AfCFTA and EPA Could Boost Cameroon’s GDP by 7.45% by 2030, CEPI Report Reveals

The government of Cameroon must accelerate the industrialization of its agriculture sector to ensure that it can compete effectively against foreign competition and reap the benefit of the African Continental Free Trade Area (AfCFTA)

By Boris Esono Nwenfor

BUEA, Cameroon – The strengthening of infrastructure to improve the benefits from the AfCFTA and EPA, enhancing Agricultural Competitiveness, and improving the Business Environment to Boost Investment, are some of the recommendations released during the one-day workshop on the Impact of the African Continental Free Trade Area (AfCFTA) and the Economic Partnership Agreement (EPA) on the Cameroonian Economy.

The event organized by the Cameroon Economic Policy Institute (CEPI) and sponsored by the Atlas Network in Yaounde, was attended by a total of 36 people including entrepreneurs, consultants, students and journalists.

Henri Kouam, Founder and Executive Director, of Cameroon Economic Policy Institute (CEPI) in his presentation of the findings of CEPI’s flagship report on the impact of the EPA and AfCFTA on the Cameroonian Economy, outlined that GDP growth will increase by US$1,102.29 million in 2030 which represent a GDP growth rate of 2.45% while both trade agreements could boost GDP by 7.45%.

He also outlined that agricultural commodities in the EU will increase to $6.55 million while exports from the industrial sector will increase by US$282.07 million by 2030. Under the AfCFTA, exports toward Africa will increase by US$14.01 million for agriculture, US$63.43 million for industry and US$1.01 million for services. Meanwhile, prices will fall as more products enter the Cameroonian economy, supporting domestic consumption.

CEPI's founder noted that domestic demand would rise under the EPAs (0.01% for agricultural products, 0.59% for industrial products and 0.03% for services). Meanwhile, the AfCFTA negatively affects domestic demand (-11.03% for agricultural products and -17.98% for industrial commodities).

Furthermore, Investment and Firms' Profit increases under the EPA by 0.2% for industry but falls for agriculture and services by 0.1%. Under the AfCFTA in 2020 and 2030, investment increases by 2.90% and 1.60% in agriculture, 4.30% and 2.14% in industry and 2.57% and 1.30% in services respectively.

Henri Kouam went on to recommend strengthening Infrastructure to improve the benefits of the AfCFTA and EPA, enhancing Agricultural Competitiveness, improving the Business Environment to Boost Investment, utilizing Development Cooperation, monitoring and Evaluation, boosting Manufacturing Output, developing a National AfCFTA Strength, strengthening Trade Regulations, sensitizing the Private Sector, investing in Infrastructure.

According to the report, household welfare will improve under both trade agreements, with wages rising by 0.9% by 2030 even as the EPA will put downward pressure on wages in Cameroon, but wages are increasingly centrally bargained and the prevalence of a minimum wage will slow the impact of the projected loss in earnings.

Henri Kouam went on to recommend strengthening Infrastructure to improve the benefits of the AfCFTA and EPA, enhancing Agricultural Competitiveness, improving the Business Environment to Boost Investment, utilizing Development Cooperation, monitoring and Evaluation, boosting Manufacturing Output, developing a National AfCFTA Strength, strengthening Trade Regulations, sensitizing the Private Sector, investing in Infrastructure.

The authors further noted that Cameroon must accelerate the industrialization of its agriculture sector to ensure that it can compete effectively against foreign competition. Tchoupe Mfossi said that while GDP will rise and standards of living will increase, the competitiveness of Cameroonian businesses will determine the extent to which employment and wages benefit from both trade agreements.

Henri Kouam said that Cameroon should aim to increase its manufacturing sector's contribution to GDP to 25%, as outlined in its National Development Strategy for 2020-2030. This shift is crucial for reducing dependency on imports and enhancing export capacity, particularly in sectors like agriculture and processed goods.

He also reminded the audience that international standards are there to protect consumers across the world, not impede Cameroon's trade with the rest of the world. As a result, it is important for Cameron to become a leader in standards to encourage cross-border trade. He noted that boosting free trade will require reducing bureaucratic hurdles, ensuring political stability, and fostering a more conducive regulatory framework for foreign investments.

Yannick Ngellewi noted that firms and businesses must ensure their products align with international standards to ensure that intra-African trade rises to above 10% of total trade. Meanwhile, Dr Steve noted that further investments in secondary roads are essential to ensure that products can freely move from one part of the country to another.