Cameroon Infrastructure Report Q3 2012

BMI View: With the government currently prioritising infrastructure investment as part of a ten-year economic plan, we see Cameroon as one of the most prospective markets in West Africa for infrastructure investments along with Ghana. With oil prices forecasted to be the highest in recent years the government will have the funds to set in motion its ambitious infrastructure plan. Chinese funding will remain dominant for mega-projects, though smaller multilateral assistance is also accelerating projects, especially in power.

The key factors driving our optimistic outlook are:

The cabinet has identified infrastructure expenditure as a key policy area. The government's policy is based on meeting targets outlined in the 'Growth and Employment Strategy' which aims to average 5.5% GDP growth per year over the 2010-2020 period, as well as cutting poverty rates from 39.9% to less than 28%. This government strategy has seen the commencement and acceleration of major infrastructure projects, including the Lom Pangar and Memve'ele dams as well as the Kribi deep sea port.

Power projects have dominated developments in infrastructure over the first quarter of 2012, with three power projects moving through the development phases.

A first XFO10bn (US$20mn) infrastructure-bond issued in February 2012 was oversubscribed according to the finance ministry, which is planning to issue a total of XFO285bn (US$557mn) worth of treasury bonds in 2012 to fund projects in infrastructure.

An upward revision in the historical data for the construction industry value in Cameroon has taken our forecasts slightly higher for 2012, from XOF458bn (US$940mn) to XOF501bn (US$985mn).

Following the October 2011 elections that saw incumbent President Biya re-elected for another seven-year term, we anticipate that his government’s infrastructure-geared economic plan will proceed at a rapid pace. As such, our forecasts to 2015 reflect a period of high growth for Cameroon’s construction sector.