Multi-pronged strategy to beat Covid-induced slump.

AuthorFord, Neil

In the third part of our Special Country Focus on Cameroon, we examine the government's strategy to repair the economy, which has been adversely affected by the ramifications of Covid-19. We also look at measures taken to mitigate the loss of income for farmers and finally, report on progress towards mining bauxite for export. Report compiled by Neil Ford.

As elsewhere in the world, in Cameroon the Covid-19 crisis and associated lockdown have had a huge impact on government finances and unemployment, particularly in the informal sector. In order to counter the downturn, Yaounde has announced plans to get the economy back on its feet: both in the short term through financial support for businesses, and longer term by strengthening trade with the rest of the world.

The consumption of most commodities fell sharply in the second quarter of this year, so demand for Cameroon's main three exports--cocoa, oil and timber--has been greatly depressed. Research carried out by Cameroon's National Institute of Statistics in Douala and Yaounde concluded that the construction, hotel, catering, forestry and education sectors had been hardest hit, with about half of all people losing their jobs, particularly those freelance, part-time and employed by small companies or in the informal sector.

Governments around the world have adopted different strategies to ensure that their economies rebound as quickly as possible. Yaounde has introduced VAT credits to support struggling businesses and suspended many business levies.

However, it has been far harder to reach the rural poor and those in the informal sector, who together make up the vast majority of the population. Indeed, the informal sector is estimated to be about the same size as the formal economy, with some sources claiming that up to 90% of Cameroonians are employed in the sector.

Import substitution

Plans for an import substitution programme have been drawn up by the Ministry of Finance to boost local businesses in the immediate future and strengthen the economy in the longer term.

As we discuss on page 30, the closure of borders across West and Central Africa has prevented a great deal of cross-border trade in foodstuffs and agricultural commodities, forcing Cameroon to become more self-sufficient. For instance, the government is keen to turn more of the country's large tomato crop into tomato puree, either for domestic consumption, or, longer term, for export.

In order to reduce the national import...

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