At the dawn of the global
recession, experts predicted Africa would be
spared the first-round effects. But it's been hit earlier than expected. Cameroon has already reported
slumps in both growth and GDP. Thousands of jobs have been lost, as have
billions in earnings for exporters. The government is enacting tax cuts and
redefining its policies to withstand the world's worst economic crisis since
1929. From Douala, Cameroon,
Ntaryike Divine, Jr., has the story.
The Cameroon Chamber of Commerce says 40 companies
in the commodity exports sector have lost a total of about 630 million US
dollars in revenue as a result of the global economic downturn. The information
comes from a survey it conducted recently.
Some 3,500 jobs have been frozen and 10,000 others
are at risk in the timber, aluminum, cotton, rubber sectors and in transport
related to those commodities
Experts predict the banana industry and tourism will
They say Cameroon is again at risk of countrywide
social unrest if these problems lead to extensive hardship. Rising living costs
sparked nationwide riots last year. The government said 40 people died but
human rights watchdogs claimed over a hundred were killed by government troops.
six-member Central African Economic and Monetary
Community, CEMAC. A recent IMF delegation has projected a growth slowdown to
one percent – down from 3.8 expected when the country's budget was passed last
Prime Minister Ephriam Inoni says the country is at
He says Cameroon will witness deficits in its trade
balance which will also mean a one percent drop in its GDP. He says revenues for public infrastructure development will also
take a big hit until the end of the current fiscal year and perhaps up to 2010.
Under instructions from President Paul Biya, Prime
MinisterInoni has set up a think-tank made up of some of the country's
finest economists. The group says Cameroon must redefine its economic
policies in the short and long terms to withstand the recession. It has
suggested a number of steps, including more infrastructure development,
increased investment in agricultural production and incentives for both local
and foreign investors.
The government is taking urgent steps to cushion the
impacts of the crisis and save some of the worst-hit sectors from collapse.
Essimi Menye is Cameroon's minister of finance.
He says the government has reduced taxes, notably in
the timber sector. There are also plans to encourage consumption by eliminating
the value added tax for all wood products sold locally. More measures are in
the pipeline. He says external demand for exports like rubber and timber has
continued to plunge and have even disappeared in some sectors.
Just before the crisis, Cameroon's economy was said to be on the way to a period of robust growth. The government had targeted over 10
billion US dollars in new mining projects, designed blueprints to develop its
huge hydroelectricity potential and increased investments in agro-production.
But those projects now appear in jeopardy. Most have
been delayed or scaled back, diminishing prospects of employment and poverty
alleviation for thousands.
Meantime, experts say Cameroon's
unexploited natural resources provide a wealth of potential. But they say a
combination of bad governance, corruption, graft, and lack of foresight has
stalled growth and increased debt. The U.S. Central Intelligence Agency says Cameroon,
with an estimated 18 million inhabitants, has one of the best-endowed commodity
markets. But it notes that only 10
percent of the roads are paved and unemployment is over 30 percent.
The IMF initially projected growth rate of more than
six percent in sub-Saharan Africa this
year. But it has now cut the figure to 3.25 percent. It has pledged to help Africa survive the crisis amid tighter conditions for
But the IMF says Cameroon must make a number of
improvements, including increasing its energy supply, improving infrastructure,
perking up its weak business environment and ensuring better governance.