Decline in oil production slows Cameroon’s growth

Cameroon’s economic growth continues to slow due to weaker activity in the oil sector, but its outlook is positive, with a gradual rebound starting in 2018, according to an International Monetary Fund (IMF) staff team that visited the country.

“Growth in 2017 is projected to continue to decelerate to slightly under the initial projection of 4 percent, mainly owing to the continued decline in oil production and delays in the start of operations of the new natural gas field,” remarked IMF team leader Corinne Deléchat.

Ms. Deléchat noted that Cameroon’s non-oil growth was supported by strong industrial production owing to improved energy supply and by a good performance of the primary sector; though other indicators such as private sector credit and tax revenue indicated weaker activity.

“The economic outlook for 2018 is positive, albeit subject to downside risks. Growth should improve to about 4.2 percent, due to the entry into production of the new offshore natural gas platform,” said Ms. Deléchat. “In the medium term, growth should gradually increase further to 5-5½ percent as key infrastructure projects are completed, including hydroelectrical power plants, the deep-sea port and roads.”

Also, the IMF team observed that construction related to the 2019 African Cup of Nations tournament should positively contribute to activity, albeit temporarily.

The team cautioned that external and domestic risks to this outlook include the possibility of a new round of lower commodity prices notably oil, cocoa and coffee, a resurgence of security challenges, and further delays in the coming on stream of large infrastructure projects.

In June, the IMF approved a three-year arrangement under the ECF with Cameroon for about US$666 million (175 percent of Cameroon’s IMF quota) to support the country’s economic and financial reforms.