Macro Forum: The Street View

CAMEROON MACRO INSIGHTS

GDP growth remained steady at 3.8% year-on-year in the first half of 2018, with growth expected to reach 3.9% in 2018 versus 3.2% in 2017. Cameroon was stripped of hosting rights for the Confederation of African Football’s (CAF) African Cup of Nations (Afcon) tournament scheduled to be held in June 2019 because of major delays in the infrastructure preparation required to host Afcon. The construction sector has been a main GDP growth driver, growing by 6% in the first half of 2018. However, Cameroon has received a reprieve and will host the 2021 tournament and so the impact on GDP growth has been mitigated. Growth is expected to be 4.3% in 2019.

Inflation has remained low at an average of 0.9% in 2018. Food prices are the largest contributor to the CPI index and is therefore sensitive to seasonality and adverse weather patterns, however, the stable CFA franc peg to the EUR has helped to keep imported inflation in check. Inflation is forecast at 1.4% in 2019.

The fiscal deficit is expected to narrow to 3.7% in 2018 from 4.2% of GDP in 2017. This is due to expectations of increased earnings from the hydrocarbon sector, which will enable greater public investment spending.

In October, President Paul Biya won re-election to a sixth term in office. President Biya presides over an environment in which it is difficult and unpredictable for business to operate.  

 

 

 

 

 

 

 

Data

Real GDP Growth

Source: International Monetary Fund

Cameroon FX vs FV

Source: Bloomberg with Actis methodology for Fundamental Value

Inflation

Source: International Monetary Fund