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Cameroon Hit by Global Economic Crisis 


The World Bank says the global economic crisis is hurting Africa by slowing outside investment, depressing prices for commodity exports and slashing remittances from Africans working abroad. In Cameroon, more than 3,000 people have lost their jobs, and the Chamber of Commerce says another 10,000 are at risk.

Cameroon's timber industry has been hardest hit by the global economic slowdown. The Chamber of Commerce estimates losses of more than $300 million, with further declines likely the longer world demand for hardwoods remains slack.

Timber industry declines more than 200,000 tons

Timber exports last year fell by more than 200,000 tons. Raw material exporters of aluminum and rubber have joined timber firms in slashing jobs and scaling back production.

Olivier Behle is president of the employers union of Cameroon. He wants more direct financial support from the government for industrial sectors at risk, tax breaks for the hardest-hit companies, and easier access to credit.

Behle says the union is tracking the decline and is working with both the public and private sectors to cushion its impact so businesses are prepared to resume full-scale production once conditions improve.

Behle says hundreds of Cameroonian firms are at risk of collapse. So far, the Chamber of Commerce says 40 firms it has surveyed have already lost more than $600million.

President says reduced taxes will hurt economic growth

President Paul Biya says because the drop in commodity prices are depressing the volume of exports, Cameroon can expect lower tax and customs revenues, which will make it more difficult to pursue ongoing efforts to revive economic growth.

Increasing unemployment means less discretionary income, so people who make their living producing non-essential decorative items are some of the first to see sales fall.

"The economic crunch is hitting the sector and hitting it badly," said Peter Abong, who works with the crafts section of the Chamber of Commerce. "The majority of the things are decorative items. People buy them to decorate their homes. People buy these articles to give as gifts to others. And it follows that when there is a crisis, you see these type of goods are the first to be dumped aside. People will go for the basics like food and shelter."

Abong says weathering the economic downturn requires a unified response across all sectors of Cameroonian society.

"It is not just a matter of one person" added Abong. "You see it involves so many actors: the government, the private sector, the individuals."

Cameroon to cooperate with other countries to overcome economic hardship

Cameroon's Forestry and Wildlife Minister Elvis Ngolle Ngolle says the government is working with other members of the Central African Economic and Monetary Community to make sure they respond to the financial crisis in unison.

"We have a more of less integrated approach to responding to the world financial crisis," said Ngolle Ngolle. "That is why we are taking part in this sub-regional meeting which is designed to ensure that all the countries of the subregion see things the same way and react in the same manner to ensure that the economies of the subregion are protected in the same manner. After all, we are part and parcel of a global economy and by definition a subregional economy. We want to make sure that what is good for Cameroon is good for all the others in the subregion."

The Bank of Central African States forecasts last year's 5% growth will drop to 3% this year across the economic zone linking Cameroon with Chad, the Central African Republic, Congo, Gabon, and Equatorial Guinea. The regional bank blames the drop largely on falling prices for raw material exports.

That has led officials from the Central African alliance to again call for member states to lessen their dependence on raw materials and diversify their economies with greater investments in agriculture and small-scale enterprise.

Because the Central African Franc is linked to the French Treasury, the value of the regional currency has held stable. But alliance officials are warning that as traditional international donors prop up their own economies with tax breaks and corporate bailouts, the amount of money left to help the rest of the world will surely decline.

Top finance official doubts help will continue

Essimi Menye, Cameroon's Finance Minister, says European nations are helping Cameroon. But he questions whether they will continue to have the available resources to meet earlier promises to increase that assistance.

He says other friendly countries, including China, have made money available and, at present, Cameroon has no other choice but to continue acquiring debt. Menye says the Biya government recognizes that taking on additional debt raises the risk of falling farther into economic distress if that debt becomes unmanageable. But he says Cameroon must make the best use of what money is available and must make sure that money is well spent.

"We have a more of less integrated approach to responding to the world financial crisis. That is why we are taking part in this sub-regional meeting which is designed to ensure that all the countries of the subregion see things the same way and react in the same manner to ensure that the economies of the subregion are protected in the same manner," he said. "After all, we are part and parcel of a global economy and by definition a subregional economy. We want to make sure that what is good for Cameroon is good for all the others in the subregion."

The Bank of Central African States forecasts last year's 5% growth will drop to 3% this year across the economic zone linking Cameroon with Chad, the Central African Republic, Congo, Gabon, and Equatorial Guinea. The regional bank blames the drop largely on falling prices for raw material exports.

That has led officials from the Central African alliance to again call for member states to lessen their dependence on raw materials and diversify their economies with greater investments in agriculture and small-scale enterprise.

Because the Central African Franc is linked to the French Treasury, the value of the regional currency has held stable. But alliance officials are warning that as traditional international donors prop up their own economies with tax breaks and corporate bailouts, the amount of money left to help the rest of the world will surely decline.


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