(Business in Cameroon) - For 2022, Cameroon projects a 2% inflation rate, down from 2.4% in 2021. The forecast is contained in the 2022 draft budget presented by Finance Minister Louis Paul Motaze during the special November 8, 2021, ministerial council. The 2% inflation rate projected is “below the 3% threshold in the CEMAC region,” Minister Motaze commented.
According to the official, this result will be achieved thanks to the continued application of measures taken by the government to control prices, the improvement of the local supply of consumer products, and the reorganization of the domestic market.
Some observers of the Cameroonian economic sphere think this projection is unrealistic for at least two reasons. The first reason listed is that despite its relative diversification compared to its CEMAC neighbors, Cameroon's economy still depends on imports. The local supply of consumer goods such as rice, fish, sugar, milk, palm oil, etc. is insufficient, forcing the country to disburse hundreds of billion of XAF to export those products to meet the demand. Therefore, the local supply mentioned by the government will possibly have no impact on inflation.
Secondly, they believe, the lower inflation projected by the government comes in a context marked by unprecedented inflationary pressures on the international market where the country sources almost everything to fill the gap between its local supply and demand.
In some sectors, in addition to soaring raw material prices, freight costs have shot up substantially, up by 400% in some cases. That context significantly impacted production costs (the factor gat price index rose by 3.8% in the second quarter of 2021 according to the National Institute of Statistics) paving the way for speculation in local markets.