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Cameroon Country Risk Report Q2 2018

Cameroon Country Risk Report Q2 2018

Executive Summary

Core Views

Increasing gas output will provide significant tailwinds to Cameroon's economy over the coming quarters. This will offset some of the head- winds posed by weaker public investment and increased political instability.
Cameroon's fiscal situation is set to improve in the coming years, largely owing to increasing revenues from the oil and gas sector. Meanwhile, a new deal signed with the IMF is also likely to limit the scope for expanding recurrent expenditure. As such, we expect debt levels to remain sustainable over our long-term outlook.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Gas Production Will Offset Political Headwinds To Growth
Increasing gas output will offer significant tailwinds to Cameroon's economy over the coming quarters. This will offset some of the
headwinds posed by weaker public investment and increased political instability.
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
External Trade And Investment Outlook
Investment And Export Opportunities Advantageous To External Position
Capital spending in Cameroon will keep the import bill elevated over the coming years, meaning the current account will remain in
deficit. However, this will be sustainable owing to strong foreign direct investment and increasing export proceeds from incoming gas
production.
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
Monetary Policy
Peg Guarantees Benign Inflation Outlook
We believe that Cameroon's long-term outlook will be benign thanks to its membership of the Communauté Économique et Monétaire
de l'Afrique Centrale (CEMAC) monetary union. A pegged currency (the Central African franc) backed by the French treasury, will shield
consumers from potential currency weakness leading to inflation.
TABLE: MONETARY POLICY FORECASTS
Fiscal Policy And Public Debt Outlook
Improving Commodity Prices Will Boost Fiscal Outlook
Cameroon's fiscal credentials are set to improve in the coming years, largely owing to increasing revenues from the oil and gas sector.
Meanwhile, a new deal signed with the IMF is also likely to limit the scope for expanding recurrent expenditure, and as such, we expect
debt levels to remain sustainable over our long-term outlook.
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Chapter 2: 10-Year Forecast
The Cameroon Economy To 2027
Trend Growth To Remain Strong
Economic growth in Cameroon will quicken in the coming years due to strong fixed investment, government consumption and a stable
currency, despite a weaker oil outlook. Private consumption, agricultural output, and capital investment will lift real GDP growth to an
average of 5.4% between 2018 and 2027.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Risks To Biya's Status Quo Rising
Political developments in Cameroon in the coming months pose significant risks to President Paul Biya's rule. A more consolidated
opposition could potentially unseat Biya, while increasing violence and use of military has seen the unlikely risk of secession rise.
Long-Term Political Outlook
Presidential Succession And Terrorism Will Pose Headwinds
Cameroon faces a number of challenges to its stability over our 10-year forecast period. President Paul Biya's likely departure from
office after a 34-year rule, coupled with high economic inequality, suggests that we could see a swing in policy. Meanwhile, the security
environment could deteriorate in the face of increased activity by Isl amist militants in the north of the country.
Chapter 4: Operational Risk
Operational Risk
TABLE: OPERATIONAL RISK
Conflict Risk
TABLE: MAIN ACTIVE TERROR GROUPS
TABLE: POLITICAL VIOLENCE RISK
TABLE: MAJOR CONFLICT FLASHPOINTS
TABLE: BUSINESS RESPONSE TO CONFLICT RISK
Transport Network
TABLE: ROAD RISKS
TABLE: RAIL RISKS
TABLE: PORTS AND INLAND WATERWAYS RISKS
TABLE: AIR TRANSPORT RISKS
Chapter 5: BMI Global Macro Outlook
EM Growth To Accelerate In 2018 While DMs Plateau
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: CAMEROON – MACROECONOMIC DATA & FORECASTS

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