The African Development Bank published its 2018 Africa Economic Outlook on, January 17, predicting favourable results from recent budgetary and structural reforms in Cameroon.
The 2018 financial year kicked off on a good footing, if one is to go by Cameroon’s economic outlook published on January 17 by the African Development Bank (AfDB).
The outlook is part of the 2018 edition of the African Economic Outlook (AEO) which according to the bank provides short-to-medium term forecasts on the evolution of macroeconomic indicators for all African countries, as well as analysis on the state of socio-economic challenges and progress made.
Going by the document, Cameroon’s outlook “remains positive with growth projected at 4.1% in 2018 and 4.8% in 2019.” The growth, it said, will be spurred by higher exports to the European Union facilitated by the Economic Partnership Agreement and increased energy supply from new hydroelectric dams. It also forecasts that forestry and agro-industrial value chains, and a reduction in imports in favor of local products will equally boost the economy.
About Cameroon’s Extended Credit Facility with the International Monetary Fund, the AfDB said the programme will enable macroeconomic stability in the medium term. Public investment trends showed a drop from roughly 8% of GDP in 2016 to 6.7% in 2017 and 6.6% in 2019; but then, the bank projected government revenues to rise to 18.16% next year.
The fiscal consolidation under the Extended Credit Facility with the IMF and the structural reform agreements with financial and technical partners, including the World Bank, according to the economic outlook, will allow authorities to increase the effectiveness and efficiency of public investment through a better project maturity framework. Efforts will focus on collecting higher fiscal revenues to offset the decline in oil revenues and customs duties brought about by the EPA.
The bank also made a series of proposals to bolster economic growth, which suggestions tie with reforms already embedded in the 2018 budget. This include suggestions that the state should increase efforts to expand the country’s non-oil revenue base and better prioritize spending while preserving social spending.
It also suggested in the outlook, that to maintain debt sustainability, new non concessional borrowing should be reserved for projects with a high social or growth impact, in industries and sectors with clear competitive potential.
It however posited Cameroon would have more options for adjusting to negative shocks and ensuring external competitiveness, if it were not tied to the CEMAC monetary community. The bank also suggested an increase in spending on security owed to security threats from Boko Haram, rebel groups in CAR, and crisis in the North West and South West regions.