(Business in Cameroon) - Despite its increasingly diversified economy, Cameroon will be the country to contribute the lowest export revenues in the CEMAC region this year. This is revealed in a recent report published by the Bank of Central African States (BEAC). The highest export revenues on the three main commodities exported by the region will be recorded by other member countries we learn.
For instance, Cameroon is expected to be the fourth-largest oil producer in the region in 2021, with 3.7 million tons produced against a little over 14 million tons for Congo, which will then be the leading oil producer in the CEMAC region. Despite the expected rise in Cameroon’s natural gas production, the country will be the second producer with 1.42 million tons produced. Also, it will be the third leading raw and sawn timber producer with a total of 2.6 million metric cubes produced.
For the 2021 financial year, Cameroon’s export revenues are expected to rise by 18.2% but, that increase will be less than those of Chad (+35.7%), Equatorial Guinea (+34.9%), Gabon (+31.1%), and Congo (+18.4%).
With the rise in its exports, Cameroon will reduce its trade deficit. According to the BEAC, that deficit would be XAF512.1 billion. This would be better than the XAF637.3 billion deficit recorded in 2020. However, countries like Congo, Gabon, and Equatorial Guinea will fare better with trade surpluses projected to reach XAF2,207, XAF1,737, and XAF1,035 billion respectively.
This situation of Cameroon not being among the leading export revenues contributors in the CEMAC region is not a novelty. According to data compiled by Business in Cameroon, the country is the fourth leading export revenue contributor in the CEMAC region.
From mirror data from the International Trade Center (provided by partner countries), between 2011 and 2020, the country exported $49 billion worth of goods, compared to $92 billion for Congo, $87.6 billion for Equatorial Guinea, and $80 billion for Gabon.
The main question is how this situation will impact CEMAC countries’ net foreign assets (NEA) this year. As of end-2020, with XAF2,336 billion out of XAF1,876 billion (Chad and Equatorial Guinea have negative NEA), Cameroon was the country will the largest share of those financial assets. However, a significant portion of those assets was made up of external borrowings.
For countries whose currency is pegged to a reference currency (the Euro in the case of CEMAC countries), healthy exports are important to reduce budget imbalance risks and avert devaluation threats. Cameroonian authorities have always pointed out the advantage of their diversified economy. Truly, that diversification helped the country stabilize its export revenues between 2011 and 2020, which were divided by just 1.4, compared to a country like Equatorial Guinea whose exports were divided by 5 over the same period.
However, it appears that since its independence days, Cameroon’s diversification has been focused on the same group of products, except for natural gas, which it started exporting recently. And for various reasons, the country is recording dropping production volumes in those product groups. Nevertheless, the timber sector is well off but because of its inability to control operators, the country is recording important revenue shortfalls, according to civil society organizations like the CRADEC and the CED.