(Business in Cameroon) - Cameroon is planning to pump part of the next budget support granted by the European Union to develop agricultural value chains, especially cotton.
Amount to be injected is yet to be known since both parties are still negotiating the total EU support but sources said monies will be granted without any direct return or payment for the period 2020-21.
Cameroon aims to attract a maximum of investments in the sector through loans and grants blending mechanisms. In this wake, the European Investment Bank and the EU delegation in Cameroon organized May 8, 2019, in Yaoundé a forum on cotton sector. The meeting gathered, apart from the government, technical and financial partners, local banks and sector players (growers’ association, Sodecoton, Cicam etc).
Cotton needs XAF60 billion
In the short-term, needs are valued at XAF60 billion. The Cotton Development Corporation (Sodecoton) expressed need of XAF40 billion to increase production from 300,000 tons in 2018 to 400,000 tons in 2022, as planned in its recovery plan.
The company 59%- owned by the government plans two ginning plants (XAF15 billion), a new oil mill (XAF20 billion) and a solar plant (XAF3 billion). Remaining XAF2 billion will strengthen site supervision teams.
Cotonnière industrielle du Cameroun (Cicam) expressed need of about XAF20 billion to cushion past two years’ decline with a view of processing 7,000 tons of cotton-seeds.
Cotton is a major driver of the economy in Cameroon’s northern regions which record highest poverty rate in the country. The fiber is grown over 85,000 km2 and directly sustains 2 million people in the region. Cotton provides 2.5% of Cameroon’s GDP and 5% of the agriculture GDP. It accounts for 4% of overall exports, 15% of agricultural exports and generates XAF30-40 billion per annum. These are all assets that make it attractive to the EU.
During the 5th AU-EU summit held in November 2017 in Abidjan, Côte d’Ivoire, Belgium committed to help limit massive illegal youth migration to Europe. Main focus was placed on poverty and unemployment.