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Cameroon Country Risk Report Q2 2016

Cameroon Country Risk Report Q2 2016

Core Views

Cameroon’s economy will see a year of strong GDP growth in 2016,as robust levels of investment, government spending, and low inflationall contribute to a higher production incentive for many of thecountry’s producers. Low levels of domestic savings will lead to aslight deceleration in economic growth 2017, but a stable currencywill ensure GDP growth remains strong over our long-term outlook.

Cameroon will record another two years of wide budget deficits in2016 and 2017 thanks to the government’s continued commitmentto improving the country’s infrastructure network. The subsequentincrease in the country’s debt burden and strong economic growthwill see this deficit gradually fall as a percentage of GDP.

Cameroon’s current account deficit will deepen over 2016 and 2017as exports struggle to keep up with robust import growth. The positionwill be largely financed by foreign investment into the country’sconsiderable infrastructure pipeline, resulting in a significant financialaccount surplus.

The Banque des Etats de l’Afrique Centrale will maintain the keypolicy rate at 2.45% throughout 2016, following the decision toleave the rate unchanged at the November 2015 Monetary PolicyCommittee meeting. This is due to a low inflation outlook for 2016,resulting from further decline in the oil price and a stable currency.

Boko Haram will remain a potent threat in north-west Cameroon in2016. While regional co-operation and support from the US will yieldsome results, acts of terrorism committed by the group will continueas long as the possibility of a political solution is overlooked.


Executive Summary
Core Views
Key Risks
Chapter 1: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Growth Outlook
Full Steam Ahead As Growth Peaks In 2016
Cameroon's economy will see a year of strong GDP growth in 2016, as robust levels of investment, government spending, and low
inflation all contribute to a higher production incentive for many of the country's producers.
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Fiscal And Debt Outlook
Fiscal Profligacy No Cause For Concern
Cameroon will record another two years of wide budget deficits in 2016 and 2017 thanks to the government’s continued commitment to
improving the country’s infrastructure network. The subsequent increase in the country’s debt burden and strong economic growth will
see this deficit gradually fall as a percentage of GDP.
TABLE: FISCAL POLICY
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
External Trade And Investment Outlook
Deficit Deepens In Another Year Of Weak Export Growth
Cameroon’s current account deficit will deepen over 2016 and 2017 as exports struggle to keep up with robust import growth. The
position will be largely financed by foreign investment into the country’s considerable infrastructure pipeline, resulting in a significant
financial account surplus.
TABLE: CURRENT ACCOUNT
Outlook On External Position
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: TOP 5 GOODS IMPORTS IN 2014
TABLE: TOP 5 GOODS EXPORTS IN 2014
Monetary Policy
Currency Stability To Keep Rates Unchanged
Cameroon's currency peg will allow it to escape the volatility that has increased inflation in Africa's other oil exporting economies
following the collapse of oil prices.
TABLE: MONETARY POLICY
Monetary Policy Framework
Chapter 2: 10-Year Forecast
The Cameroon Economy To 2025
Trend Growth To Remain Strong
Economic growth in Cameroon will quicken in 2016 due to strong government consumption and a stable currency, despite a weak oil
outlook. Private consumption, agricultural output, and capital investment will lift real GDP growth to an average of 5.3% between 2019
and 2024.
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Chapter 3: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Boko Haram Threat To Continue In 2016
Boko Haram will remain a potent threat in north-west Cameroon in 2016. While regional co-operation and support from the US will yield
some results, acts of terrorism committed by the group will continue as long as the possibility of a political solution is overlooked.
Long-Term Political Outlook
Stability Threatened Both At Home And Abroad
Cameroon's position as an island of relative political stability in a tumultuous region will be tried and tested over the next 10 years, as
the inevitability of regime change comes to bear. The lack of democratic institutions and a hostile neighbourhood will pose the biggest
challenges to Cameroon's long-term political outlook.
Chapter 4: Operational Risk
SWOT Analysis
Operational Risk Index
Operational Risk
TABLE: OPERATIONAL RISK
Trade Procedures And Governance
TABLE: SUB-SAHARAN AFRICA - TRADE PROCEDURES AND GOVERNANCE RISK
Vulnerability To Crime
TABLE: IMPORT AND EXPORT DOCUMENTS
TABLE: TRADE PROCEDURES BREAKDOWN
Chapter 5: BMI Global Macro Outlook
Global Macro Outlook
Unfinished Business In 2016
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
TABLE: CAMEROON – MACROECONOMIC DATA & FORECASTS

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