Economy of Cameroon - Essay Example

Economy of Cameroon An infrastructure of the country and its economic development depend highly on country’s physiographical position. So firstly some words must be said about Cameroon, the country. It’s a republic in the west of Central Africa. Cameroon is number 53 on a list of world’s largest countries (United Nations Statistic Division). It borders and usually is compared to its neighbors from the same Central Africa region: Nigeria, Chad, the Central Affric Republic, Equatorial Guinea, Gabon, and the Republic of Congo. There’s an access Cameroon has to the Atlantic Ocean through the Bight of Bonny – a bay which is a part of the Gulf of Guinea. Cameroon also has dense and mature river system what differs this African country from others where the well-known water problem exists. Cameroon has most of all African types of climates and reliefs presented on its territory: forests and open woods occupy about a half of Cameroon’s lands. Infrastructure characteristics The main economic tendency for Cameroon nowadays is decentralization. Country’s government is focused on less central planning and on private enterprises developing also. “Country has made serious efforts to implement institutional reforms with a view to attracting private sector investment” (Parker, C). Economy of Cameroon by far depends on Cameroon’s production realization on the world’s market what means country’s economy by far depends on prices in international raw material trade. This fact stipulates agricultural sector successful functioning and developing. Though forests cover a great part of Cameroon’s territory, there’re also a lot of planes, so agricultural sector has all reasons and perspectives for the development. Wood and primary agricultural production gives almost one-third part from the general export income. Wood, cacao, coffee and cotton can be named as the main sorts of primary production. Other key subsistence crops are beans, potatoes, bananas, yams, tea, cassava (manioc), corn (maize), and oil palm, peanuts (groundnuts), millet, and cassava (“Climate & Agriculture”). Cacao and wood are the most important crops. Cameroon is one of the world’s largest cacao-beans producers. Robusta sort of coffee is a most grooving crop in the country, but arabica coffee is also widely grown. Food producing industry are highly developed especially comparing to other Africa countries, so Cameroon is self-sufficient on the domestic food market and even exports livestock to neighbor countries such as Nigeria, Equatorial Guinea, and the Republic of the Congo. Industrial fishing reduces its development because of a low level of fish in the region, and doesn’t make a great income anymore (Benneh, G). Quite opposite is a wood producing industry. One-third from all Cameroon’s forests is widely exploited now. Raw wood export is one of the most important sectors of Cameroon’s infrastructure and gives about one-tenth from the general export income. For the world’s market, Cameroon (along with Brazil and Indonesia) is one of the main timber (industrial wood) producers. Because of the agricultural sector’s successful functioning, most of population in Cameroon is involved in this sector as workers. But there’s an expansion tendency in wood producing industry, so Cameroon now suffers from illegal logging. Another problem which camps country’s economic development comes from its forests’ location: a lot of natural goods in Cameroon lay in forests’ areas. Potentially, Cameroon is one of the world’s largest producers of cobalt, but the country doesn’t develop cobalt locations in the forests’ areas. In these circumstances oil and gas producing industry is mostly important for the economy of the country. Though comparing to other countries it isn’t big, it gives Cameroon about one-fourth of a general income (“Economy & Industry”). Volume of oil for domestic output is now reducing. There’re a sea port and gas plant on a Kribi coast in progress, and also a pipeline for oil transportation in progress. And there’re also a lot of natural gas locations which are still unexploded because of the costliness of investments. So despite potential ability to develop other sources, the main source of power in Cameroon is hydroelectricity. The main electric provider is Sanaga River which supplies most of Cameroon with electric power. Based on agricultural sector raw production a processing manufactory is growing. Most developed in this sector are sugar, cotton (textile industry) and tobacco processing industries. Cellulose as well as a timber processing is highly developed. Along with a general tendency, privatization programs are spread widely in this area. Also manufacturing industry stays the least controlled industry sector. Banks and business initiatives Cameroon is linked in a monetary union along with several others Central and West African countries with a common currency, the CFA franc which is pegged to euro. Banks are mostly privatized or reconstructed now as the result of economic crises, so new commercial banks are a general feature. Most of these banks are foreign ones. They make headway for native banks whose position now is less successful. Nevertheless, Cameroon bank system is the most successful and powerful in the region (Benneh, G). Central bank discount rate is 4.25% by 31 December 2009 est.; Commercial bank prime lending rate is 14% by 31 December 2013 est. (“Cameroon Economy Profile 2014”). The taxation income consists mostly of dues on production, services and of straight taxis from export and import. Cameroon itself trades mostly with European countries, but there’s also increasing tendency in trade with other foreign partners, and trade with United States is developing. Major European partners for Cameroon are Netherlands and France, though a lot of export production goes to Spain. Other export partners are China (15.2%), India (8.6%), Portugal (8.1%) and Italy (6%) (“Cameroon Economy Profile 2014”). Cameroon’s export mainly consists of agricultural crops in their primary or processed condition, and also of oil, aluminum and timber. “Around 60% of raw timber is shipped to China and 80% of processed wood goes to European Union countries” (“Economy & Industry”). Nigeria and China are major import partners for Cameroon. Other import partners are France (14.9%), Belgium (5.2%), US (4.4%) and India (4.2%) (“Cameroon Economy Profile 2014”). An import production usually consists of cars, different kinds of mechanic equipment, fuel and food. Potentially, touristic business can be developed in Cameroon, because of a variety of climates and reliefs, mature rivers’ system and an access Cameroon has to the Atlantic Ocean. But touristic business doesn’t developing. Also because of physiographic position it’s hard to achieve successful development of transport and communication system. Problems with transportation and communication cramp not only touristic business, but also Cameroon’s interior connections. Is hard to get to some parts of the country, and some parts have more communicational advances than others. Only one-tenth of Cameroon roads are paved. Railway road is still in developing process, except of main functioning lines to Yaounde, Douala, and Ngaoundere. Problems with an overland traffic stipulate hydro and aero transport systems developing. The main port-town is Douala. It’s one of the most modernized ports in West Africa. There’re also ports in entries of Kienké River, Ambas Bay and Benue River. The main airport is also in Douala, though international flights are available from Yaounde as well. Development of air transporting system is in progress (Benneh, G). Despite of the global price recusing tendency in primary production field and a hard trade tendency, economy of Cameroon is quite stable, and keeps an increasing development tendency, firstly because many large projects are now in progress in the country. GDP of Cameroon has increased for 1% in 2012 compared to 2013 year because of similar large projects in transport and communication industries. GPD also arises because of some projects’ reconstruction in oil and gas industry, and because of foreign investments in infrastructure. According to prognoses, in 2014-2015 years GPD will keep its increasing tendency (Doffonsou and Singh). Cameroon stays the most economically successful country in Central Africa region. Works Cited Benneh, G. “Cameroon”. http://www.britannica.com/EBchecked/topic/90925/Cameroon/55100/Economy Doffonsou, R.-A. and Singh, L. “Cameroon”. African Economic Outlook. http://www.africaneconomicoutlook.org/en/countries/central-africa/cameroon/ Parker, C. “Cameroon's infrastructure: a continental perspective”. http://www.iwawaterwiki.org/xwiki/bin/view/Articles/Cameroonsinfrastructureacontinentalperspective “Cameroon Economy Profile 2014”. Index Mundi. http://www.indexmundi.com/cameroon/economy_profile.html “Climate & Agriculture”. Our Africa. http://www.our-africa.org/cameroon/climate-agriculture “Economy & Industry”. Our Africa. http://www.our-africa.org/cameroon/economy-industry “Population by sex, rate of population increase, surface area and density”. United Nation Statistic Division. Retrieved from: http://unstats.un.org/unsd/demographic/products/dyb/DYB2003/Table03.pdf Read More