BEAC). The Convention of Monetary Cooperation between BEAC-member countries and France provided for a fixed exchange rate between the CFA franc and the French franc.

GATT rules and obligations can be invoked in relevant matters before Cameroon's courts and GATT obligations are taken fully into account in the elaboration of trade-related domestic legislation. After independence in 1960, Cameroon applied the GATT de facto until it became a contracting party on 3 May 1963, with rights and obligations applying retroactively to 1 January 1960. Cameroon has observer status in the Tokyo Round Agreements on Government Procurement, Customs Valuation and Civil Aircraft, but has not acceded to any of the Tokyo Round Agreements and Arrangements.

Cameroon's main objectives during the Uruguay Round were to improve market access for its exports and to enhance the security of that access. Cameroon participated throughout the Uruguay Round, taking a coordinated approach with its fellow members of the CACEU in several areas, including agricultural and natural resource-based products, tariff escalation in importing countries and improved market access opportunities. The authorities were satisfied that Cameroon's objectives for the Round had been attained, although concerns linger in relation to subsidized agricultural exports and the erosion of the preference margins enjoyed by Cameroon under the Lomé Convention.

The authorities believe that no major regulatory changes are required to implement the Round's results, particularly given Cameroon's recent liberalization of its trade régime. As of 20 December 1994, the National Assembly had begun, but not yet completed, its approval of Cameroon's ratification of the World Trade Organization.

Cameroon is granted trade preferences in accordance with existing GSP schemes by developed countries and enjoys preferential access to the European Union's market under the Lomé Convention. Cameroon is a contracting party to the Global System of Trade Preferences (GSTP) among developing countries and within this system it has an agreement with Romania. Tariffs are applied on an m.f.n. basis, the only significant exception being trade with other members of the CACEU. Cameroon is party to several commodity agreements established within the United Nations Conference for Trade and Development, including the cocoa, coffee, natural rubber and tropical timber agreements.

Trade Policy Features and Trends

Recent evolution

Before 1994, Cameroon's tariff yielded relatively low revenue because of the widespread use of exemptions, made necessary to offset, in part, the strong anti-export bias inherent in the real effective appreciation of the CFA franc after 1985. The end result was an extremely complex import régime which tended to provide industries with "tailor-made" protection, to the detriment of the efficient use of resources and at a high cost to taxpayers. It also lent itself to fraud and abuse. To address these problems, Cameroon embarked on a trade liberalization programme in 1990, including a coordinated plan with the other CACEU members to reform their common external tariff which led to the adoption of new tariff and fiscal régimes in January 1994.

A new General Trade Schedule was introduced in June 1994, laying down Cameroon's trade policy after the revamping of the tariff and fiscal régimes and the CFA franc devaluation. The new Schedule seeks to consolidate Cameroon's import liberalization measures and provide a legal framework to fight illicit trade practices and unfair competition, and to continue the process of streamlining export procedures and reducing export duties to take advantage of the CFA franc devaluation and structural reforms to relaunch economic activity by recapturing export markets and diversifying exports.

Type and incidence of trade policy instruments

The new CACEU's tariff has 5,531 lines at the 8 digit HS level, applied at rates of either 5, 10, 20 or 30 per cent. Cameroon accords at least m.f.n. treatment to imports from all countries. Tariff escalation is substantial in areas such as textiles and apparel and basic metal products; in certain sectors, the pattern of escalation is unusual in that the average rate on semi-manufactured goods is significantly lower than on raw materials.

Outside the framework of the CACEU tariff, Cameroon levies a customs duty of 15 per cent on imports of petrol (super) and diesel. Other special customs and fiscal régimes, notably those accorded to public and para-public enterprises, have been eliminated or should be phased out in the near future. Tariff exemptions have been dramatically reduced and no quantitative restrictions are in force; most imports are now subject only to a declaration for statistical purposes with only certain products subject to technical endorsements. Cameroon maintains an import pre-shipment verification programme; exports from some 90 countries are subject to such programme, including all those from Cameroon's major trading partners.

Exports are largely uncontrolled. Export authorizations have been removed with only selected products subject to quality and health controls. There are no subsidies to, or quotas on exports although palm oil exports have been recently banned and Cameroon's participation in international commodity agreements does carry certain restrictions. Cameroon also imposes potentially distorting export charges on its main agricultural export products: a (tax-deductible) charge of 15 per cent on exports of cocoa, coffee, banana, cotton and medicinal plants and an exit duty of 25 per cent on wood logs. Moreover, as a general rule, only up to 30 per cent of logs may be exported without prior local transformation; from 1999, exports of logs are to be prohibited. Free zone legislation has been introduced to promote export-oriented investment.

The previously extensive system of price controls and guaranteed producer prices have been largely dismantled. The high level of state involvement in the economy has been progressively reduced, although state monopolies still include public services, petroleum, telecommunications and international shipping. Progress continues towards establishing a comprehensive legal framework in the area of standards and other technical requirements, which currently have the potential to be used as protectionist tools. Under current government procurement legislation, there is a degree of preference for local materials; no preferential treatment is given to bidders on the basis of country of origin, although credit availability appears to limit bids to certain regions. New government procurement legislation is scheduled to be introduced in 1994.

Temporary measures

Cameroon has no anti-dumping or countervailing procedures along GATT lines, although references to dumping practices are made in legislation concerning anti-competitive commercial practices. Cameroon has no domestic procedures for safeguard action nor have there been requests for import relief under such procedures. Complaints by domestic producers for relief against offending imports appear to be handled informally and through indirect measures. For example, Cameroon's final list of m.f.n. exemptions in the Uruguay Round services agreement indicates that measures concerning sharing agreements on shipping routes would be strengthened if trading partners continued to practice dumping. The authorities are of the view that Cameroon's recent trade and price liberalization have made it necessary to consider new measures to fight anti-competitive practices, including dumping, to protect consumers. As a result, measures have been introduced or are being studied affecting, inter alia, advertising, accounting practices, quality control and after-sales service.

Sectoral policy patterns

Prior to 1985, Cameroon saw import-substitution as an important element of the development process. Following the start of oil production in 1977, growing revenue from petroleum exports helped finance both agricultural support programmes and ambitious industrialization plans in an attempt to achieve self-sufficiency in both food and a range of basic manufactures. Domestic production was largely insulated from foreign competition by high tariffs and various restrictive barriers to trade. Industries were fostered whose survival depended on continuous government assistance and protection. Public and parastatal enterprises came to dominate a broad range of primary and manufacturing industries.

Since 1986, lower export revenue and government income have prompted a series of sectoral reforms. In the petroleum industry, a range of amendments to the hydrocarbons code were introduced in 1990 to encourage exploration and the industry is likely to continue playing a key rôle in Cameroon's economy for years to come. In the agricultural sector, drastic changes affecting producer prices, marketing systems and administrative bodies produced a shock from which the sector is yet to recover fully. Nevertheless, the reorientation of agriculture toward the market and the potentially competitiveness-boosting effects of the CFA franc devaluation should have placed Cameroon in a good position to exploit the opportunities that may result from the Uruguay Round. Cameroon's manufacturing sector remains the largest and most diverse in the region, with particular strengths in downstream, agro-based industries. However, the sector was severely affected by the contraction of the domestic economy and the loss of competitiveness in foreign markets. The resulting process of de-industrialization has not been halted by limited programmes of privatisation, rehabilitation or liquidation of public and para-public enterprises.

Cameroon's new industrial policies have the potential to lead again to a distorted production structure. This is particularly true of the current thrust to increase value added on an industry by industry basis and of the sector specific investment régimes now emerging. These strategies may succeed in boosting the targeted activities, but at the expense of lower value added in other industries. More importantly, the piecemeal pursuit of investment and of higher value added risks creating ventures with uncertain long-term prospects while preventing the economy from attaining, given its wealth of natural resources, its high real income potential.

Trade Policies and Trading Partners

Cameroon's comprehensive macroeconomic and structural reform programme have gone a long way towards reversing the country's previous inward-looking, anti-export policies. This reform programme, although coordinated with the other CACEU members, was undertaken autonomously. Nonetheless, measures by other countries in the multilateral context of the Uruguay Round should be a strong complement to these reforms. As Cameroon's reforms take root, exporting firms should find import barriers falling and export opportunities expanding. However, attracting substantial new investment, particularly foreign, is a precondition to exploiting fully those new opportunities.

Government report Back to top

TRADE POLICY REVIEW BODY: CAMEROON
Report by the Government

After 1960, the date of independence, Cameroon regularly enjoyed sustained economic growth, reaching a record level of 6.5 per cent in 1986 due to the good performance of the prices of primary commodities on the world market, as agriculture accounts for a large proportion of its economic activity.

The collapse of world prices in 1987 together with the fall of the American dollar greatly affected the economies of developing countries generally, and of Cameroon in particular, and led to mounting budget deficits.

The chronic budget deficits and liquidity problems gave rise to the establishment of a stabilization plan for public finances and the negotiation with the Bretton Woods Institution of a first Structural Adjustment Programme (SAP) in 1988.

Implementation of Trade Policy

An ordinance of 5 January 1995 imposed a levy (Royalties) on exports of cocoa, coffee, bananas, cotton, sugar, palm oil, rubber and medicinal plants.

The rates applied to these products are as follows: 15 per cent of the f.o.b. value for cocoa, cotton, sugar, rubber and medicinal plants; 25 per cent of the f.o.b. value for coffee; 30 per cent of the f.o.b. value for palm oil and 6,500 CFAF per tonne for bananas.

In parallel, an inspection and control tax on exports of primary commodities was established. It is applied to cocoa, coffee, medicinal plants, timber, palm oil and bananas.The rate of this tax is 0.95 per cent of the f.o.b. value of exported products.

These measures stem from the Government's concern to stabilize the economy by guaranteeing supplies of raw materials to local factories. However, as they are not subsidized, exports of semi-finished and finished products are not subject to any customs duty or charge. In order to permit the development of trade flows within the Central African sub-region, a programme of creating frontier markets has been launched with a view to the creation of five frontier markets. Only one, on the frontier with the Gabon Republic, is so far in operation. On the financing side, it has just been decided that the cost of borrowing and access to credit will be significantly eased.

Imports

The general trade programme represents the culmination of the liberalization process which has been underway since 1989. Its key objective is to restore competitiveness, and it contains significant import liberalization measures, mainly the total elimination of quantitative restrictions and the abolition of import licences. Meanwhile, particular emphasis has been placed on meeting quality standards both for local and imported products. Unfortunately, standardization in Cameroon is still embryonic and unregulated so that the application of standards and the certification of products present practical difficulties. In the absence of an appropriate body responsible for certifying that products conform to national standards and for granting the right to use the national emblem, certification is almost non-existent.

Nevertheless, measures have been taken to introduce such a system. In the meanwhile, no reference is made to standards except in cases where a product is suspected of being or is declared dangerous. Then the authorities concerned take the necessary measures to control its import and sale within the country. Cameroon does not use standards as a protectionist measure for imported products, since it chose to liberalize its economy to make it more competitive and increase its exports. It should be said that there is no internal procedure concerning safeguards, given that there has not been any request for protection against imports under these procedures.

The Government has never taken selective measures targeting a product from any country. Likewise, there have been no requests by the Cameroon Government for protection against imports in the framework of a bilateral or regional agreement.

Investment policies

By encouraging export-oriented industrial enterprises in particular, these policies are undeniably a factor in trade promotion. With the introduction of the fiscal and customs reform in the CACEU, customs concessions which had previously been granted to enterprises enjoying privileges under the Investment Code, except those in the Industrial-Free Zone, were abolished. Nevertheless, industrial plant and raw materials are subject to a reduced customs duty of ten per cent. Equipment is exempt from turnover tax, while there are deductions for raw materials.

Concessions related to the installation phase include exemption from: registration duties; capital transfer duties; tax on allocation of credits; the minium flat-rate tax; the special companies tax; the special registration tax and a reduction of 50 per cent of the companies tax from the first year when it is payable.

Concessions related to the production phase include exemption from the minimum flat-rate tax and the special companies tax, 50 per cent of companies tax, 50 per cent of the proportional tax on income from investments and the carrying forward of the loss resulting from depreciation charges normally written off during the first three accounting periods for the following five accounting periods.

In addition to the above-mentioned concessions, the investment code contains other incentives:

- National treatment for foreigners, subject to compliance with legal and regulatory provisions, as well as with treaties and agreements concluded by Cameroon with the States of which they are nationals;

- the right to transfer revenue of any kind arising from capital invested and, on cessation of activities, the proceedings of liquidation or transfer of the investment, subject to the enterprise having settled its liabilities with the tax authorities;

- freedom to hire and dismiss staff in compliance with current social and employment legislation;

- for partners of enterprises regularly established in Cameroon freedom of movement of their staff holding a duly certified contract of employment, and their legal families. A single window system is in operation, to provide investors with all the services which they require from the Administration.

Industrial-free zone regime

This is reserved for essentially export-oriented enterprises which are exempt from all direct and indirect taxes, except for tax on industrial and trading profits to which they are liable from the eleventh year of operation at a reduced rate of 15 per cent.

A "single window" has been opened for this category of enterprises to provide them with all the services they require from the administration.

Customs measures

For customs matters, Cameroon applies the CACEU tariff which is based on the fiscal and customs reform adopted by the CACEU. There are thus four categories of import products. The following table lists the customs duties applicable to these various categories:

Category Description Common trade tariff after devaluation

I Products of basic necessity 5%

II Raw materials and capital goods 10%

III Intermediary goods and miscellaneous 20%

IV Ordinary consumer goods 30%

Apart from the common trade tariff, other internal taxes are applied to imports:

Generalized preferential tariff 0%;

turnover tax 5.5% and 16.5%;

excise duty 25%.

A generalized preferential tariff is applied to inter-regional trade (CACEU).

International macro-economic situation affecting the external sector

Devaluation of the CFA franc

The monetary adjustment decided on 12 January 1994 gave rise to:

- An increase in the price of locally manufactured products, because of the large content of imported inputs whose cost rose despite a fall in volume;

- stagnation of agricultural exports owing to the shift of labour to other sectors as a result of the fall in world prices, the subsequent fall in production and the low price elasticity in relation to demand;

- an even lower level of food exports, despite improvements in production: substitution of imports due to imported inflation led to a further reduction of the proportion destined for export.

Although the devaluation of the CFA franc had adverse effects in the very short term (inflation, fall in incomes, hardship) its positive impact on the national economy will be measured in the medium term by improved competitiveness and the revival of exports, and in the long term by industrial expansion.

Problems faced on the external market

There are three types of problems relating to the lack of competitiveness of our export products on the external market: the first is poor packaging, high production costs and irregularity of supply.

The second concerns the sudden opening up of the market, a logical consequence of membership of regional or sub-regional groups, the entry into force of the WTO and the liberalization measures prescribed in the context of structural adjustment programmes, including tariff and non-tariff barriers, notably those related to rules of origin and standards for packaging, quality and sizes.

The third relates to the much more demanding rules introduced by the European Union, our primary partner. The rules could have a more negative impact than customs duties and other non-tariff measures on Cameroon exports. The Cameroon Government intends to introduce as a matter of priority a standardization body responsible for developing and implementing a policy which complies with the relevant international rules. Back to top