For a quarter century following independence, Cameroon was one of the most prosperous countries in Africa. The drop in commodity prices for its principal exports -- oil, cocoa, coffee, and cotton -- in the mid-1980s, combined with an overvalued currency and economic mismanagement, led to a decade-long recession. Real per capita GDP fell by more than 60% from 1986 to 1994. The current account and fiscal deficits widened, and foreign debt grew.

The government embarked upon a series of economic reform programs supported by the World Bank and IMF beginning in the late 1980s. Many of these measures have been painful; the government slashed civil service salaries by 65% in 1993. The CFA franc -- the common currency of Cameroon and 13 other African states -- was devalued by 50% in January 1994. The government failed to meet the conditions of the first four IMF programs.

In December 2000, the IMF approved a 3-yr. Enhanced Structural Adjustment Facility (ESAF) program worth USD 133.7 million to reduce poverty and improve social services. The successful completion of the program will allow Cameroon to receive USD 2 billion in debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative. Pursuant to the initiative, the IMF is requiring the Cameroonian government to enhance its macroeconomic planning and financial accountability; continue efforts to privatize the remaining non-financial parastatal enterprises; increase price competition in the banking sector; improve the judicial system; and implement good governance practices.

Recent joint IMF/World Bank review missions have favorably remarked on Cameroon's implementation of the ESAF program. More than halfway completed, the program's sound macroeconomic management and market-oriented reforms have led to strong growth, low inflation and contained budget deficits. In late August 2003, the Board of Directors of both the IMF and World Bank approved Cameroon's Poverty Reduction Strategy Paper (PRSP) with high marks. The Paper integrates the main points of the Millennium Development Goal which outlined Cameroon's priorities in alleviating poverty and undertaking strong macroeconomic commitments in the short- and long-term.

The privatization program has lagged because of legal and political obstacles; difficult negotiations with the government on issues such as sale price, financial disclosure, tax arrears and overlapping debts; and in some cases, a lack of willing buyers.

France is Cameroon's main trading partner and source of private investment and foreign aid. Cameroon has a bilateral investment treaty with the United States. In addition to existing investment in the oil sector, U.S. investment in Cameroon, estimated at over USD 1 million, is progressively growing due primarily to both construction of the Chad-Cameroon pipeline and cobalt and nickel mining.
For further information on Cameroon's economic trends, trade, or investment climate, contact the International Trade Administration, U. S. Department of Commerce, Washington, D.C. 20230 and/or the Commerce Department district office in any local federal building.