04/10/2016
Evolution of the Economic Growth of Cameroon
The aim of this article is to present the trend of the fluctuation in the macroeconomic performance of Cameroon in terms of economic growth because it shows the performance of the economy in terms of the production of goods and services as.
as shown on the time series graph
The economic situation of Cameroon from 1980 to 1986 was booming but with decreasing real GDP growth rate averagely 9.1% growth rate while inflation rate was high with an average rate of 11.1% this was mainly as a result of petroleum production which contributed to economic and social development as oil revenue was from exportation provided the necessary finance to sustain economic growth.
Economic crises began in Cameroon in 1987 where the economy fell into recession with a sharp fall in real GDP to -2.15 per cent. The economic crisis actually began in 1985 in Cameroon with the depreciation of the US dollar which significantly hindered the trade of the country. In addition, the combination of a fall in the prices of its primary products (especially oil) and main commodities (coffee and cocoa) led to a considerable deterioration of the economy during 1987-1990, which was averaging -4.49% and the rate of non-performing loan was very high. Faced with this situation, the Cameroon government introduced a number of structural programmes in order to initiate economic recovery by restoring the economy internally and externally in the view to ensure sustainable and equitable growth and also with a sectorial aim to maintain macroeconomic balance. However, this turned out to be insufficient to stem the economic crisis.
From 1991 to 1994 the economy stated recovering where the real GDP improved slightly, yet still negative averaging -2.00 percent. One of the major problems in the country was the persistence of an overvalued exchange rate. Aware of the failure of previous programmes and the efforts undertaken to correct the price distortions caused by export subsidies and import duties, Cameroon and the other CFA zone countries decided, in January 1994, to devalue their currency.
The phase of return to growth began in Cameroon where the economy entered into the expansion stage and started witnessing positive growth again in 1995. After the devaluation of the franc (CFA) in 1994 and complementary macroeconomic and structural reforms since then have contributed to output growth between 1995 and 1997.
Thus, in Cameroon, from 1995, the real GDP grew from 4.12 in 1995 to 5.31 in 1997, before becoming weak from 1998 to 2008 with an average growth rate of 3.8% while, the fiscal situation deteriorate in 2001, mostly due to past payment obligation, overruns on current expenditures and rise in cost of fuel subsidy. This slowing down of the real GDP of the country might be explained by slow response of Cameroon exports to take advantage of the devaluation opportunities.
With the presence of the global economic crises, the impact was felt in Cameroon in terms of real GDP growth in 2009 where the real GDP fell further from 2.9% in 2008 to 1.9% in 2009. The economy started recovering again from the global economic crises in 2010 where the real GDP rate increased continuously from 3.3% to 5% in 2013 making average of 4.3%. According to an IMF report economic growth in Cameroon is expected to increase gradually to 5.5% by 2016. This will be as a result of projected increase in oil production, ongoing public programs and an initiative to improve the business climate, but the country has not ground enough to stimulate economic activities that will remove the NPL from the double digit.
