Economy of Cameroon

Exports and Imports

Cameroon's economy is heavily reliant on oil exports, though diversification efforts are ongoing. Key exports include crude oil ($8.2 billion in 2023 estimate), timber ($2.1 billion), cocoa ($1.7 billion), and coffee ($1.3 billion). Major import partners include China ($4.8 billion), France ($3.1 billion), and Nigeria ($2.5 billion) [focus-economics.com]. While rising oil prices have boosted export earnings, imports often outpace them, leading to a persistent trade deficit.

Infrastructure Development

Infrastructure development is a pressing need for Cameroon. The total road network exceeds 78,000 kilometers, but a significant portion requires upgrading. Investments are underway in other areas like railways, ports (particularly Douala), and power generation, with a focus on harnessing hydropower potential.

Monetary Policy

Cameroon belongs to the Central African Economic and Monetary Community (CEMAC). The Bank of Central African States (BEAC) sets monetary policy for the entire zone. As of May 2024, the key interest rate is set at 2.0% [BEAC website], with the primary goals being inflation control and maintaining the stability of the CFA Franc, which is pegged to the Euro.

Trade Agreements

Cameroon benefits from trade agreements within CEMAC and with the European Union. These agreements offer preferential access to regional and European markets, promoting exports and attracting foreign investment.

Tax system

Capital gains tax: Capital gains in Cameroon are taxed at the marginal income tax rate, which ranges from 10% to 35%.
Corporate tax rate: The standard corporate tax rate in Cameroon is 30%. However, there are reductions for certain company sizes and sectors: (i) Companies with a turnover below XAF 3 billion (around $5.4 million) may benefit from a reduced rate of 28%. (ii) Companies listed on the Central African Stock Exchange may qualify for a further reduced rate of 25%.
Sales tax (VAT): Cameroon has a Value Added Tax (VAT) system with a standard rate of 19.25%. Certain essential goods and services may have a reduced VAT rate.
Property tax: Property tax rates in Cameroon vary depending on location and property type. Generally, they are considered low, ranging from 0.1% to 0.5% of the property's value.
Payroll tax: Cameroon has a social security contribution system funded by both employers and employees. The total contribution rate is around 10.6%, split between the two parties.
Tax deductions and credits: Limited tax deductions and credits are available in Cameroon. Businesses may deduct some expenses related to their operations, while individuals may have deductions for specific circumstances.
Tax compliance: Tax compliance in Cameroon is improving, but challenges remain. The government is implementing measures to broaden the tax base and improve tax administration.
Tax burden: The overall tax burden in Cameroon is considered moderate for individuals and businesses. The reduced corporate tax rate for smaller companies, along with generally low property taxes, contribute to this. However, the government seeks to increase tax revenue to support development projects.