The impact of trade policies on the economy of Cameroon

Cameroon's economy is heavily influenced by the trade policies put in place by the government. These policies have a significant impact on production, trade and the competitiveness of Cameroonian companies in the local and international market. In this article, we will examine in detail the different aspects of this complex relationship between trade policies and the economy of Cameroon.

The evolution of trade policies in Cameroon

Since its independence in 1960, Cameroon has implemented various trade policies aimed at stimulating the country's economic growth and development. In the 1960s and 1970s, Cameroon adopted a protectionist approach, with high tariff and non-tariff barriers to protect nascent domestic industries.

However, in the 1980s and 1990s, Cameroon gradually liberalized its foreign trade, as part of the structural adjustment programs promoted by international financial institutions. This liberalization resulted in the reduction of customs duties, the elimination of import quotas and the opening of the market to foreign products.

Since the 2000s, Cameroon has pursued its trade liberalization policy, while focusing on strengthening the competitiveness of national companies. In particular, the country joined the World Trade Organization (WTO) in 1995 and signed free trade agreements with the European Union and other trading partners.

The impact of trade policies on the Cameroonian economy

Trade policies implemented by Cameroon have had significant impacts on the country's economy. Here are some of the main impacts observed:

Evolution of the structure of trade exchanges

Trade liberalization policies have led to a diversification of Cameroon's trading partners. While trade was previously dominated by European countries, Cameroon now has more balanced trade relations with Asia, North America and sub-Saharan Africa.

However, the structure of Cameroonian exports remains largely dominated by primary products, such as oil, cocoa, coffee and wood. Exports of manufactured products are struggling to gain momentum, despite diversification efforts.

Competitiveness of Cameroonian companies

Trade liberalization has exposed Cameroonian companies to increased competition from foreign products, both on the local market and for export. Some companies have managed to adapt and improve their competitiveness, particularly through investments in the modernization of their production tools and innovation.

However, many businesses, particularly small and medium-sized enterprises (SMEs), have struggled to cope with this foreign competition. They have faced challenges such as lack of access to finance, high energy and input costs, and infrastructure gaps.

Evolution of the productive structure

Trade policies have also had an impact on the productive structure of the Cameroonian economy. Some sectors, such as export agriculture and mining, have experienced significant growth, taking advantage of opportunities offered by international markets.

On the other hand, other sectors, such as manufacturing, have struggled to grow in the face of foreign competition. This has led to sectoral imbalances, with primary and extractive activities predominating in the economy.

Effects on employment and income

The changes induced by trade policies have also had an impact on employment and incomes of Cameroonians. Some sectors, such as export agriculture, have created new jobs, while others, such as manufacturing, have experienced job losses.

Moreover, the effects of trade liberalization on household incomes have been mixed. While consumers have benefited from lower prices on some imported products, workers in struggling sectors have seen their incomes decline.

Challenges for better business integration

Despite the progress made, Cameroon still faces several challenges to take full advantage of its trade integration. Here are some of the main challenges to be addressed:

Diversification of production and exports

As mentioned earlier, Cameroonian exports remain largely dominated by primary products. To reduce the economy’s vulnerability to commodity price fluctuations, it is essential to diversify production and exports, with a focus on higher value-added manufactured products.

Improving the competitiveness of businesses

Cameroonian companies, especially SMEs, must strengthen their competitiveness to face foreign competition. This involves investments in the modernization of equipment, the development of workers' skills, innovation and access to financing.

Development of transport and logistics infrastructure

The lack of transport and logistics infrastructure is a major obstacle to the competitiveness of Cameroonian companies in international markets. Massive investments are needed to improve the quality of roads, ports and airports, as well as transport and storage services.

Strengthening institutional capacities

To take full advantage of the opportunities offered by trade integration, Cameroon must also strengthen its institutional capacities. This includes developing the skills of officials responsible for implementing trade policies, as well as improving governance and transparency in decision-making processes.

Conclusion

The trade policies implemented by Cameroon in recent decades have had significant impacts on the country's economy. While trade liberalization has allowed for trade diversification and better integration of Cameroon into the global economy, it has also created significant challenges in terms of business competitiveness, diversification of production and exports, and infrastructure development.

To address these challenges and take full advantage of the opportunities offered by trade integration, Cameroon must continue its reform and investment efforts, while ensuring that the benefits of this integration are equitably distributed among the population. This is the price Cameroon will pay to build a more diversified, competitive and resilient economy on the international scene.