Cameroon 2025 Economic Update Fourth Edition Cameroon´s Green Gold UNLOCKING THE VALUE OF FORESTS AND NATURAL CAPITAL © 2025 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and con- clusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy, completeness, or currency of the data included in this work and does not assume responsibility for any errors, omissions, or discrepancies in the information, or liability with respect to the use of or failure to use the information, methods, processes, or conclusions set forth. 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Washington, DC: World Bank.” All queries on rights and licenses should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org. Came Acknowledgements T his edition of the Cameroon Economic Update was prepared by a World Bank team co-led by Francis Ghislain Ngomba Bodi (Economist, EAWM2) and Samba Ba (Senior Economist, EAWM2), and composed of Chris Belmert Milindi Katindi (ET Consultant, EAWM2) Ryan Milan Rafaty (Governance Specialist, EGVPI), under the supervision of Robert Utz (Lead Economist, EAWM2). The report benefited from insights and comments provided by Kanta Kumari Rigaud (Lead Climate Change Specialist, SAWE1), Sugandha Srivastav (Consultant, Lecturer in Environmental Economics, University of Oxford). The team benefited from guidance from Cheick Fantamady Kante (Country Director, AWCC1), Sandeep Mahajan (Practice Manager, EAWM2), Guillemette Jaffrin (Operations Manager, AWCC1), Geneviève Boyreau (Program Leader, EAWDR) and Nabil M. Chaherli (Sector Leader, SAWDR). Pinar Baydar (Operations Analyst, EAWM2), Irene Sitienei (Program Assistant, EAWM2) and Sandra Ouakam (Team Assistant, AWCC1) supported the team during the preparation of the report. The findings, interpretations, and conclusions expressed in this publication do not necessarily reflect the views of the World Bank’s Executive Directors or the countries they represent. The report is based on information available as of June 16, 2025. The World Bank team welcomes stakeholder feedback on the content of the Cameroon Economic Update. Please direct all correspondence to Francis Ngomba Bodi (fngombabodi@worldbank.org) and Samba Ba (sba3@worldbank.org). Photo credit: O. Hebga/ World Bank. Table of Contents Chapter 1 – State of the Economy: Strengthened but insufficient growth7 1. Recent Economic Developments7 1.1 Recent Global and Regional Economic Development 7 1.2 Recent Growth and Inflation Dynamics in Cameroon9 1.3 External Sector: the current account deficit narrowed due to cyclical factors16 1.4 Fiscal Accounts and Debt: Fiscal Slippage and Slight Increase in Public Debt20 1.5 Monetary aggregates and Financial Sector Soundness26 2. Medium Term Economic Outlook30 2.1 Global and Regional Economic Outlook30 2.2 Domestic Growth and Inflation Outlook30 2.3 Current Account Outlook31 2.4 Fiscal and Debt Outlook 32 2.5 Outlook is less optimistic compared to the previous year 33 2.6 Risks to the outlook 35 2.7 Structural Issues and Challenges in Cameroon 37 Chapter 2 – Building and preserving Cameroon’s wealth for better livelihoods 41 1. Wealth accounting – Overview and concepts 41 Evolution and composition of Cameroon’s wealth and the contribution 2.  of forest ecosystem services 45 2.1 Measuring Components of Comprehensive Wealth 48 2.1.1 Produced Capital 48 2.1.2 Human Capital 50 The contribution of Cameroon’s forests to Cameroon’s and global wealth 3.  and well-being 56 3.1 Escalating Forest Loss and Ecosystem Transformation 56 3.2 Spatial Patterns of Deforestation 56 3.3 Declining Forest Condition and Biodiversity 57 3.4 Drivers of Deforestation and Economic Trade-Offs 57 3.5 Increasing Use of Provisioning Services 58 3.6 Regulating Services: Sediment and Carbon Dynamics 58 3.7 Ecosystem Service Flows and Asset Values 59 3.8 Key Insights and Strategic Implications 60 Implications of Cameroon’s Forest Ecosystem Service Accounts (FESA) 4.  for economic development and policy 63 Linking Wealth, Forest Ecosystem Services, and GDP to Better Capture 5.  Long-Term Sustainability 69 5.1. Adjusting GDP for ecosystem services that are not captured in GDP 69 5.2. Adjusting gross national income and net national savings for changes in national wealth 72 References 75 Executive Summary T his fourth edition of the Cameroon Economic Updates is part of a program of annual reports analyzing Cameron’s development trends and constraints. It examines Cameroon’s economic performance within the global and regional economic conditions, highlighting the importance of wealth accounting for a sustainable forestry management. Stagnant Economic Growth Amid Cooling Inflation and Fiscal Slippage in 2024 Global economic growth stabilized in 2024, supported by easing inflationary pressures and the initial phases monetary policy loosening across both advanced economies and emerging market and developing economies. In Sub-Saharan Encouraged by declining inflation, the regional Central Bank (BEAC) began easing its monetary policy in March 2025, signaling a more accommodative policy to support domestic demand. Cameroon’s real GDP grew by 3.5 percent in 2024, up from 3.2 percent in 2023, driven by higher cocoa prices and cotton yields, as well as an improved power supply. In 2024, GDP per capita recovered to USD 1,467, surpassing the pre-Covid19 pandemic (2019) level of USD 1,458 but remaining below the USD 1,980 peak of 1986. Between 2021 and 2024, the number of individuals living below the international poverty line ($2.15 in 2017 PPP) in Cameroon increased from 6.2 million to over 6.9 million, resulting in a 23.3 percent international poverty rate in 2024 up from 22.8 percent in 2022. Average inflation decreased from 7.4 percent to 4.5 percent between 2023 and 2024, reflecting the impact of sustained monetary policy tightening, price controls, and a reduction in imported inflation. This notable disinflation occurred despite a second pump price increase in March 2024, following the one in February 2023. The current account deficit narrowed due to cyclical factors, especially soaring cocoa bean prices. The trade deficit decreased by 0.6 percentage points of GDP in 2024, while the current account deficit declined from 4.1 in 2023 to 3.4 percent of GDP percent in 2024. Over the past two decades, Cameroon’s economy has seen a decline in the complexity of its export items, indicating a shift towards less diversified and technologically sophisticated exports. The overall fiscal deficit widened to 1.5 percent of GDP in 2024, up from 0.7 percent of GDP one year ago, due to slippages in current expenditures and weaker than expected revenue performance. Middling revenue performance and the use of fiscal space created by the partial removal of fuel subsidies to increase expenditure on goods and services, led to substantial fiscal slippages in 2024. The overall level of public debt increased in 2024 to finance higher primary deficit. By the end of December 2024, the total public and publicly guaranteed (PPG) debt stood at approximately 46.8 percent of GDP, increasing from 46.1 percent of GDP at the end of 2023. Debt coverage has expanded since 2023 by including central government and the state-owned enterprises’ floating debt, and domestic arrears accumulated over the period 2000-2019. 2  |  Cameroon 2025 Economic Update Fourth Edition Broad money expanded by 9.8 percent, primarily driven by robust growth in credit to the private sector, despite the regional central bank maintaining its key rates at high levels in 2024. The stability of Cameroon’s banking system has been strengthened with a reduction in non-performing loans (NPL) in 2024, despite growing exposure to sovereign risk. Moderate real GDP growth in the medium-term amid fiscal risks and despite growing international uncertainties Global economic growth is projected to slow down to 2.2 percent in 2025 amid rising trade uncertainty. Ongoing moderating inflation, lower commodity prices, and easing monetary policy should offset by the negative effects of ongoing trade policy shifts and heightened geopolitical tensions. Therefore, growth in SSA is expected to increase to 3.7 percent in 2025. Macroeconomic prospects in this Cameroon Economic Update, particularly real GDP growth, are less optimistic than those from last year. The medium-term outlook is moderately positive, with an average real GDP growth of 3.9 percent over 2025 to 2028, supported by improved power supply for industrial companies and increased public investment in the medium-term with positive effects on the construction sector. Average inflation is expected to continue declining, reaching the 3 percent target by 2027. The current account deficit is anticipated to remain around 4.0 percent of GDP over the medium term. This projection accounts for the decline in oil production and prices, the mixed outcomes from government industrial policies, and higher imports required for increased public and private investment. The fiscal deficit is projected to be around 2.0 percent of GDP to account for declining oil revenue. The ongoing decline in oil production and projected lower oil prices are expected to impact government revenue. However, non-oil tax revenue is expected to partially offset this decline. On the expenditure side, wages and salaries and Goods and services expenditures will slightly expand in 2025, along with interest payments to account for liquidity constraints in the regional securities market and higher foreign interest rates. Cameroon’s external and overall public debt are sustainable, but the country remains at high risk of debt distress due to liquidity issues. While Cameroon’s external debt stock indicators are below the sustainability threshold, its external debt service indicators - debt service-to-exports ratio and debt service-to-revenue ratio - remain above the threshold but on a downward trend, supported by active debt management. This outlook remains vulnerable to several risks, including: (i) higher volatility in commodity prices, (ii) a continued security crisis, (iii) lower-than-expected budget support from external donors, (iv) ongoing energy supply shortages, and (v) potential tensions surrounding the presidential elections in October 2025. Measuring Cameroon’s wealth and ensuring a sustainable management of its natural resources. Measures of a nation’s wealth are an important complement to GDP, providing important insights into the capital foundation for future growth and its sustainability. By assessing the evolution of the level and composition of national wealth, policymakers can better understand the capacity of an economy to generate future income and sustain development. The ideal situation for a country is when both GDP per capita and wealth per capita increase simultaneously, indicating that a country’s economic output is growing in a sustainable manner. Cameroon 2025 Economic Update Fourth Edition  |  3 Despite overall growth in total wealth which reached USD553 billion in 2020, up from USD311 billion (real chained 2019 USD) in 1995, national wealth per capita declined by 11 percent between 1995 and 2020. The National Wealth Index (NWI) per capita, which measures the real value of the country’s produced, human, natural, and physical capital, dropped from 100 in 1995 to 89 in 2020, reflecting an average annual decline of -0.4 percent. The decline in wealth per capita, despite an increase in real GDP per capital, suggests that economic growth has not been accompanied by sustainable wealth accumulation. Changes in a country’s wealth can be illuminated by adjusted net savings (ANS), which provides a broader picture of a nation’s economic sustainability and ability to invest in its future. ANS is measured as gross national savings (or gross investment, given the savings-investment identity) minus depreciation of produced capital, depletion of subsoil assets (fossil fuels and minerals) and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. Cameron’s ANS was moderately negative between 2010 and 2020, indicating that the country is depleting its wealth slightly faster than it is accumulating new assets. The aggregate monetary value of Cameroon’s ecosystem services nearly doubled from XAF 19.5 trillion (USD 32.3 billion) in 2000 to XAF 37.2 trillion (USD 61.5 billion) in 2020, with carbon retention comprising 96 percent of the total. Forest asset values soared from USD 748 billion in 2000 to USD 1.42 trillion in 2020, propelled by increasing service volumes and global carbon prices. While the global value of Cameroon’s forest ecosystem services (USD 62 billion annually, with carbon retention accounting for 96 percent) is immense, only a tiny fraction (0.3 percent) accrues domestically. This economic imbalance highlights a critical need for increased international climate finance mechanisms (e.g., REDD+, Paris Alignment) to align global benefits with local incentives. Cameroon’s forest depletion accelerated dramatically after 2010, with the conversion of lowland forests to forest-farm mosaics between 2010 and 2020 exceeding five times the rate observed in the previous decade. This escalation stems from intensified agricultural clearance, and infrastructure development. This surpasses the rate of natural regrowth, to keep pace with losses in mosaic areas, threatening biodiversity (including iconic species like the Cross River gorilla) and vital ecosystem services. The spatial distribution of forest loss reveals a clear nexus with human activity, particularly proximity to population centers and transport corridors. Beyond the reduction in forest extent, the ecological condition of Cameroon’s forests has deteriorated significantly, as assessed through satellite-derived metrics such as tree height, canopy cover, forest connectivity, and landscape naturalness. Montane and submontane forests are the most degraded, with less than 20 percent and 30 percent of their respective areas remaining near pristine, owing to logging, fragmentation, and drier conditions along the northwestern rainforest periphery. Driven by limited energy alternatives, the exploitation of provisioning services has intensified in a context of sustained population growth. Regulating services, particularly sediment retention and carbon sequestration, are under increasing strain due to forest loss and degradation. Carbon storage remains a cornerstone of Cameroon’s global ecological contribution, with forests retaining 7.1 billion tons of carbon (26 billion tons of CO2) in 2020, 64 percent in biomass and the remainder in soils. Spatially, Cameroon’s forest ecosystem accounts highlight priority areas for intervention, notably the Centre, Nord, and Est regions, where deforestation is most acute, while stable peat and mangrove ecosystems offer models of resilience. The social dimensions of forest loss further complicate these dynamics. Deforestation and degradation disproportionately affect indigenous 4  |  Cameroon 2025 Economic Update Fourth Edition and forest-dependent communities, undermining their livelihoods, cultural practices, and access to resources like bushmeat and medicinal plants. To minimize the environmental impact of growth and preserve natural wealth, Cameroon must prioritize its high-value, vulnerable ecosystems and transition to a forest-based service economy, leveraging ecotourism, medicinal services with its unique flora, forest-based knowledge. To become an emerging economy by 2035, Cameroon must diversify its economy to reduce reliance on primary commodities. A competitive tourism sector can make a significant contribution to Cameroon’s efforts to scale up growth and job creation. It is likely within Cameroon’s reach, as its natural endowment is a highly unique ecosystem that other countries cannot compete with. Cameroon’s forests are among the most undervalued climate assets globally, offering carbon sequestration benefits that largely exceed compensation though climate finance, highlighting fiscal, political, and ethical disparities. The medicinal potential of Cameroon’s forest plants is immense. The commercialization of forest plants into new drugs reflects an option value which is wholly unquantified in forest ecosystem service accounts These findings reinforce the need for climate finance models that go beyond results-based payments for avoided emissions and instead recognize forests as repositories of planetary option values. Blended finance instruments—such as sovereign carbon bonds, biodiversity credits, and Article 6 transactions under the Paris Agreement—can be calibrated to reward the preservation of both tangible and intangible ecosystem benefits. Without such valuation frameworks, the economic logic of forest conservation will remain incomplete and skewed against long-term global benefits. The opportunity cost of not preserving these forests is rising sharply as international carbon prices increase and irreversible biodiversity loss accelerates. Below are the main policy recommendations of this Economic Update Edition. Policy Area Action Responsible Entities Time Frame Forest Scale-up international carbon finance, such Ministry of Forestry and Short Term Conservation as through the Paris Agreement or REDD+ Wildlife Medium Term mechanisms, to align local incentives with Ministry of Environment global contributions to climate goals. Prioritize high-value, vulnerable ecosystems— Ministry of Forestry and Short Term peatlands, mangroves, and intact lowland Wildlife Medium Term forests—to maximize ecological and economic Ministry of Environment returns from natural capital preservation Invest in Integrate forest condition metrics into national Ministry of Forestry and Short Term Natural Capital land-use classification systems and inform Wildlife Medium Term Accounting fiscal transfer formulas where possible. Ministry of Environment Ministry of Decentralization and Local Development Invest in regular natural capital accounting, Ministry of Forestry and Short Term valuation of forest services Wildlife Medium Term Ministry of Environment Ministry of Decentralization and Local Development (continued) Cameroon 2025 Economic Update Fourth Edition  |  5 Policy Area Action Responsible Entities Time Frame Natural Capital Increase the efficiency and productivity of Ministry of Agriculture Short Term Accounting existing plantations to prevent extensive Ministry of Trade Medium Term implications agriculture accompanied with deforestation. Develop service-led growth (for instance a Ministry of Economy Medium Term competitive tourism sector) that can deliver Ministry of Finance Prime rapid results Minister Office Develop the medicinal potential of Ministry of Agriculture Short Term Cameroon’s forest plants Ministry of Public Health Medium Term Ministry of Industry Need for climate finance models that go Ministry of Forestry and Short Term beyond results-based payments for avoided Wildlife Medium Term emissions and instead recognize forests as Ministry of Environment repositories of planetary option values. Ministry of Finance Fill the Develop and strengthen energy infrastructure Ministry of Energy and Short Term infrastructural to ensure a reliable power supply. Water Utilities Prime Medium Term gap to boost Minister Office economy-wide Ministry of Finance productivity Ministry of Economy Ensure financial soundness and sustainability Ministry of Energy and Short Term of the electricity sector. Water Utilities Ministry of Finance Prime Minister Office Upgrade transportation networks to ensure Ministry of Public Works Short Term efficient movement of goods and raw Ministry of Transportation Medium Term materials, thereby reducing logistics costs. Increase Tax Improve efficiency in tax administration to Ministry of Finance Short Term Revenue to ensure higher compliance and reduce tax finance public evasion using digital means. infrastructure with domestic Broaden the tax base by reducing and Ministry of Finance Short Term revenue. streamlining tax exemptions and preferential rates, particularly in VAT and income tax. Expenditure Prioritize spending on infrastructure projects Ministry of Finance Short Term control that stimulate economic growth and create Ministry of Economy employment opportunities. Redirect savings from fuel subsidy reduction Ministry of Finance Short Term towards productive investments or social Ministry of Economy welfare programs. Prime Minister Office Reduce bank’s Promote financial inclusion by easing public Ministry of Finance Short Term sovereign access to securities purchase, to reduce bank’s exposure sovereign exposure. 1 State of the Economy: Strengthened but insufficient growth 1.  Recent Economic Developments 1.1 Recent Global and Regional Economic Development a  Global and regional growth remains below pre-pandemic levels and vulnerable to  highly uncertain context. Global growth stabilized in 2024 as inflationary pressures further eased, and incipient loosening of monetary policy helped support economic activity. The global economy is estimated to have grown by about 2.8 percent in 2024, same as in 2023. Inflation has been on a downward trend, reflecting falling food and energy prices and lagged impacts of monetary tightening, being brought at or below targets in over 60 percent of economies in 2024. Monetary policy easing has become widespread, leading to a slight easing of global financial conditions since mid-2024. Yet, investor sentiment toward 8  |  Cameroon 2025 Economic Update Fourth Edition 4.5 200.00 4.0 180.00 3.5 160.00 3.0 140.00 2.5 120.00 2.0 100.00 1.5 80.00 1.0 60.00 0.5 40.00 0.0 20.00 World Advanced Emerging and Sub-Saharan 0.00 Economies Developing Africa 2021M01 2021M04 2021M07 2021M10 2022M01 2022M04 2022M07 2022M10 2023M01 2023M04 2023M07 2023M10 2024M01 2024M04 2024M07 2024M10 2025M1 Economies 2022 2023 2024 Commodity Price Ind ex Energy Agriculture Metals and Minerals Figure 1:  World Real GDP Growth Figure 2:  Commodity Price Index Source: Global Economic Prospects, January 2025, World Bank. Source: World Bank Commodity Price Data, The Pink Sheet. 6 680.00 5 660.00 640.00 4 620.00 3 600.00 2 580.00 1 560.00 0 540.00 2020M11 2021M11 2022M11 2023M11 2024M03 2024M07 2024M11 2025M03 2020M3 2020M7 2021M3 2021M7 2022M3 2022M7 2023M3 2023M7 520.00 2020M01 2020M05 2020M09 2021M01 2021M05 2021M09 2022M01 2022M05 2022M09 2023M01 2023M05 2023M09 2024M01 2024M05 2024M09 2025M01 BEAC ECB BCEAO Figure 3:  Policy rates of ECB-BCEAO and BEAC Figure 4:  XAF per U.S. Dollar, Period Average Sources: Opendata for Africa, ECBStat. Source: IMF IFS database. emerging markets remained unstable, and non-concessional borrowing remained costly due to high bond yields in advanced economies, compared to the 2010s. Global trade recovered in 2024, with an estimated growth of 3.4 percent. The global economy seems to be settling into a relatively slow and uneven growth, not enough to support sustained inclusive development. Global growth, trade, and investment are all below the pre-pandemic averages observed in 2010-2019 and remain insufficient to counter the damage from the multiple shocks affecting the world since the COVID-19 pandemic.1 Economic activities in Sub-Saharan Africa (SSA) expanded in 2024, with higher growth compared to the previous year, but still insufficient to drive significant poverty reduction. SSA’s GDP growth increased from 2.9 percent in 2023 to an estimated 3.5 percent in 2024. Growth improved in the region’s largest economies, supported by higher oil production in Nigeria and improved electricity supply in South Africa. The drop in energy and metal prices from their 2022 peaks has required fiscal adjustments in several commodity-exporting economies, undermining growth, particularly among metal exporters. Overall, growth in SSA remains modest and uneven, and unable to generate sufficient jobs and poverty reduction. Due to low growth, fast population growth, lingering effects of inflation and underinvestment, poverty continues to rise, in a region that faces the highest extreme poverty rate in the world, home to 80 percent of the world’s 612 million extreme poor2. 1 World Bank. 2025. Global Economic Prospects. June. 2 World Bank. 2025. Africa Pulse. Extreme poverty data is based on estimates of the share of households living under $2.15 per day, in 2017 PPP Cameroon 2025 Economic Update Fourth Edition  |  9 Growth in the Economic and Monetary Community of Central Africa (CEMAC) reached an estimated 3.0 percent in 2024, up from 2.0 percent in 2023. Cameroon and Chad exhibited the strongest growth performances, registering 3.5 and 3.7 percent growth, primarily driven by increased cocoa and cotton exports in Cameroon, and non-oil sectors in Chad. The Republic of Congo registered modest growth of 2.6 percent, with a 3.9 percent increase in non-oil sectors partially offset by a decline in oil production due to technical issues. Meanwhile, growth in CAR improved from 0.7 percent in 2023 to 1.5 percent in 2024, benefiting from enhanced fuel and electricity supplies and signs of recovery in the agro-processing, telecom, and retail sectors. The Equatoguinean economy, following a significant contraction of 5.1 percent in 2023, is estimated to have modestly recovered in 2024 with a 0.9-percent growth, driven by a rebound in hydrocarbons. In per capita terms, income growth in CEMAC is estimated to have increased to 0.2 percent in 2024 (up from -0.8 percent in 2023). CEMAC’s trade and fiscal positions deteriorated in 2024, as CEMAC continues to be heavily influenced by fluctuations in oil prices. Due to lower oil prices, reduced commodity revenues, and high spending pressures, CEMAC’s average fiscal balance is estimated to have shifted to a deficit of -1.5 percent of GDP in 2024, compared to a 0.6 percent surplus in 2023. The public debt remains elevated in countries such as Congo (93.5 percent) and Gabon (72.5 percent), surpassing the regional convergence criterion of 70 percent of GDP. Tax collection, fiscal space and liquidity remain constrained within CEMAC, limiting options to manage further shocks. Tax revenues remain, on average, below 15 percent of GDP, which research indicates to be the usually recommended threshold to support basic public services. Meanwhile, the trade balance registered a slight decrease from 8.9 percent of GDP in 2023 to 8.6 percent in 2024. Overall, the region maintains trade and current account surpluses, largely supported by strong commodity exports. At the same time, a high vulnerability to volatile commodity prices is evidenced by the impacts of declining oil prices. Between 2022 and 2024, as oil prices declined from about USD100 to 80, CEMAC’s current account balance decreased from 7.5 percent of GDP to 4.0 percent of GDP, translating into a drop in foreign reserves, from 5.2 months of import coverage in 2022 to 4.6 months in 20243. Encouraged by declining inflation, the Bank of Central African States (Banque des États de l’Afrique Centrale, BEAC) began easing its monetary policy in March 2025. Inflation in the CEMAC zone continued its downward trend, reaching 4.0 percent in December 2024, compared to 4.5 percent a year earlier, due to the recovery of global supply chains, easing energy and food prices, and a tight monetary policy. Preliminary data from early 2025 indicate that this downward trend may persist throughout the year, although regional inflation still exceeds the convergence criterion of 3 percent and faces risks in view of the changing global trade and financial conditions. In this context, for the first time since late 2021, the BEAC lowered its key policy rate from 5.00 percent to 4.50 percent in March 2025. Also, the marginal lending facility rate, which is the interest charged on overnight loans granted by the BEAC to commercial banks, was reduced from 6.75 percent to 6.00 percent, as part of an effort to lower refinancing costs, improve access to credit, and encourage investment4. 1.2  Recent Growth and Inflation Dynamics in Cameroon Cameroon’s real GDP grew by 3.5 percent in 2024, up from 3.2 percent in 2023, driven by higher cocoa prices and cotton yields, as well as an improved power supply. Cocoa prices in international markets have been increasing since late 2023, and farmgate cocoa prices followed suit as the domestic cocoa market was liberalized in the 1990s. The government regulates the cocoa market to balance power 3 Choudhary, Rishabh; Ruch, Franz U; Skrok, Emilia. 2024. Taxing for Growth: Revisiting the 15 Percent Threshold. Policy Research Working Paper 10943. Washington, DC: World Bank. 4 World Bank. 2025. CEMAC Economic Barometer. June edition. 10  |  Cameroon 2025 Economic Update Fourth Edition between exporters and local producers by sharing international price information. This has increased producers’ revenues, boosting private consumption’s contribution to growth from 2.6 percentage points pp) in 2023 to 3.6 pp in 2024. Cotton production also rose in 20245 due to better yields and anti-smuggling efforts, with SODECOTON, a state-owned enterprise, supporting individual producers with loans, inputs, and incentives to enhance the quality of cotton. These gains offset the decline in forestry activities, impacted by a higher export tax on logs. The 2024 finance law raised the log export tax from 50 percent to 75 percent with two main goals: (i) to prepare the country for the upcoming log export ban scheduled for 2028, and (ii) to provide local wood processing units with a sufficient supply of logs. The performance of industry improved in 2024 compared to 2023 despite the continued decline in oil production. Power supply improved in 2024, primarily due to the full commissioning of the Nachtigal hydroelectrical power dam (420MW) and the commissioning of the Lom Pangar hydroelectrical power dam (30 MW). This, however, had a limited impact on overall economic activity (See Box 1 below). Even so, manufacturing industries and construction sectors contributed to a 0.6 percentage points growth contribution to GDP in 2024. Manufacturing value added rose to 13.9 percent of GDP in 2024, up by 0.4 percentage points from 2023, but still below the SND30’s target of 25 percent of GDP by 2030. High transportation cost limited the sector’s potential. The construction sector experienced growth due to increased public capital expenditures on infrastructure and roads, which climbed to 4.1 percent of GDP in 2024 from 3.9 percent in 2023. Despite these positive developments, the industrial sector’s progress was hindered by a continuing decline in hydrocarbon production. The decline in oil production accelerated significantly in 2024 at a rate of -8.2 percent compared to -4.3 percent in 2023. This ongoing decline can be attributed to the absence of new oil field discoveries in recent years and insufficient investments to maintain existing wells or drill new ones. Consequently, the hydrocarbon sector detracted from overall growth in 2024, with a negative contribution of 0.2 percentage points. 5 The volume of cotton exported rose by 19.8 percent in 2024 compared to 2023. Source: 2024 Cameroon External Trade Statistics, Na- tional Institute of Statistics. Cameroon 2025 Economic Update Fourth Edition  |  11 Box 1:  Factors behind low growth impact of improved power supply in Cameroon Authorities have invested over the last fifteen years in a couple of hydropower dams and have attracted some private investors in the power generation sector. Cameroon is exploiting only 10 percent of its hydropower potential, and this partly explains the low power supply and regular power shortages. Over the last six years, three hydropower dams were fully commissioned: (i) Memve’ele hydropower dam with a 211 MW-capacity commissioned in 2019 but fully connected to Yaoundé city in 2023, (ii) Lom-Pangar hydropower dam commissioned in 2023 with a 30 MW-capacity intended to supply power to the East region, and (iii) Nachtigal hydropower dam that was fully commissioned in early 2025 with a capacity of 420 MW. The exciting prospects of substantial improvement in power supply have prompted the private sector to massively invest, for instance in the food manufacturing sector, in order to rapidly reap the benefits of this improvement. Private investment as a share of GDP has shown steady growth over the past five years, and rose to 18.0 percent in 2024, up from 13.5 percent in 2019. However, this has not translated into significantly higher real GDP growth due to, among others, several energy-sector factors. Two main drivers behind this setback can be identified. The first one is the lower-than-expected impact of these additional hydropower dams on power supply. Power supply from Memve’ele hydropower dam heavily depends on the hydrological situation of the Ntem River that has, like similar resources, been impacted by climate change. On average, Memve’ele provides just one sixth of its full capacity during the dry season, and three fifths during the rainy season. The authorities have committed to building an upstream water retention dam, but this requires time. Whereas power from Nachtigal hydropower dam is fully dispatched, economic growth catalysts such as industrial demand located in areas such as Douala are yet to optimally access this power due to network challenges. The public company in charge of transmission lines is reinforcing its network to improve the grid, in particular, the construction of a new transmission line between Nachtigal and Douala expected to be completed in the 3rd Quarter of 2025. This, coupled with other improvements in the transmission and distribution system expected to be completed in 2026, shall result in an increase in capacity and efficiency of the network. The second driver is related to financial imbalances in the energy sector in Cameroon. Cross indebtedness between the State and the electricity distribution company, the latter and electricity independent power producers (IPPs), the distribution company and the energy transmission public company prevents the inflow of private capitals in the sector that are essential to boost electricity supply. In order to reduce the financial pressure coming from electricity purchased from the IPPs, it may be advisable to replace the expensive electricity from gas and thermal power stations with the cheaper electricity from hydropower dams, especially Nachtigal. This solution has the advantage of reducing the accumulation of distribution company’s debt to electricity producers, as well as the State’s indebtedness to the distribution company regarding the tariff compensation. The viability and benefits of such a solution must however be closely examined as the IPPs have long term contracts with “take or pay” arrangements. It is nonetheless conceivable that as long as the distribution company will be the one to decide on the energy mix, it may decide in line with its own interest which is to reduce its debt to producers through prioritizing cheapest (hydroelectrical) electricity. To sum up, even though major hydropower dams were recently commissioned, they did not lead to a rise in power supply due to financial imbalances in the power sector that prompted the distribution company to replace expensive electricity sources with hydroelectrical power, in view of reducing its financial burden. 12  |  Cameroon 2025 Economic Update Fourth Edition The service sector remained the key driver of real GDP growth in 2024. The ongoing urbanization trends in Cameroon, characterized by significant migration from the rural agricultural sector to urban services, have sustained the service sector’s contribution to value creation. This has notably propelled trade activities, which continued to expand in 2024 despite the constraints posed by a degraded road network. The financial sector drove the service sector’s dynamics in 2024, experiencing notable growth in credit activity with the entry of two new banks into the market. Consequently, credit to the private sector grew by 25.6 percent in 2024, leading to an annual growth in the financial sector by 8.9 percent. On the demand side, public and private consumption, and private investment were the primary drivers of growth in 2024. Public consumption significantly increased, quadrupling its contribution to growth and leading to substantial fiscal slippage. Private investment remained strong with a 4.1 percent increase from 2023, particularly due to the commissioning of new cement processing plants and agro- processing units. Private consumption was robust, benefiting mainly from higher cocoa bean export revenues, which doubled in 2024, and strong credit growth. The change in net exports’ contribution was positive, driven by an improvement in non-oil exports in 2024. In 2024, GDP per capita recovered to USD 1,467 (real 2015 USD), surpassing the pre-pandemic (2019) level of USD 1,458 but remaining below the USD 1,980 peak of 1986. The average GDP growth of 2.8 percent over the last five years falls well short of the 7.6 percent target set by the National Development Strategy (NDS30). The path to becoming an upper-middle-income country has been hindered by structural deficiencies and more recently also by the pandemic, other internal and external shocks, and a loss of growth momentum. Structural weaknesses, such as infrastructural deficiencies, an underdeveloped financial system, and a decline in labor force participation from 79.1 to 64.3 percent between 2005 and 2021 impede progress. To address these challenges, Cameroon may need to reconsider its growth model, focusing on private sector involvement, redefining the state’s economic role, strengthening institutions, resolving urban bottlenecks, and tackling low labor productivity. Between 2021 and 2024, the number of individuals living below the international poverty line ($2.15 in 2017 PPP) in Cameroon increased from 6.2 million to over 6.9 million, resulting in a 23.3 percent international poverty rate in 2024 up from 22.8 percent in 2022. This rise in poverty is due to low economic growth, rapid population increase, and inadequate job creation. From 2014 to 2021, urban poverty incidence nearly doubled, and the number of urban poor more than doubled, reshaping the poverty landscape. Urbanization in Cameroon is progressing rapidly, with 60 percent of the population now living in urban areas. Factors such as escalating conflicts, natural disasters, and the pursuit of better economic prospects and services have driven rural-to-urban migration over the past two decades. However, rural-urban migrants face higher poverty rates than other urban inhabitants, as rapid urbanization is not accompanied by productivity enhancing structural transformation. Average inflation6 decreased from 7.4 percent to 4.5 percent between 2023 and 2024, driven by tighter monetary policy, price controls, and reduced imported inflation. Despite increases in fuel price at the pump in February 2023 and March 2024 following of subsidies that peaked at 3.0 percent of GDP in 2022, inflation continued to decline, mainly lower price inflation of locally produced goods and, to a lesser extent, of imported goods. Food prices significantly contributed to this decrease, cooling to 5.6 percent in 2024 from 10.4 percent in 2023. Transportation price inflation moderated to 12.3 percent in 2024 from 16.2 percent in 2023, while energy price inflation slightly dropped to 7.7 percent at the end of 2024 from 8.8 percent in 2023. However, year-on-year (YoY) inflation showed a different trend, declining during the first two trimesters of 2024 but increasing over the last quarter until January 2025. This trend has been driven by soaring international food prices (Figure 11), Euro 6 Average inflation is monitored and targeted by the Regional Central Bank. Average inflation in December is considered as the average inflation of the year. Cameroon 2025 Economic Update Fourth Edition  |  13 depreciation against US dollar (Figure 4) and growing domestic demand pressures fueled by higher cocoa beans export proceeds7 and significant credit growth (+ 25 percent) in 2024. Additionally, supply constraints due to the degradation of road infrastructure quality have exacerbated demand pressures on prices, particularly for fresh products that rely on efficient transportation networks. On a geographic basis, regional capital cities experienced varying levels of inflation. Maroua, the capital city of the Far North region affected by Boko Haram activities, had the highest average inflation. Other regional capital cities with average inflation higher than the national average—such as Douala, Bafoussam, Buea, and Ebolowa—appear to have been impacted the most by demand shocks cited above. In summary, the observed trends in YoY inflation highlight the significant impact of infrastructure quality and domestic demand pressures on food prices, underscoring the need for targeted policy to address these underlying issues. Figure 6: Oil and Non-Oil contributions Annual Percentage Change in oil and gas production in Cameroon to Real GDP 3,7 8,0 4,0 3,3 3,5 3,2 6,0 4,0 3,0 2,0 2,0 0,0 -2,0 1,0 -4,0 -6,0 0,0 -8,0 2021 2022 2023 2024e -10,0 -1,0 2020 2021 2022 2023 2024 Oil GDP Non oil GDP Real GDP Oil production Gas producti on Figure 5:  Annual Percentage Change in Oil and Gas Figure 6:  Oil and Non-Oil contributions to Real GDP production in Cameroon. Figure 8: Demand-side Drivers of Real Figure 7: Supply-side Drivers of Real GDP GDP Growth Growth 7,0 6,0 4,0 5,0 3,5 4,0 3,0 3 ,0 2,0 2,5 1,0 2,0 0,0 1,5 -1,0 1,0 -2,0 0,5 -3,0 0,0 2021 2022 2023 2024e 2021 2022 2023 2024e Private consumption Government Consumption Agriculture Industry Services Gross Fixed Private Investment Gross Fixed Public Investment Net Exports Figure 7:  Supply-side Drivers of Real GDP Growth Figure 8:  Demand-side Drivers of Real GDP Growth Sources: Cameroonian authorities, World Bank Staff estimates. 7 Which doubled in 2024. 14  |  Cameroon 2025 Economic Update Fourth Edition Figure 9: Non Oil Real and Potential GDP 5,0 Figure 10: GDP per capita in Cameroon 4 ,5 4 ,0 1470,0 3,5 1460,0 3,0 1450,0 2,5 2,0 1440,0 1,5 1430,0 1,0 0,5 1420,0 0,0 1410,0 2021 2022 2023 2024e 2021 2022 2023 2024e Non oil GDP growth GDP Per Capita (real 2015 US$) Non-oil Potential GDP growth GDP Per Capita i n 2019 (real 2015 US$) Pre-Pandemic Non Oil GDP Growth Average Level (2011-2019) Figure 9:  Non-Oil Real and Potential GDP Figure 10:  GDP per capita in Cameroon Moving away from SND30's targets 10 9,5 9,5 9,2 8,8 9 9 8,5 8 7,6 7,0 7 6 5,5 5 4,5 4 4,2 3,7 3,8 3,9 4 3,5 3,3 3,2 3,5 3 2 1 0,3 0 2019 2020 2021 2022 2023 2024e 2025f 2026f 2027f 2028f Actual GDP Growth SND3 0 projections Forecasted GDP Growth Figure 11:  Moving away from SND30’s growth targets FAO Food Price Inflation YoY 50,0 40,0 30,0 20,0 10,0 0,0 -10,0 -20,0 -30,0 2021-01 2021-03 2021-05 2021-07 2021-09 2021-11 2022-01 2022-03 2022-05 2022-07 2022-09 2022-11 2023-01 2023-03 2023-05 2023-07 2023-09 2023-11 2024-01 2024-03 2024-05 2024-07 2024-09 2024-11 2025-01 2025-03 Figure 12:  FAO Food Price Inflation YoY (percent) Source: Cameroon National Institute of Statistics, World Bank Staff estimates Cameroon 2025 Economic Update Fourth Edition  |  15 Figure 13: Inflation dynamics (in percent) in Figure 14: Average and Year-on-Year Headline Cameroon Inflation 10,0 9,0 8,0 8,0 7,0 6,0 6,0 4,0 5,0 4 ,0 2,0 3,0 0,0 2,0 dic-20 oct-21 dic-21 oct-22 dic-22 oct-23 dic-23 oct-24 dic-24 feb-21 jun-21 ago-21 feb-22 jun-22 ago-22 feb-23 jun-23 ago-23 feb-24 jun-24 ago-24 feb-25 abr-21 abr-22 abr-23 abr-24 1,0 0,0 jun-24 dic-20 oct-21 dic-21 oct-22 dic-22 oct-23 dic-23 jun-21 ago-21 jun-22 ago-22 jun-23 ago-23 oct-24 dic-24 ago-24 feb-21 abr-21 feb-22 abr-22 feb-23 abr-23 feb-25 feb-24 abr-24 Headline Inflation, Year on Year Change Locally Produced Goods Inflation Headline Inflation, Year on Year Change Headline Inflation, Year Average Imported Goods Inflation Figure 13: Inflation dynamics (in percent) in Cameroon Figure 14:  Average and Year-on-Year Headline Inflation Figure 15: Contribution of CPI sub-items to year-on-year headline inflation in Cameroon 10,0 8,0 6,0 4,0 2,0 0 ,0 oct-21 dic-21 oct-22 dic-22 oct-23 dic-23 oct-24 dic-24 jun-21 ago-21 jun-22 ago-22 jun-23 ago-23 jun-24 ago-24 dic-20 feb-21 abr-21 feb-22 abr-22 feb-23 abr-23 feb-24 abr-24 feb-25 Food Housing-Water-Power-Gas Transportation Clothing Others Figure 15:  Contribution of CPI sub-items to year-on-year headline inflation in Cameroon Figure 16: Regional Dispersion of YoY Inflation 1,46 1,44 1,45 1,42 1,40 1,41 1,38 1,36 1,34 1,36 1,32 1,33 1,30 1,28 1,26 2021 2022 2023 2024 Figure 16:  Regional Dispersion of YoY Inflation (Standard deviation between regional capital cities inflation) 16  |  Cameroon 2025 Economic Update Fourth Edition 1.3 External Sector: the current account deficit narrowed due to cyclical factors Significant increases in cocoa bean prices more than compensated for the decline in oil production in 2024, leading to narrower trade and current account deficits. Recent trends in the trade balance have been primarily influenced by the unprecedented rise in cocoa bean prices. The revenue from cocoa bean exports doubled nominally in 2024, reaching 3.2 percent of GDP, up from 1.8 percent the previous year. Despite increased price volatility in international markets over the past year, cotton exports improved due to better yields and efforts to combat smuggling along the northern border. The positive performance of cocoa beans and cotton has offset the decline in oil and gas production and exports, which negatively impacted export revenues by 1.0 percentage point of GDP in 2024. Cameroon remains a net hydrocarbon exporter. However, when considering only oil without gas exports, it became a net oil importer in 2024. The decline in wood and its derivatives exports, which began ten years ago, persisted in 2024 due to structural factors such as smuggling, illegal exports, and measures implemented in the 2024 budget to increase the log export tax from 50 percent to 75 percent. These measures aim to prepare the country for the log export ban scheduled for 2028 and ensure sufficient supply for local wood processing units. Wood exports, which accounted for 1.5 percent of GDP in 2015 and 1.0 percent in 2023, now represent 0.8 percent of GDP in 2024. The ratio of goods exports to GDP increased to 13.2 percent in 2024, up from 12.9 percent the previous year. However, this short-term improvement conceals a long-term decline in goods exports from 19.1 percent of GDP in 2012. Factors such as internal crises, the ongoing decline in hydrocarbon production, productivity constraints, trade barriers, and limited access to technology and finance may explain this trend. The import bill decreased slightly in 2024 to 20.1 percent of GDP from 20.9 percent in 2023, primarily due to lower import prices and domestic factors. Oil imports, the largest single item, fell to 3.4 percent of GDP in 2024 from 4.2 percent of GDP in 2023. The two successive pump price hikes in 2023 and 2024 reduced fuel demand, with vehicle imports and related derivatives dropping to 0.9 percent of GDP from 1.3 percent in 2023, the lowest level in ten years. Food imports increased to 4.0 percent of GDP in 2024, up from 3.3 percent 3.8 percent in 2023. The impact of the industrial policy focused on domestic production of key staple goods remains to be observed and will likely be delayed. Machinery imports, heavily subsidized, rose to 2.5 percent of GDP in 2024 from 2.2 percent in 2019, yet without significant impact on value creation. Rice imports reached a ten-year peak in 2024, at 1.0 percent of GDP. Wheat imports remained stable despite recent initiatives to enhance local production to protect the domestic economy from supply chain disruptions. Sugar imports were 0.4 percent of GDP in 2024, representing four times the pre-pandemic level. Trade deficit decreased by 0.6 percentage points of GDP in 2024, while the current account deficit declined from 4.1 in 2023 to 3.4 percent of GDP percent in 2024. The service balance remained broadly stable, and the primary income balance saw a slight improvement due to reduced dividends paid to foreign investors. However, there was a slight decrease in the net current transfers surplus, attributed to a reduction in remittance inflows. The capital and financial accounts improved as the government financed a significant portion of rising public capital expenditures with external financing. Disbursements represented 4.0 percent of GDP in 2024, up from 2.3 percent the previous year. Cameroon 2025 Economic Update Fourth Edition  |  17 Over the past two decades, Cameroon’s economy has seen a decline in the complexity of its export items, as evidenced by its drop from the 94th to the 120th position on the Economic Complexity Index (ECI). This decline indicates a shift towards less diversified and technologically sophisticated exports, which could impact the country’s long-term economic growth and resilience. The reduction in economic complexity may also reflect challenges in developing higher-value industries and integrating into global value chains. Addressing these issues will be crucial for Cameroon to enhance its economic stability and achieve sustainable development in line with the SND30. 18  |  Cameroon 2025 Economic Update Fourth Edition Table 1:  Cameroon Export and Import main items (percentage of GDP) 2015 2016 2017 2018 2019 2020  2021  2022  2023 2024 Exports of goods and 20.9 18.5 18.1 18.3 19.5 15.0 16.6 19.4 17.0 17.0 services Exports of Goods 16.2 13.6 12.8 13.0 13.9 10.8 13.1 15.6 12.9 13.2 Oil 5.6 3.9 3.9 4.1 4.4 2.7 3.9 5.5 4.1 3.4 Gas 0.0 0.0 0.0 0.6 1.1 0.8 1.0 2.3 1.5 1.2 Cocoa and its derivatives 2.7 2.3 1.5 1.4 1.6 1.4 1.6 1.7 1.8 3.2 Wood and its derivatives 1.5 1.4 1.4 1.4 1.2 1.1 1.2 1.1 1.0 0.8 Cotton 0.5 0.4 0.5 0.5 0.6 0.5 0.6 0.6 0.5 0.6 Exports of Services 4.7 4.9 5.3 5.3 5.6 4.2 3.5 3.8 4.1 3.8 Imports of goods and -24.2 -20.9 -20.0 -21.1 -22.9 -17.6 -20.1 -22.1 -20.9 -20.1 services Imports of Goods 17.4 14.3 13.3 14.3 15.8 12.5 14.6 16.3 15.7 15.2 Fish 0.9 0.8 0.5 0.7 0.6 0.6 0.5 0.7 0.6 0.5 Wheat 0.5 0.5 0.5 0.5 0.6 0.6 0.7 0.9 0.6 0.7 Rice 1.0 0.7 0.9 0.6 1.0 0.7 0.8 1.0 0.7 1.0 Sugar 0.1 0.1 0.2 0.1 0.1 0.1 0.1 0.2 0.3 0.4 Other Imported Foods 1.4 1.2 1.2 1.2 1.2 1.2 1.3 1.7 1.7 1.3 Imported Foods 3.8 3.3 3.3 3.2 3.5 3.2 3.6 4.5 3.9 4.0 Clinkers 0.3 0.4 0.4 0.4 0.5 0.4 0.4 0.5 0.3 0.3 Oil 3.8 2.5 2.5 3.3 4.4 2.5 2.8 4.2 4.2 3.4 Medicines 0.7 0.5 0.6 0.6 0.6 0.6 0.8 0.6 0.6 0.5 Other Chemical products 1.5 1.1 1.1 1.3 1.1 1.1 1.1 1.2 1.3 1.1 Plastic and rubber 0.8 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.7 0.7 Papers 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 Textiles 0.6 0.5 0.4 0.4 0.4 0.4 0.3 0.4 0.3 0.4 Metallic products 1.3 1.2 1.0 1.1 1.1 1.2 1.5 1.3 1.2 1.0 Machineries 2.8 2.9 2.3 2.3 2.2 1.7 1.9 1.9 2.3 2.5 Vehicles and derivatives 1.4 1.1 1.1 1.0 0.9 0.8 1.1 1.1 1.3 0.9 Imports of Services 6.8 6.7 6.7 6.8 7.1 5.1 5.5 5.6 5.2 5.0 Goods Balance -1.2 -0.7 -0.6 -1.3 -1.9 -1.7 -1.6 -0.7 -2.8 -2.0 Services Balance -2.1 -1.8 -1.4 -1.5 -1.6 -0.9 -1.9 -1.8 -1.1 -1.2 Net Hydrocarbon Exports 1.8 1.4 1.4 1.4 1.2 1.0 2.2 3.7 1.4 1.2 Net Oil Exports 1.8 1.4 1.4 0.8 0.1 0.3 1.1 1.4 0.0 -0.1 Sources: Cameroon National Institute of Statistics, World Bank Staff Estimates. Cameroon 2025 Economic Update Fourth Edition  |  19 Figure 17: Cameroon's Trade Balance 25,0 20,0 3,8 15,0 3,5 4,1 3,6 4,2 10,0 15,6 13,1 12,9 13,2 5,0 10,8 0,0 -2,7 -3,5 -2,5 -3,2 -5,0 -3,9 -12,5 -14,6 -16,3 -15,7 -15,2 -10,0 -15,0 -5,1 -5,5 -5,2 -4,9 -20,0 -5,6 -25,0 2020 2021 2022 2023 2024e Exports of Goods Exports of Services Imports of Goods Imports of Services Trade Balance Figure 17:  Cameroon’s Trade Balance Figure 18: Cameroon Current Account Deficit 3,0 2,0 1,0 1,6 1,8 1,5 1,0 1,1 0,0 -1,0 -2,1 -1,6 -2,0 -1,7 -2,5 -2,0 -3,0 -2,7 -3,5 -3,4 -3,2 -3,4 -4,0 -3,7 -4,0 -2,5 -3,9 -4,1 -5,0 -6,0 -7,0 2020 2021 2022 2023 2024e Primary Income Secondary Income Trade Balance Current Account Balance Figure 18:  Cameroon’s Current Account Balance 4,7 3,8 3,2 2,5 1,7 0,2 0,3 0,5 0,6 0,3 -3,7 -3,4 -3,4 -4,0 -4,1 2020 2021 2022 2023 2024E Current Account Balance Capital Account Balance Financial Account Balance Figure 19:  Cameroon Capital and Financial Accounts of the BoP Sources: Cameroonian authorities, World Bank Staff estimates. 20  |  Cameroon 2025 Economic Update Fourth Edition 1.4 Fiscal Accounts and Debt: Fiscal Slippage and Slight Increase in Public Debt. The overall fiscal deficit widened to 1.5 percent of GDP in 2024, up from 0.7 percent of GDP one year ago, due to slippages in current expenditures and weaker than expected revenue performance. The overall fiscal deficit was previously estimated to drop to 0.4 percent in 20248 due to an increased revenue to GDP ratio and the positive impact of the partial phasing out of fuel subsidies. However, middling revenue performance and the use of fiscal space created by the partial removal of fuel subsidies to increase expenditure on goods and services led to substantial fiscal slippages in 2024. The primary balance became negative again in 2024 at -0.3 percent of GDP, down from 0.4 percent one year ago. The non-oil primary deficit remained stable at 2.6 percent of GDP. Compared to the previous estimates of the overall fiscal deficit of 0.4 percent of GDP9 , the fiscal slippage is estimated at 1.1 percent of GDP, which is mostly explained by weaker revenue performance (72 percent), especially non-oil revenue (45 percent). Expenditures explain 28 percent of the fiscal slippage with the spectacular rise in current expenditures. In 2024, revenue performance was weaker than expected, even though the revenue to GDP ratio increased slightly. Oil revenue continued to drop in 2024, to 2.2 percent of GDP from 2.9 percent in 2023. New budget measures were introduced in the 2024 finance law to boost non-oil tax revenue in order to counter this trend in oil revenue, especially tax administration reforms aimed at expanding the tax base, simplifying and digitizing procedures across all facets of tax management, introducing electronic invoicing, signing collaboration protocols with third parties to facilitate the exchange of information, further strengthening compliance risk assessment, and facilitating the detection of fraud, including the misreporting of financial information, income, and wealth. Non-oil tax revenue was expected to climb in 2024 by 0.4 percent of GDP. However, many taxes remained at their 2023 level as percentage of GDP. Taxes on goods and services remained unchanged at 7.2 percent of GDP, despite the rise in VAT revenue by 0.2 percent of GDP which offset the decline in revenue coming from the special tax on oil products and registration and stamp fees. Non-oil direct taxes followed the same trend, remaining at 3.2 percent of GDP in 2024, like in 2023, with a strong performance of CIT revenue due to the new electronic invoicing system, offsetting the decline in other direct taxes. PIT revenue remained unchanged, despite reforms to broaden the tax base and enforce tax reporting by individuals. Challenges persist in broadening the tax base due to significant tax expenditures, a large informal sector, and low personal income tax yields10. Cameroon heavily relies on regressive indirect taxes, with most of its tax revenue originating from indirect sources, primarily value added tax (VAT). In 2024, indirect taxes, including VAT, excises, special taxes on petroleum products, international trade taxes, forest taxes, registration, and stamp fees, constituted nearly 70 percent of the total tax revenue. VAT alone contributed over 35 percent of tax revenue in 2024, primarily from domestic consumption. In contrast, direct taxation, notably income tax, remained stagnant at 30 percent of tax revenues. Cameroon’s international trade taxes, despite having higher customs duty rates compared to most low and middle-income countries in Sub-Saharan Africa (LMICs in SSA), accounted for about 1.6 percent of GDP or 13.2 percent of total tax revenue in 2024, displaying an upward trend. Other LMICs in SSA collected about 2.9 percent of GDP from trade taxes, with the SSA average at 2.5 percent of GDP. 8 April 2025 Macro Poverty Outlook for Cameroon 9 April 2025 Macro Poverty Outlook for Cameroon 10 Under the Program for Results Operation, authorities committed themselves to boost tax revenue until 2029 by 0.3 percent of GDP per year through: (i) the digitalization of entire tax functions and the interoperability between public finance information system that will support tax base broadening efforts, (ii) Expanding the scope of electronic invoicing system to SMEs to reduce informal sector. Cameroon 2025 Economic Update Fourth Edition  |  21 Total government spending remained stable at 17.4 percent of GDP in 2024. The 2024 finance law introduced measures to limit waste of resources and included off-budget expenditures11 in the budget. Current expenditure remained broadly stable at 13.3 percent GDP, despite the partial phasing out of fuel subsidies in February 2023 and March 2024 which brought fuel subsidies down from 3.6 percent of GDP to 0.6 percent of GDP. The freed fiscal space was used to substantially increase other current expenditure items like the purchase of goods and services, security expenditures, wages and salaries. Wages and salaries rose to 4.9 percent of GDP in 2024 up from 4.7 percent to settle part of the large teachers’ wage arrears and mitigate fuel price impacts on civil servants. The purchase of goods and services climbed to 4.1 percent of GDP, up from the 2024 revised finance law estimate of 3.3 percent of GDP and authorities’ end of year estimate was at 2.8 percent of GDP. The increase in goods purchases crowded out capital investment expenditures which slightly dropped. Ownership expenditures climbed to 0.4 percent of GDP to bail out some State-Owned Enterprises. Infrastructure received the largest budget share (15.9 percent) of any sector , underscoring the commitment to complete major projects and rehabilitate infrastructure across various sectors. Education ranked second (13.6 percent), focusing on improving educational outcomes. Significant allocations were also made to sovereignty, governance, and general administration (4.0 percent), and security and defense (6.2 percent in 2024). While the budget share for social sectors remained constant in 2024, the 2025 budget law shows slight improvements. Public expenditure in the education sector will rise to 3.3 percent of GDP in 2025 from 3.2 percent in 2024, below the low middle-income countries’ average of 4.1 percent , and the international target set in the Incheon Declaration of 4%- 6% of GDP. The share of public health expenditures in government expenditures will increase to 5.9 percent in 2025 from 4.9 percent in 2024, which is below the Abuja recommendation of allocating at least 15 percent of the government budget to the health sector. Due to transfers of competencies to the region in specific sector12, budget allocation to local governments increased by 5.2 percent, supporting service delivery at the local level. Wages and salaries remained at 27 percent of total public spending in 2024 to settle teachers’ salary arrears and mitigate fuel price impacts on civil servants. The same level is expected for 2025 due to automatic career advancements and continued salary arrears settlement. The 2025 budget law significantly cut allocations for common budget chapters from 19.4 percent of total expenditures in 2024 to 10 percent in 2025, targeting 5 percent by 2026. Gross external financing and new arrears remained the primary deficit financing sources in 2024. The substantial increase in gross external financing to 3.3 percent of GDP, up from 1.9 percent in 2023, facilitated the financing of the elevated fiscal deficit. New arrears accumulated in 2024 rose to 2.4 percent of GDP, contributing to the deterioration of domestic companies’ balance sheets. The contribution of new arrears to financing the cash-based fiscal deficit is problematic, as it suggests that Cameroon would not adhere to one of the four multilateral surveillance benchmarks on non- accumulation of arrears, resulting in a higher weight of Cameroonian public securities in banking sector risk-weighted prudential indicators. Another adverse outcome is an increased risk premium on Cameroonian sovereign bonds, as observed since 2022, when interest rates on Cameroonian bonds tripled, aligning with the average rate of other CEMAC countries in a context of heightened uncertainties. The accumulation of new arrears also indicates significant liquidity pressures faced by the Cameroon Treasury, primarily due to off-budget expenditures and various budget inefficiencies. In 2024, the government implemented significant debt management operations to limit the accumulation of arrears, settling substantial domestic debt and enacting the 2025 budget law. This law allocates fund to clear unpaid obligations and off-budget expenditures, which have driven 11 Like transfers to the power company. 12 The provision of public goods, especially infrastructure, in some areas is insufficient for accelerating medium-term growth 22  |  Cameroon 2025 Economic Update Fourth Edition Treasury advances, and reduce common budget chapters, a significant source of budget inefficiencies, and converting them into ministry-specific allocations. Government securities outstanding slightly decreased to 6.0 percent of GDP from 6.1 percent in 2023, reflecting Cameroon Treasury’s challenges in raising funds in the regional security market due to higher borrowing costs13, particularly for medium- and long-term maturity securities14. Consequently, the composition of outstanding securities shifted, with a higher share for short-term bonds (1.5 percent of GDP at the end of December 2024, up from 0.8 percent at the end of 2022) compared to medium- and long-term securities (4.5 percent of GDP, down from 4.8 percent over the same period). The overall level of public debt increased in 2024 to finance higher primary deficit. Preliminary estimates indicate that by the end of December 2024, the total public and publicly guaranteed (PPG) debt stood at approximately 46.8 percent of GDP, dropping from 46.1 percent of GDP at the end of 2023. Debt coverage has expanded since 2023 to include the government’s and state-owned enterprises’ (SOE)’s floating debt, comprising domestic arrears accumulated over the period 2000-201915, explaining the significant rise in public debt between 2022 and 2023. Authorities have improved the debt reporting comprehensiveness, particularly for SOE debt, supported by the International Development Association (IDA)’s Sustainable Development Finance Policy (SDFP) Performance and Policy Actions (PPA). In 2024, external debt stock was estimated at 29.7 percent of GDP, while the domestic debt represented 17.6 percent of GDP. Government bond issuance has increased, reaching 54.1 percent of the domestic general government debt as of December 2024 against 45.0 percent three years ago. The share of outstanding Treasury payments is declining, accounting for 14.3 percent of the domestic public debt as of December 2024 compared to 19.1 percent in 2022. Cameroon’s debt strategy has aimed to extend the average maturity of public debt, leading to a rise in the share of multilateral debt in general government’s external debt. This proportion reached 49.4 percent in December 2024, compared to 36.7 percent at the end of 2019. The stock of contracted-but-undisbursed debt (SENDs) is still growing, rising to 15.0 percent of GDP at end December 2024, up from 14.6 percent in 2023 and 14.3 two years ago. Contingent liabilities, for which the monitoring has started recently, plummeted in 2024 to 15.7 percent of GDP from 16.5 percent in 2023. Cameroon’s public debt management has been improving over time, but there is a need for further enhancements. All project financing proposals and projects funded through Public-Private Partnerships (PPPs) undergo scrutiny by the National Public Debt Committee (CNDP), and approval for new loan agreements is granted only upon unconditional approval. Procedures and responsibilities for loan operations and public debt management were clarified in a manual published in 2019. However, CNDP’s involvement often occurs late in the debt contracting process, and Cameroon’s debt policy lacks a firm anchor in its medium-term debt management framework. This has led to significant discrepancies between announced plans and actual financing. On the positive side, CNDP’s scope has expanded to cover all domestic and external borrowing, bond issuances, innovative financing, SOEs loans, and PPP contracts contracted by the State. This includes public companies and public establishments. Further efforts are required to strengthen CNDP’s active engagement and enhance the effectiveness of the medium-term public debt strategy (MTDS). This includes improving estimates of financing needs, developing consistent and realistic annual borrowing plans, and implementing an enhanced communication strategy to facilitate investors’ understanding of the authorities’ debt management objectives.  13 Originating from restrictive monetary policy stance, accumulation of arrears, high inflation and tight international financial conditions. 14 For challenges 15 Audits of government payment arrears for the period 2000-2019 have been finalized, and a clearance plan in coherence with the viability of public debt has been published in 2024. Cameroon 2025 Economic Update Fourth Edition  |  23 Figure 20: Government Revenues 18,0 18,0 16,0 16,0 14,0 14,0 12,0 12,0 Percent of GDP Billions of XAF 10,0 10,0 8,0 8,0 6,0 6,0 4,0 4,0 2,0 2,0 0,0 0,0 2020 2021 2022 2023 2024e Tax revenues Non-tax revenues Grants Total revenues (RHS) Figure 20:  Cameroon Total Government Revenues and Grants Figure 21: Government Expenditures 20,0 17,6 17,4 15,0 17,2 Percent of GDP Billions of XAF 17,0 10,0 16,8 5,0 16,6 16,4 0,0 16,2 2020 2021 2022 2023 2024e Capital expenditures Wages and salaries Goods and servi ces Subsidies and transfers Interest payments Total Expenditures (RHS) Figure 21:  Figure 22: Cameroon Total Government Expenditures 24  |  Cameroon 2025 Economic Update Fourth Edition Figure 22: Overall Fiscal Balance and Public Debt 50,0 0,0 45,0 -0,5 40,0 35,0 -1,0 Peercent of GDP Percent of GDP 30,0 -1,5 25,0 20,0 -2,0 15,0 -2,5 10,0 -3,0 5,0 0,0 -3,5 2020 2021 2022 2023 2024e GG External Public Debt (LHS) GG Domestic Public Debt (LHS) Overall Fiscal Balance (RHS) Figure 22:  : Cameroon Overall Fiscal Balance and Public Debt Gross External Financi ng Net Domestic Financing New Arrears 4,6 4,4 3,3 3,2 2,6 2,4 2,2 2,0 2,0 1,9 1,9 1,6 1,2 1,1 0,3 0,3 -0,2 -0,3 2019 2020 2021 2022 2023 2024E Figure 23:  Cameroon Cash basis Fiscal Deficit Financing (in percentage of GDP) Sources: Cameroonian Authorities, World Bank Staff estimates Cameroon 2025 Economic Update Fourth Edition  |  25 Cameroon Public Debt Service 0,9 2,5 0,8 0,7 2,0 0,6 1 ,5 0,5 0,4 1 ,0 0,3 0,2 0,5 0,1 0,0 0,0 201 9 2020 2021 2022 2023 2024 Interest payments on external public debt Interest payments on domestic public debt Amortization of external public debt (RHS) Figure 24:  Cameroon Cash basis Fiscal Deficit Financing (in percentage of GDP) Sources: Cameroonian Authorities, World Bank Staff estimates Table 2:  Debt Reporting Heat Map Data Instrument Sectorial Information Periodicity Time Debt Annual Additional accessibility coverage coverage on recently lag Management Borrowing Statistics / contracted Strategy Plan Memo Items external loans 2024 2013 2022 2021 2020 Sources: World Bank, https://www.worldbank.org/en/topic/debt/brief/debt-transparency-report Notes: 1- Insufficient 2- Limited 3- Partial 4- Full 26  |  Cameroon 2025 Economic Update Fourth Edition 1.5 Monetary aggregates and Financial Sector Soundness Despite the Regional Central Bank maintaining its key rates at high levels in 2024, broad money expanded by 9.8 percent, primarily driven by robust growth in credit to the private sector. Net claims on the central government decreased by 15.7 percent due to two main factors: (i) the authorities’ debt management operations which involved borrowing from international markets to settle domestic arrears and debt, and (ii) higher borrowing costs in the regional securities market combined with reduced bank participation in securities issuance operations (falling to 22.9 percent of authorized banks from 27.7 percent) . This led to a slight decline in outstanding government securities as a percentage of GDP from 6.1 percent to 6.0 percent. Domestic credit to non-financial private sector surged in 2024, growing by 15.4 percent and reaching 20.0 percent of GDP at the end of 2024, up from 13.5 percent in 2019 and 16.2 percent at the end of 2023. This increase financed investments facilitated by improved power supply and those attracted by elevated prices. The simultaneous rise in both credit supply and demand made this possible. As the government repaid a substantial amount of domestic arrears in 2024, estimated between 1.5-2 percent of GDP, domestic companies experienced relief from severe liquidity pressures and an improvement in their balance sheets, thus enhancing their creditworthiness and increasing credit demand. On the supply side, two banks commenced operations in Cameroon in 2024, consequently boosting credit supply. The stability of Cameroon’s banking system has been strengthened with a reduction in non- performing loans (NPL) in 2024. The number of banks failing to meet the risk coverage prudential ratio halved from four in 2023 to two, yet solvency risks persist within Cameroon’s banking sector and the CEMAC region overall. Contributing factors include (i) inadequate governance and risk management frameworks within commercial banks, and (ii) the ongoing accumulation of government arrears, which adversely affects companies’ balance sheets. The CEMAC Banking Commission (COBAC) has recently mandated that each commercial bank establishes (i) a plan to address non-performing loans, and (ii) a credible strategy to enhance credit risk management. As a result, official estimates indicate that by the end of December 2024, the NPL ratio for Cameroonian banks reduced to 13.5 percent from 14.8 percent in 2023 and 15.6 percent in 2022. There are growing concerns regarding commercial banks’ concentration and exposure to sovereign risk. Bank exposure to sovereign risk remains elevated, at more than one third of the Cameroonian banking system’s total assets17 at the end of 2023, compared to only 10 percent at the end of 2015, due to increased governmental recourse to the regional securities market to finance fiscal deficits. Cameroonian banks buy not only Cameroonian Treasury securities but also the other five CEMAC countries’ Treasuries’ securities, raising potential risks from heavy exposure to governments facing fiscal slippages and debt issues. Additionally, liquidity mismatches arise when banks use sight deposits to purchase medium- and long-term securities, and the illiquidity of the secondary regional securities market poses threats to financial stability within the CEMAC. In October 2024, the CEMAC’s Banking Commission began enforcing a regulatory framework for concentration and exposure to sovereign risk by applying risk weights on government bonds based on compliance with regional surveillance indicators (average inflation less than three percent, public debt to GDP ratio less than 70 percent, reference fiscal balance, and non-accumulation of arrears). This measure ensures that only banks with adequate resources can assume additional risks on sovereign bonds, resulting in decreased participation rates in bond issuance operations to 22.3 percent and 16.1 percent in January and February 2025, respectively, 17 This is the most recent estimate. Cameroon 2025 Economic Update Fourth Edition  |  27 from 25.3 percent in February 2024 and 31.0 percent in February 2023. Governments and BEAC have also started enforcing the requirement for banks to sell a minimum share of government bonds to other private economic actors. Continued focus on enhancing the CEMAC financial regulatory framework, improving liquidity management, and diversifying the investor base will be essential for addressing the concerns related to sovereign risk exposure. Anticipated challenges include managing the liquidity of the secondary regional securities market and ensuring compliance with regional surveillance indicators.   28  |  Cameroon 2025 Economic Update Fourth Edition Table 3:  Cameroon Macroeconomic Dashboard 2022 2023 2024e 2025p 2026p 2027p 2028p Real economy: annual percent change, unless indicated otherwise Real GDP  3.7 3.2 3.5 3.7 3.8 3.9 4.1 GDP per capita (real 2015 USD) 1.0 0.6 0.9 1.1 1.2 1.4 1.6 CPI Change (percent, period 6.3 7.4 4.5 3.7 3.2 3.0 3.0 average)  CPI Change (percent, end of period) 7.3 5.9 5.0 Contributions to real GDP growth – Demand Side (percentage points) Private consumption 3.2 2.6 2.4 2.4 2.6 2.6 2.7 Government consumption -0.7 0.3 1.2 0.6 0.3 0.2 0.3 Gross fixed private investment 2.1 0.9 0.3 1.2 1.2 1.8 1.7 Gross fixed public investment 0.0 -0.3 -0.1 0.2 0.3 0.5 0.6 - Net exports 0.7 -0.3 -0.2 -0.6 -0.6 -1.2 -1.2 Contributions to real GDP growth – Supply Side (percentage points) Agriculture 0.6 0.4 0.7 0.5 0.5 0.6 0.7 Industry 0.8 0.6 0.6 0.7 0.8 1.0 1.4 Of which non-oil Industry 0.7 0.7 0.9 0.8 0.8 1.0 1.2 Services 2.0 1.9 2.0 2.2 2.2 2.0 1.7 Fiscal accounts (percent of GDP) Overall balance  -1.1 -0.7 -1.5 -2.0 -2.0 -1.9 -1.8 Primary balance  -0.4 0.4 -0.3 -0.7 -0.7 -0.6 -0.4 Total revenue and grants  16.1 16.8 15.9 15.9 15.9 16.0 16.3 Tax revenues  12.3 13.3 12.9 12.9 13.1 13.3 13.6 Personal Income Tax (PIT) 1.1 1.0 1.0 1.1 1.2 1.2 1.3 Corporate Income Tax (CIT) 2.4 2.6 2.5 2.4 2.4 2.5 2.6 Of which Oil CIT 0.7 0.8 0.5 0.4 0.3 0.3 0.4 Non-Oil CIT 1.7 1.8 2.0 2.0 2.1 2.2 2.2 Other Direct Taxes 0.2 0.4 0.2 0.2 0.2 0.2 0.2 Taxes on Goods and Services 6.6 7.2 7.2 7.2 7.3 7.4 7.5 Taxes on International Trade 1.5 1.6 1.6 1.6 1.6 1.6 1.6 Social Contributions 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Other Taxes 0.3 0.3 0.2 0.2 0.2 0.2 0.2 Cameroon 2025 Economic Update Fourth Edition  |  29 Table 3:  Cameroon Macroeconomic Dashboard (Continued) 2022 2023 2024e 2025p 2026p 2027p 2028p Non-Tax Oil Revenues 2.8 2.1 1.7 1.6 1.5 1.4 1.5 Non-Tax Revenues 0.6 1.0 1.0 1.1 1.1 1.1 1.1 Grants  0.4 0.5 0.3 0.3 0.2 0.2 0.2 Expenditures  17.3 17.4 17.4 17.9 18.0 18.0 18.1 Current expenditures  12.2 13.4 13.3 13.6 13.5 13.2 13.0 Wages and salaries 4.2 4.7 4.9 5.0 4.9 4.8 4.7 Goods and services 3.1 3.8 4.1 4.2 4.1 3.9 3.8 Subsidies and transfers 4.1 3.9 3.1 3.1 3.1 3.1 3.1 Interest payments  0.8 1.0 1.2 1.3 1.3 1.4 1.4 Capital expenditures  4.6 3.9 4.1 4.3 4.5 4.8 5.1 General Government Debt (1) 43.3 42.5 43.5 44.7 42.1 42.1 41.6 Public Debt (2) 43.3 46.1 46.8 47.9 48.2 48.4 48.3 External Debt 29.5 28.5 29.7 31.0 30.3 29.4 28.5 Central Government 29.5 26.8 28.1 29.4 28.7 27.9 27.0 State-Owned Enterprises 1.7 1.6 1.6 1.6 1.5 1.5 Domestic Debt 13.8 17.6 17.1 16.9 17.9 19.0 19.8 Central Government 13.8 15.7 15.3 15.3 16.3 17.5 18.3 State-Owned Enterprises 1.9 1.7 1.6 1.6 1.5 1.5 Monetary aggregates (annual percent change) Broad money (M2) 12.3 3.2 9.8 12.7 12.2 10.9 10.5 Credit to the private sector 15.0 17.8 14.3 12.4 12.5 9.4 9.2 Net Claims on Central Government 7.4 11.8 -15.7 2.4 -3.2 -2.7 -0.9 Balance of Payments (percent of GDP) Current Account Balance  -3.4 -4.1 -3.4 -4.0 -4.0 -4.3 -3.9 Trade Balance -2.5 -3.9 -3.2 -3.8 -3.5 -3.6 -3.2 Exports of goods and services  19.4 17.0 17.0 16.2 16.5 16.6 17.1 Imports of goods and services  21.9 20.9 20.2 20.0 20.0 20.2 20.3 Remittances (Net Inflows) 1.3 1.5 1.4 1.4 1.7 1.5 1.5   Other memo items  Nominal GDP (USD millions) 44,676 49,538 52,859 57,103 61,638 66,287 71,662 Note: e: estimated; p: projected 1. General government is equal to central government debt as subnational government debt is negligeable and social security institutions’ debt is equal to zero. 2. Public debt comprises general government debt and SOE’s foreign and domestic debt. Sources: National authorities, IMF, World Bank Estimates and Projections, Regional Central Bank (BEAC), April 2025 30  |  Cameroon 2025 Economic Update Fourth Edition 2. Medium Term Economic Outlook 2.1 Global and Regional Economic Outlook Global economic activity is expected to slow while SSA growth is forecast to slightly increase in 2025. Global growth is projected to slow to 2.2 percent in 2025, down from an estimated 2.8 percent in 2024, amid rising trade uncertainty. Ongoing moderating inflation and easing monetary policy should support growth. However, heightened uncertainty in trade, fiscal, monetary, and regulatory policies are a key risk for the world. Countries imposing or facing higher tariffs could suffer direct losses, while others could experience collateral damage due to subdued demand from trading partners and imported inflation in the context of trade fragmentation, prompting central banks to maintain higher interest rates, affecting global consumption and investment. Moreover, the potential escalation of conflicts in Ukraine and the Middle East adds uncertainty, as the world is witnessing the highest number of conflicts since World War II18. Despite global trade uncertainty and foreign aid reduction, growth in SSA is expected to increase in 2025, supported by easing financial conditions and further declines in inflation. SSA growth is expected to increase to 3.7 percent in 2025. A gradual easing of policy interest rates should improve private consumption and investment. However, high debt levels and borrowing costs would continue to constrain the fiscal space. In CEMAC, growth should slow down to 2.4 percent in 2025, reflecting lower projected oil prices and a decline in export demand from key trade partners, as Europe and China absorb around 60 percent of regional exports. Also, fiscal risks are increasing for CEMAC due to prospects of a sustained decline in oil prices, already observed in April 2025. Overall, SSA faces strong risks like persistently high risks of defaults due to weak fiscal positions and worsening security conditions, such as in Sudan, parts of the Sahel, DRC, and in regions within CAR and Cameroon. 2.2 Domestic Growth and Inflation Outlook The medium-term outlook is moderately positive, projecting an average real GDP growth of 3.9 percent from 2025 to 2028. The commissioning of the Nachtigal hydropower plant, which began to inject power into the grid in June 2024, with full commissioning since March 2025, along with the completion of transmission lines towards Douala’s industrial zones, will contribute an additional 420 MW (30 percent of the country’s total energy generation) to alleviate energy supply shortages and stimulate manufacturing activities. Furthermore, the construction sector will benefit directly from increased public investment in the medium-term, leading to positive spillover effects on other economic sectors, particularly the service sector. The projections account for the impacts of ongoing trade disruptions, resulting in a slight decrease in medium-term GDP growth by 0.1 percentage point due to reduced global demand, lower oil prices, and decreased government oil revenue, which negatively affect public investment and growth. Nevertheless, the authorities’ firm commitment to increasing non-oil tax revenue by 1.5 percent of GDP until 2029 may help mitigate the adverse impact of this trade shock on medium-term 18 World Bank. 2025. Global Economic Prospects. January 2025 Cameroon 2025 Economic Update Fourth Edition  |  31 growth by ensuring adequate domestic revenue-based financing for public investment. Sustaining high levels of public and private investment will be crucial to achieving a 4.1 percent real GDP growth by 2028. Average inflation is expected to continue declining, reaching the 3 percent target by 2027. Underlying inflation19, which serves as an early-warning indicator of headline inflation, is continuously cooling and reached 3.0 percent in 2024, down from 5.8 percent in 2023. This trend suggests that headline inflation will continue to decrease in the medium term. Imported prices are expected to keep dropping, albeit at a slower pace than previously anticipated due to recent trade disruptions. These disruptions may exacerbate supply chain issues20, and higher import tariffs affecting intermediate goods could lead to increased inflation in major economies worldwide, thereby contributing to global inflation. Moreover, the recent significant increase in investment aimed at harnessing the additional energy supply from the Nachtigal hydroelectric power dam has not been fully reflected in actual value creation due to delays in investment implementation and ongoing issues in the power sector (see Box 2 below). Should this situation persist, the inflationary pressures arising from increased demand that is not matched by domestic supply could further fuel inflation in the medium-term and negatively impact real GDP growth. However, subdued global demand resulting from the ongoing trade conflict, along with lower commodity prices, might mitigate the inflationary effects of global supply chain disruptions. Domestic factors contributing to lowering inflation include government-imposed price controls and restrictive monetary policy measures. 2.3 Current Account Outlook The current account deficit is anticipated to remain around 4.0 percent of GDP over the medium term. This projection accounts for the decline in oil production and prices, the mixed outcomes from government industrial policies, and higher imports required for increased public and private investment. Oil production is expected to decline until 2028, when the oil fields along the Cameroon- Equatorial Guinea border will begin providing the first oil barrels, which is projected to gradually reduce the trade deficit until 2032. Recent investments in the manufacturing sector are expected to gradually to enhance the value creation of manufactured goods, improving Cameroon’s non- commodity export performance in the medium term with a positive impact on the trade balance. However, the structural XAF overvaluation21, along with the ongoing appreciation of the Euro against the US dollar and Chinese Yuan, may limit the competitiveness of Cameroonian manufactured goods in international markets facing uncertainties, supply chain disruptions, and trade issues. The BEAC will continue enforcing foreign exchange regulations, potentially limiting capital outflows and affecting the region’s attractiveness. The current account deficit is projected to be primarily covered by external borrowing and foreign direct investment. 19 Computed by Cameroonian authorities as HIPC excluding extremely volatile components as fresh products and energy. 20 Due to retaliation export and import restrictions put in place in some important industrial countries. 21 IMF estimated an overvaluation of XAF’s REER around 13.2 percent in 2023, IMF Country Report No 25/64 32  |  Cameroon 2025 Economic Update Fourth Edition 2.4 Fiscal and Debt Outlook The fiscal deficit is projected to be around 2.0 percent of GDP to account for declining oil revenue. The ongoing decline in oil production and projected low oil prices are expected to reduce government revenue. However, non-oil tax revenue growth - averaging an additional 0.3 percent of GDP annually - is expected to partially offset this decline. Efforts on the revenue side will be supported further by the continued digitalization of tax administration, automatic exchange of information with other domestic institutions and foreign jurisdictions, streamlining the reporting process of tax returns, and expanding the tax base. Direct taxes, particularly Personal Income Tax, are expected to drive this trend, as the number of active company taxpayers has increased by 60.8 percent in 2024, and this trend is expected to continue in the medium term. Non-tax revenue as a share of GDP is expected to remain constant, while grants are likely to decrease slightly due to the reduction in official development aid. On the expenditure side, reforms aimed at streamlining goods and services expenditures, including transferring common chapters credits to ministerial budget chapters, will continue but will have a progressive and delayed effect. Wages and salaries will slightly expand in 2025 to account for the automatic payment of career advancement and will progressively decline afterwards. Goods and services expenditures will slightly increase in 2025 due to elections-related costs However, liquidity constraints in the regional securities market and high external borrowing cost due to rising global and regional uncertainties may lead to increased interest payments. With authorities committed to directly supporting growth in the latter half of the decade following years of fiscal consolidation, public capital expenditures are projected to rise significantly to reach 5.1 percent of GDP in 2028, to complete ongoing infrastructural projects. This trend in capital expenditures is expected to account for the bulk of the fiscal deficit in the medium-term. Moving forward, continued focus on tax broadening, efficient expenditure management, and strategic investments in infrastructure will be crucial for sustaining economic growth and stability. Figure 25: Overall Fiscal Balance and Public Debt 50,0 0,0 -0,5 40,0 Peercent of GDP -1,0 Percent of GDP 30,0 -1,5 20,0 -2,0 -2,5 10,0 -3,0 0,0 -3,5 2020 2021 2022 2023 2024e 2025p 2026p 2027p GG External Public Debt (LHS) GG Domestic Public Debt (LHS) Overall Fiscal Balance (RHS) Figure 25:  Projections - Overall Fiscal Balance and Public Debt Sources: Cameroonian Authorities, World Bank Staff Estimates and Projections. Cameroon’s external and overall public debt is sustainable, but the country remains at high risk of debt distress, according to the latest joint World Bank-IMF DSA of February 2025. Cameroon 2025 Economic Update Fourth Edition  |  33 While Cameroon’s external debt stock indicators are below the sustainability threshold, its external debt service indicators - debt service-to-exports ratio and debt service-to-revenue ratio - remain above the threshold but on a downward trend, supported by active debt management. The debt carrying capacity continues to be weak as suggested by the latest score of the Composite Index (CI) and the bond spread is above the benchmark value. The stock of public debt, estimated at 46.8 percent of GDP in 2024, is projected to drop to 43.9 percent by 2028, mainly driven by primary balance that would remain positive until 2028. Debt sustainability is vulnerable to downside risks, including continued tight borrowing conditions, realization of SOEs and PPPs’ contingent liabilities, unsuccessful restructuring of SONARA – the national oil refinery-, and rising social tensions amid both higher inflation and the upcoming presidential election. 2.5 Outlook is less optimistic compared to the previous year Macroeconomic projections in this edition of Cameroon Economic Update, particularly real GDP growth, are less optimistic than those from last year. The outlook for real GDP growth has narrowed primarily due to anticipated impacts from an increased power supply from Nachtigal that have been hindered by delays in connecting the Nachtigal power dam with industrial companies in Douala22, the economic capital. Structural factors dragging down growth prospects include the low quality of public investment, which diminishes the growth impact of expanding public capital expenditures, as well as challenges in the business environment, weak competitiveness, and productivity. Cyclical factors encompass the ongoing trade disputes and persistently high transportation costs. Unlike real growth, other macroeconomic indicators have shown improvement. Average inflation has decreased more rapidly than anticipated due to a quicker-than-expected decline in food price inflation, which is typically volatile. Nonetheless, we maintain our forecast of average inflation returning to the medium-term target of 3 percent by 2027. Fiscal consolidation intensified in 2024, but there will be a reversal in the medium term to accommodate the increase in public capital expenditures while containing current expenditures. Improvements in the current balance result from the significant effect of soaring cocoa prices on the trade balance, which was underestimated in the previous edition of Cameroon Economic Update. Table 4:  Projections Comparison with previous edition of Cameroon Economic Update 2024 Economic Update 2025 Economic Update 2024 2025 2026 2027 2024 2025 2026 2027 GDP growth 4.0 4.2 4.6 5.1 3.5 3.7 3.8 3.9 CPI inflation, average 7.0 5.7 4.9 3.0 4.5 3.7 3.2 3.0 change Fiscal balance (% of -0.8 -1.0 -1.1 -1.1 -1.5 -2.0 -2.0 -1.9 GDP) Current account -4.5 -4.8 -4.3 -4.4 -3.4 -3.9 -4.0 -4.3 balance (% of GDP) Sources: World Bank staff calculations. Projections for 2024 Economic Update were based on information available as of May 10, 2024. Estimates and projections for 2025 Economic Update are based on information updated as of April 2025. Color code: red if worse than 2024 Economic Update, yellow if stable, green if improved. 22 New transmission lines are being built between Nachtigal and Douala. 34  |  Cameroon 2025 Economic Update Fourth Edition Box 2:  Could the mining sector support medium-tem real GDP growth in Cameroon? A handful of mining deposits operated by industrial companies are expected to provide their first ores in 2025 which can be exported or processed domestically. The mining sector actually represents a mere 0.2 percent of GDP and provides less than 0.1 percent of government total revenues. This situation is out of step with the strong evidenced mining potential of Cameroon: (i) 3.9 billion of tons of iron ore, (ii) 140 million of tons of bauxite ore, (iii) 20,400 Kg of gold ore, (iv) 68 million of cobalt-nickel-manganese ore, (v) 1 million of tons of rutile ore, and other minerals .In the past twenty years an emphasis in the development strategy has been put on the industrialization of this sector, to enhance its contribution to the structural transformation of the economy while being a substantial source of revenue for the State. However, despite the design and regular communication around multiple projects, no significant investment was made in the sector. A major policy shift happened in the legal and institutional framework, in 2020 with the creation of the National Mining Corporation (SONAMINES), and in 2023 with the new mining code which sets the State at the heart of mining sector activities. To increase State’s revenue from the mining sector, the Cameroonian authorities enacted a new mining code in December 2023 which gives an important role to the National Mining Corporation (SONAMINES) in charge of protecting and developing State’s interest in this sector. SONAMINES’s new roles include: (i) the processing and management of mining licenses, (ii) the exclusive authorization to sell and to buy gold and diamonds, (iii) to recover the State’s share in the mining production, and (iv) to manage the required 10 percent State’s share in all private operator capital. However, empowering an SOE to oversee licenses compliance might lead to a distortion of competition in the sector without a strong control from the line ministry or the regulation authority. Furthermore, establishing a monopsony over gold and diamond production might deter private investment and fuel smuggling. A key approach to ensure performance and efficiency in the sector is a strong oversight of the SONAMINES. Whereas the authorities have granted SONAMINES, an SOE, with public power duties, it is of extreme importance to implement an effective oversight of its activities to make sure they do not lead to market distortions. Authorities have recently committed themselves to having the financial statements of fifteen SOEs, including SONAMINES, published no later than 6 months after the year-end. Furthermore, to Table 5:  The mining sector’s contribution to fiscal revenue, real GDP growth, and employment remains low in Cameroon 2015 2016 2017 2018 2019 2020 2021 2022 Share of mining sector in 0.4 0.2 0.2 0.2 0.2 0.2 0.1 0.2 GDP (percent) Contribution of mining sector 1.7 1.8 3.7 1.2 12.2 0.6 3.7 0.9 to State’s revenue (in billions of XAF) Retrocession of Gold to 170.0 36.5 218.5 123.9 45.6 38.4 40.0 170.9 Ministry of Finance (in Kilograms) Exports of mining goods (in 14.2 13.7 10.5 9.9 14.6 10.9 billions of XAF) Number of permanent jobs in 750 656 1,137 1,283 1,119 1,685 modern mining sector Sources: ITIE Reports 2015-2022, Cameroon National Institute of Statistics23, 23 https://cameroon.opendataforafrica.org/svmteze/donn%C3%A9es-itie-produites-par-l-ins Cameroon 2025 Economic Update Fourth Edition  |  35 promote “performance and efficiency” in this key entity and ensure transparency and integrity in the way concessions are granted, a performance contract with the government would be the relevant instrument in that respect. To attract more private capital in the sector, it is important to set up the basic infrastructures, as well as a well-functioning and up-to-date national mining information system. Major recent announcements were made about the imminent launching of the production of at least three iron ore deposits , namely (i) Mbalam-Nabeba deposit on both sides of Cameroon-Congo border, (ii) Lobe-Kribi24 for which the production and exports will start in 2025, and (iii) Bipindi-Grand Zambi that is already in production with about 600,000 tons of crude iron ore ready to be exported in 2025 through the recently commissioned Kribi Port in the southern part of the country. However, companies running these projects currently rely on their own power generation facilities, leading to elevated production costs and threatened long-term sustainability of this investment. In that respect, public investments should prioritize roads and railways infrastructure connecting deposits areas with ports and consumption centers, along with the electricity availability and reliability for extracting and processing units. Putting in place these basic infrastructures is an essential step forward, since companies’ intent to invest in a country without these basic infrastructures usually heavily depends on trends in metal international prices. Currently, this price is declining, averaging USD 99 since the beginning of 2025, down from its USD 215 peak, reached in July 2021. If this trend is set to continue, amplified by projected subdued global demand, interest in Cameroonian mining ores would progressively vanish, in the absence of other attractiveness factors like roads and power reliability. 2.6 Risks to the outlook This outlook remains vulnerable to several risks, including: (i) higher volatility in commodity prices, (ii) a continued security crisis, (iii) lower-than-expected budget support from external donors, (iv) ongoing energy supply shortages, and (v) potential tensions surrounding the presidential elections in October 2025. The table below summarizes these risks along with the potential impacts that they could trigger for some macroeconomic aggregates. 24 632 million of tons of iron ore according to some estimates. 36  |  Cameroon 2025 Economic Update Fourth Edition Table 6:  Risks to the outlook and potential macroeconomic impacts Risks\Transmission Channels Fiscal Accounts External Accounts Inflation Real Accounts Higher volatility in Reduced oil Higher volatility Lower growth international revenues and widened trade through lower commodity prices. leading to lower deficit and current public and private public capital account deficit. investment. expenditures. Continued security Higher military Lower food Higher food Lower growth crisis. expenditures with commodity price inflation compared to crowding out exports. due to lower potential from effect on public supply. insufficient human expenditures in and physical capital, education, health, leading to higher social protection poverty rates and and public capital. shrinking labor force participation rate. Lower-than-expected Heightened Difficulties Lower growth budget support from liquidity financing the through lower external donors. pressures, current account public investment. leading to deficit while accumulation maintaining of important a sustainable amounts of level of net arrears and foreign assets. cuts in capital expenditures. Continued energy Off budget Weak Higher Lower growth supply shortages and expenditures, attractiveness vulnerability through lower unsustainable financial leading to of the country to foreign public and private situation of the accumulation and lower FDI. inflation. investment. energy sector. of important amounts of arrears and cuts in capital expenditures. Potential tensions Higher military Weak Lower growth surrounding the expenditures with attractiveness through lower presidential elections in crowding out of the country public and private October 2025. effect on public and lower FDI. investment. expenditures in education, health, social protection and public capital. Heavy trade wars Reduced oil Lower exports Higher Lower growth revenues and performance, imported through lower higher interest leading to inflation due public and private payments, widened trade to supply chain investment. leading to lower and current disruption and public capital account deficits higher inflation expenditures. in industrialized countries, leading to higher domestic inflation. Source: 2025 Cameroon Economic Update Cameroon 2025 Economic Update Fourth Edition  |  37 2.7 Structural Issues and Challenges in Cameroon Most structural change indicators in the table below show mixed yet stable trends. Private sector metrics - such as foreign direct investment and industry value added - have declined or stagnated over the observed period. Infrastructure indicators, including access to electricity and logistics performance, also present mixed outcomes. The Cameroonian private sector continues to face systemic challenges: inadequate public services, weak infrastructure, constrained access to finance, and an uneven playing field due to dominant state presence. High trade barriers25 further restrict private sector growth. Employment trends reflect a gradual economic and workforce distribution shift, with a decline in agricultural jobs and a rise in service employment. However, the services sector, despite accounting for over half of GDP, is highly informal and lacks quality jobs. Manufacturing struggles with high production costs and limited access to credit, technology, foreign inputs and skills. As a result of multiple constraints that create a difficult investment climate, gross capital formation and foreign direct investment (FDI) are lower than in peer countries. Declining labor productivity is due to growth in low- skilled jobs and insufficient output expansion and investments. Education-related indicators, including government expenditure on education and output per hour worked, have generally remained stable or decreased, reflecting potential challenges in building human capital. To boost firm productivity and job creation, structural reforms and improved infrastructure are essential to improve the business climate. Key actions include promoting innovation, improving trade and competition policies, enhancing access to financing, and investing in human capital and infrastructure. 25 Forthcoming Cameroon Growth and Jobs Report 38  |  Cameroon 2025 Economic Update Fourth Edition Table 7:  Cameroon Structural Change Indicators Indicators 2021 2022 2023 Trend Position relative to the lower middle-income group (upper tercile – middle – lower tercile) Private Sector Foreign direct investment, net 2.1 2.0 1.7 Down Middle tercile inflows (% of GDP) Industry (including construction), 24.5 26.3 25.2 Down Middle tercile value added (% of GDP) Services, value added (% of GDP) 50.9 50.0 51.6 Up Middle tercile Agriculture, forestry, and fishing, 16.9 16.9 16.7 Down Middle tercile value added (% of GDP) Infrastructure Gross fixed capital formation (% 18.2 18.8 19.1 Stable Lower Tercile of GDP) Access to electricity (% of 65.4 71.0 Up Lower tercile population) WB logistics Performance index Score:2.1 Score:2.6 Score:2.1 Down Lower tercile (LPI)d Score: 0 to 5 Rank:148 Rank:95 Rank:134 Rank: Out of about 160 countries In 2016 In 2018 In 2023 Human Capital (Education) Government expenditure on 2.83 2.62 Down Middle tercile education, total (% of GDP) Output per hour worked (GDP 4.3 4.23 4.26 Stable Lower tercile constant 2017 international $ at PPP) Digitalization Individuals using the Internet 42 41.8 41.9 Stable Lower tercile (% of population) Secure Internet servers 17 15 17 Stable Lower tercile (per 1 million people) Climate Change ND-gain index on climate 38.5 38.7 Stable Lower tercile vulnerability and readiness (higher is better). (a) The table shows how the indicator value evolved over a three-year period from 2021 to 2023, except for the ND-gain index and Logistics Performance Index, for which data is shown in different years. The value can either increase, decrease, or remain stable. (b) Additionally, for each structural indicator, the country’s position in its income group based on its 2023 indicator value is identified. The country can be in the upper tercile (countries with higher scores in the income group), middle tercile (countries with average scores in the income group), or lower tercile (countries with lower scores in the income group). (c) Access to electricity, government expenditure on education, and the ND-gain index are reported for 2021and 2022. The 2022 value is used to allocate each country into its tercile within its income group. (d) The WB logistics performance index (LPI) is reported for 2016, 2018, and 2023. The 2023 value is used to allocate each country into its tercile within its income group. Cameroon 2025 Economic Update Fourth Edition  |  39 Table 7:  Cameroon Structural Change Indicators Indicators 2021 2022 2023 Trend Position relative to the lower middle-income group (upper tercile – middle – lower tercile) Employment Employment in agriculture (% of 43.8 43.9 43.4 Down Upper tercile total employment) Employment in industry (% of 14.5 14.8 14.9 Stable Middle tercile total employment) Employment in services (% of 41.6 41.3 41.7 Up Lower tercile total employment) Share of youth not in education, 23.2 23.1 23.1 Stable Middle tercile employment or training, total (% of youth population) (modelled ILO estimate)e Trade and ODA Net ODA received (% of GNI)f 3.51 2.58 2.72 Up Middle tercile Export of Fuels and mining 5.14 7.86 4.91 Down Middle tercile products (% of GDP) Total export (% of GDP) 12.6 17.3 13.7 Down Export to Asia (% of GDP) 2.79 2.57 2.62 Up Export to Europe (% of GDP) 2.02 4.51 3.63 Down Export to North America 0.65 0.31 0.28 (% of GDP) Export to Africa (% of GDP) 0.58 0.44 0.34 Down Governance - Percentile rank among all countries (ranges from 0 (lowest) to 100 (highest) rank) Voice and Accountability 17.9 17.9 19.6 Up Lower tercile Political Stability and Absence of 9.9 10.8 11.4 Up Lower tercile Violence/Terrorism Government Effectiveness 16.2 18.9 17.5 Down Lower tercile Regulatory Quality 16.7 19.3 19.3 Stable Lower tercile Rule of Law 12.9 15.6 16.5 Up Lower tercile Control of Corruption 13.8 13.2 13.2 Stable Lower tercile Sources: World Development Indicators (WDI, World Bank), International Labor Organization (ILO), World Trade Organization (WTO), Or- ganization of Economic Complexity (OEC). (e) Share of youth not in education has a different color code rule. When the value goes down it shows improvement (green), and when it goes up, it shows deterioration (red). Being in upper tercile means belonging to countries with higher share of youth being in education, employment or training in the country income group. (f) Net ODA is reported for 2020, 2021, and 2022. The 2022 value is used for tercile allocation. Note: Blank cells in the table mean there was not enough data available to assess the trend or to identify the tercile position of the country. 40  |  Cameroon 2025 Economic Update Fourth Edition 2 Building and preserving Cameroon’s wealth for better livelihoods 1. Wealth accounting – Overview and concepts 1. Wealth accounting – Overview and concepts Measures of a nation’s wealth are an important complement to GDP, providing important insights into the capital foundation for future growth and sustainability. Gross domestic product (GDP) is a widely used indicator that measures the economic performance of a country by calculating the total value of goods and services produced within its borders over a specific period. Complementing GDP with figures on national wealth is crucial because it offers a more comprehensive view of an economy’s health. National wealth encompasses various assets, including natural resources, human capital, and produced capital, which are essential for long-term economic stability and growth. By assessing the evolution of the level and composition of national wealth, policymakers can better understand the 42  |  Cameroon 2025 Economic Update Fourth Edition capacity of an economy to generate future income and sustain development. This approach helps identify whether current economic practices are depleting resources or investing in assets that will support future prosperity. By considering both GDP and national wealth, policymakers can design strategies that promote sustainable development, ensuring that economic growth does not come at the expense of environmental degradation, social inequity or generational inequity. This dual approach enables a more balanced assessment of an economy’s prospects, guiding investments in education, infrastructure, and environmental conservation to foster a resilient and equitable economic landscape. This would help better inform budget and policy reforms discussions between government representatives, civil society organizations, local populations and private sector actors. The wealth of a nation can be classified into four categories: human capital, produced capital, natural capital, and financial capital. Human capital represents the skills, health, and education of the population, serving as a key driver of productivity and long-term growth. Produced capital includes infrastructure, factories, and other durable goods that support economic activities. Natural capital consists of renewable and non-renewable resources, such as forests, agriculture land, minerals, and hydrocarbons, which play a crucial role in many economies. Financial capital, represented by net foreign assets: the difference between a country’s external financial assets (such as foreign reserves, investments, and loans to other countries) and its external liabilities (such as foreign debt and investments made by foreigners in the country)26. Total and per capita real wealth can increase when more workers join the labour force, when existing workers acquire new skills, when forests expand, or when new commercially viable mineral deposits or hydrocarbon reserves are discovered. However, they will decline if fish stocks are overfished, machinery and infrastructure degrade, forests are irreversibly destroyed, or if mining and fossil fuels reserve are depleted. By monitoring per capita trends in real GDP and real wealth together, it is possible to assess whether growth in a nation’s GDP is achieved by growing or shrinking the productive base of the economy27. Box 3:  Structure of Wealth accounts Source: World Bank, 2025 26 World Bank. (2024). The changing wealth of Nations. Washington DC: World Bank Group. 27 Ibid Cameroon 2025 Economic Update Fourth Edition  |  43 The ideal situation for a country is when both GDP per capita and wealth per capita increase simultaneously. This indicates that a country’s economic output is growing in a way that also builds long-term assets—such as infrastructure expansion, human capital development, and natural capital conservation—ensuring sustainable development. While rising GDP per capita reflects higher income and economic activity, increasing wealth per capita shows that this growth is not depleting the country’s assets, but rather enhancing its capacity to generate future well-being. During a country’s development the relative composition of its wealth typically changes. Increases in produced and human capital are typically strongly associated with growth in production and income. In a virtuous cycle, increases in human and physical capital are the drivers of economic growth while in turn economic growth generates the resources for investment in human and physical capital. Similarly, natural capital is a critical but an often-overlooked input into economic growth. The life-sustaining functions of nature make regions habitable, water drinkable, agriculture possible, and the climate tolerable. The difference between renewable and non-renewable natural capital is important. While non-renewable resources, by their very nature tend to decline, as they are being exploited, renewable resources can re-generate as long as the exploitation rate is below the re-generation rate. However, even these resources are declining significantly due to an unsustainable rate of exploitation. For Sub-Saharan Africa, such trends are reflected in significant growth in per capita human and produced capital, while non-renewable capital per capita remained constant and renewable capital declined. The relative contribution of these categories to Sub-Saharan to total nominal wealth also changed significantly between 1995 and 2020. While in 1995, human and renewable capital accounted for 44 percent and 27 percent of total wealth, respectively, by 2020 their share had further increased to 50 and 30 percent of total wealth. On the other hand, the share of non-renewable wealth only increased modestly from 4 to 5 percent during that period, while the contribution of produced capital declined sharply from 25 to 15 percent. Trends in wealth per capita, by asset category, Sub-Saharan Africa (real chained 2019 USD), 1995-2020 140 120 100 80 60 40 20 0 1995 2000 2005 2010 2015 2020 Produced capital Human capi tal Renewable natural capital Nonrenewable natural capital Figure 26:  Evolution and composition of wealth in Sub-Saharan Africa. Trends in wealth per capita, by asset category, Sub-Saharan Africa 1995-2020, (1995 =100) Source: Authors, based on CWON database (accessed 05/14/2025) 44  |  Cameroon 2025 Economic Update Fourth Edition Nominal wealth shares by asset category, Sub-Saharan Africa, 2020 Produced capital Human capi tal Renewable natural capital Nonrenewable natural capital Figure 26:  Evolution and composition of wealth in Sub-Saharan Africa. Nominal wealth shares by asset category, Sub-Saharan Africa, 2020 Source: Authors, based on CWON database (accessed 05/14/2025) Achieving sustained economic prosperity requires a holistic approach to national wealth accounting, considering natural capital with produced and human assets. Cameroon’s forests, part of the Congo Basin Forest—the planet’s largest remaining tropical forest carbon sink— offer essential ecosystem services critical to economic activity, food security, and climate resilience. These services encompass carbon sequestration, hydrological regulation, soil fertility, biodiversity preservation, and cultural heritage, supporting local livelihoods and global environmental stability (UNEP TEEB 2010; Dasgupta 2021). However, traditional macroeconomic indicators like Gross Domestic Product (GDP) and national income, often undervalue these contributions, obscuring ecological depletion and distorting sustainability assessments (Stiglitz, Sen, and Fitoussi 2009; World Bank 2021). While the value of certain forest ecosystem services such as carbon retention cannot be directly added to GDP, it is important to also consider these values and their trends in policy making and in development planning, as they provide a broader picture of wealth sustainability. Without robust natural capital accounting, Cameroon risks a growth trajectory that silently erodes its ecological foundation, jeopardizing future prosperity (Arrow et al. 2012; Lange, Wodon, and Carey 2018). In 2020, Cameroon’s forests stored 7.1 billion tonnes of carbon—equivalent to 26 billion tonnes of CO2— crucial for stabilizing global climate and regulating rainfall patterns across West and Central Africa, a function increasingly vital as other tropical forests, like the Amazon, falter (Gatti et al. 2021; World Bank WAVES 2023). This chapter is organized into three sections. The first section provides an overview of the evolution and composition of Cameroon’s wealth, highlighting the critical role of natural capital—alongside produced and human capital—in shaping long-term development in Cameroon. The second section examines in detail Cameroon’s forest related wealth and services, which provides insights into the economic value and ecological importance of the country’s forest resources. The third section interprets national wealth trends and examines the implications of the Forest Ecosystem Service Accounts (FESA) for economic development and policy, particularly focusing on how to more effectively convert non- renewable natural assets into durable forms of capital. The final section links wealth and ecosystem services to macroeconomic measurement, emphasizing adjusted macro indicators like Adjusted Net National Income (ANNI) and Adjusted Net Savings (ANS) to better capture sustainability, while also briefly discussing the potential impact on GDP if Cameroon’s carbon retention services were monetized. Cameroon 2025 Economic Update Fourth Edition  |  45 2. Evolution and composition of Cameroon’s wealth and the contribution of forest ecosystem services This section uses the World Bank’s Changing Wealth of Nations (CWON) database to analyse the evolution of Cameroon’s wealth from 1995 to 2020. Since the late 1990s, the World Bank has pioneered wealth accounting measurement, developing frameworks to assess countries’ wealth assets — including produced, human, and natural capital—as a foundation for sustainable development policies (see box 1). The CWON database stands as the most comprehensive, publicly accessible, and reproducible resource for wealth data. It employs monetary estimates of wealth components that adhere to internationally recognized valuation principles from the System of National Accounts (SNA)28 and the System of Environmental-Economic Accounting (SEEA)29. However, estimating wealth requires reliable and complete data are necessary, which are often lacking for countries in the CEMAC region (see box 2). Over the past two decades, CWON has consistently enhanced its wealth estimates by incorporating new data sources, refining measurement techniques, and advancing methodologies to deliver a more accurate picture of national wealth (see box 3). Cameroon’s national wealth evolution Cameroon’s wealth assets are predominately composed of natural capital and human capital dominate, with their value nearly doubling from 1995 to 2020. The country’s total wealth has shown a consistent upward trajectory, reaching $553 billion in 2020, a significant increase from $311 billion (real chained 2019 US$) in 1995 (figure 1a). In 2020, this wealth was approximately 14 times Cameroon’s nominal GDP30. Human capital has historically been the main component of the country’s asset portfolio with 54 percent in 2020, followed by natural capital (39 percent) and produced capital (7 percent) (figure 1b). While the value of Cameroon’s natural assets grew by a modest 4 percent between 1995 and 2020, human capital surged by 129 percent. The fastest-growth was observed in produced capital, which increased by 231 percent, largely due to substantial public infrastructure investments made during the 2010s. In comparison to its regional peers, Cameroon has a higher share of human capital in its national wealth than countries like Congo and the Central African Republic and surpasses the Sub-Saharan Africa average (figure 1c). Despite being the fastest growing asset, the contribution of produced capital in Cameroon’s wealth remains lower than that of other regional peers, as well as the LMIC and SSA average, reflecting in part the low base in 1990s. Gross fixed capital formation has remained low, around 19 percent of GDP, despite the remarkable rise in public investment during the 2010s that supported the sustained accumulation of public capital goods (essentially roads and ports). However, since 2016, public capital expenditures have been declining due to fiscal consolidation efforts, which have subsequently slowed the trend of capital accumulation. 28 The System of National Accounts (SNA) is a UN-led international standard that provides guidelines for compiling consistent and integrat- ed measures of economic activity using agreed concepts, definitions, and accounting rules. 29 In 2012, the UN Statistical Commission approved the SEEA as an international statistical standard, providing methods to compile ac- counts for natural resources (e.g., minerals, water, energy, timber) and pollutant emissions like greenhouse gases 30 Here, it’s total wealth without carbon retention services. 46  |  Cameroon 2025 Economic Update Fourth Edition a. National wealth evolution in real chained 2019 US$, b. Nominal wealth shares, by asset category in Came- 1995-2000 roon, 2020 Figure 27.b: Nominal wealth shares, by asset category, 2020 Figure 27.a: National wealth evolution in real chained 2019 US$, 1995-2020 7% 600 500 39% 400 300 54% 200 100 0 1995 2000 2005 2010 2015 2020 Produced Capital Human Capi tal Natural Capital Produced capital Human capi tal Natural Capital c. Nominal wealth shares, by asset category, Came- d. Trends in real wealth per Capita (NWI), 1995 - 2020, roon and peers countries and regions, 2020 Cameroon, (1995 = 100) Figure 27.c: Nominal wealth shares, by asset category, Figure 27.d: Trends in real Wealth Per Capita, 1995 - 2020, Cameroon Cameroon and peers countries and regions, 2020) 180 160 1 00% 140 120 80% 100 60% 80 40% 60 20% 40 0% Cameroon Congo Rep. Gabon CAR LMIC SSA 20 1995 2000 2005 2010 2015 2020 Produced capital Human capi tal Natural Capital National Comprehensive Wealth Index (NCWI) Produced Capital Human Capi tal Renewable Natural Capital Nonrenewable Natural Capit al Figure 27:  National and per capita wealth evolution. Source: Changing Wealth of Nation (CWON), 2024 Cameroon 2025 Economic Update Fourth Edition  |  47 Despite overall growth in total wealth, national wealth per capita declined by 11 percent between 1995 and 2020 (figure 27d) in a context of rapid population growth as in other countries in the region. Cameroon’s population has more than doubled during this period, increasing from 13 million to 28 million. The National Wealth Index (NWI) per capita, which measures the real value of the country’s produced, human, natural, and physical capital, dropped from 100 in 1995 to 89 in 2020, reflecting an average annual decline of -0.4 percent. Cameroon has therefore experienced a decline in per capita wealth while experiencing positive GDP per capita growth: in comparison, the average SSA and LMIC have experienced both positive GDP and wealth growth (figure 2a). This pattern shows that economic growth has not been accompanied by sustainable wealth accumulation in Cameroon. The evolution of real wealth per capita depends on the balance between asset growth and population dynamics. If the accumulation and enhancement of productive assets do not outpace population growth, per capita wealth will inevitably decline. Therefore, effective management of natural resources, strategic investments in infrastructure and human capital, and economic diversification are crucial to ensuring that both assets base and GDP per capita increase (World Bank, 2021). Cumulative GDP per capita growth vs. cumulative wealth per capita growth, 1995–2020 0,03 Wealth per capita growth, 1995–2020 (%) HIC 0,02 SSA UMIC LMIC 0,01 0 Cameroon COG -0,01 CAR GAB -0,02 -0,02 0 0,02 0,04 0,06 0,08 0,1 GDP per capita growth, 1995–2020 (%) Figure 28:  Per capita growth accumulation and adjusted net saving. a. Cumulative GDP per capita growth vs. cumulative wealth per capita growth, 1995–2020 Source : WDI and CWON, 2024 In Cameroon, per capita wealth has increased significantly in produced capital, experienced a slight rise in human capital, but has declined substantially in both renewable and non-renewable natural capital (Figure 27d). This decline is not uncommon and generally results from multiple factors, including deforestation, land degradation, overfishing, and climate change. While renewable natural capital can regenerate, overexploitation or insufficient conservation efforts often lead to depletion faster than replenishment. Additionally, economic development and urbanization frequently reduce the availability of natural resources per capita, especially in countries with rapid population growth, such as Cameroon. Between 1995 and 2020, the urbanization rate rose from 43 percent to 59 percent. The following subsections provide a more detailed analysis of the three components of Cameroon’s wealth: natural capital, physical capital, and human capital. 48  |  Cameroon 2025 Economic Update Fourth Edition 2.1 Measuring Components of Comprehensive Wealth 2.1.1. Produced Capital Between 1995 and 2020, Cameroon’s produced capital wealth more than doubled, driven by robust public infrastructure investments made during the 2010s. The value of produced capital assets surged from USD 13.2 billion (real chained 2019 US$) in 1995 to USD 43.7 billion in 2020, with an average annual growth rate of 5 percent, indicating a steady expansion in infrastructure, machinery, and built assets. Per capita, produced capital increased from USD 1,000 in 1995 (real chained 2019 US$) to USD 1,652 in 2020. Skey developments included the construction of the oil pipeline from Doba in Chad to costal city Kribi in Cameroon in the early 2000s; and debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative in 2007, which freed funds for infrastructure investment. Despite these gains, Cameroon’s per capita produced capital remains below the SSA and LMIC averages, with growth lagging peers like cote d’Ivoire, Ghana, and Kenya. Cameroon’s capital accumulation is hindered by domestic savings, limited credit to the private sector, and modest Foreign Direct Investment (FDI). Since the 2000s, gross capital formation has stagnated, trailing behind countries like Bangladesh, Vietnam, and Kenya. FDI inflows have fluctuated between zero and four percent of GDP from 2000 to 2022, lagging Morocco, Vietnam, and Ghana. From 2010 to 2023, gross domestic savings in Cameroon averaged 15 percent of GDP, compared to23 in similar economies. In 2024, over 60 percent of Cameroonian firms considered access to finance as a major constraint, considerably more than their peers in SSA and globally31. The financial sector’s limited diversification and reliance on volatile sectors like oil exacerbated these issues. Addressing these challenges is vital to boost investment amid national savings and constrained public investment. 31 World Bank Enterprise Surveys. 36.8 percent of firms in SSA and 20.5 percent in the world identified access to finance as a major constraint. Cameroon 2025 Economic Update Fourth Edition  |  49 a. Produced capital per capita Produced in Cameroon capital and peers’ per capita countries (in in Cameroon and USD real chained), 2020 peers’ countries, real chained USD, 2020 7000 6000 5000 4000 3000 2000 1 000 0 m ire a ria sh a A IC o n an ny oo SS c na LM de Ivo oc ge Ke Gh er et la Ni or d' m Vi ng M te Ca Ba Co b. Growth in produced Growth capital per capita in produced between capital 1995-2020, per capita in1995-2020, percentagein between percentage 1800 1600 1400 1200 1000 800 600 400 200 0 Cameroon Cote d'Ivoire Kenya Ghana Morocco Bangladesh Vietnam Structural Aspi rational LMIC SSA c. GFCF in Cameroon and peers countries, as % of GDP, 1995-2020 GFCF in Congo and peers countries, 1995-2020 40 35 30 25 20 15 10 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Cameroon Regional peers Structural peers Aspi rational peers Figure 29:  Produced capital per capita and GFCF, Cameroon and peers’ countries and regions. Source: CWON 2024 and WDI Throughout this report, Cameroon’s regional peers are Congo, Gabon, CAR, EQG; its structural peers are Kenya, Ghana, Nigeria, and Cote d’Ivoire; and its aspirational peers are Morocco, Bangladesh, and Vietnam. Depending on data availability, sub-sets or alternate comparators are sometimes used. 50  |  Cameroon 2025 Economic Update Fourth Edition 2.1.2. Human Capital Since 1995, Cameroon has seen only a modest increase in human capital per capita compared to structural and aspirational peers. Human capital is defined as the present value of future earnings for the labour force, employed and self-employed. It can be used to complement the Human Capital Index (HCI), which is based on health and education indicators, and aims at estimating the level of productivity that a child born today can expect to attain when reaching working age. It is Cameroon’s largest national asset and a crucial driver of sustainable growth and poverty reduction. Despite its importance, human capital per capita has grown from $9,896 (real chained 2019 US$) in 1995 to $11,280 in 2020, making a mere 14 percent increase over 25 years. This growth is modest, especially given Cameroon’s rich natural resources and the potential benefits of a more skilled workforce could bring. In contrast, structural peers have achieved higher human capital growth, while aspirational peers like Vietnam and Bangladesh have seen remarkable increases of 92 percent and 72 percent, respectively., underscoring the need for Cameroon to enhance its human capital. Human capital wealth growth, Cameroon and peers’ a. Human capital wealth growth, Cameroon and peers’ countries, 1995-2020 countries, 1995-2020 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Cote d'ivoire Kenya Cameroon Nigeria Ghana BangladeshVietnam Morocco Structural Aspi rational SSA LMIC Human Capital index, Cameroon and peers’ countries, b. Human Capital index, Cameroon and peers’ countries, 2020 2020 0,8 0,7 0,6 0,5 0,4 0,3 0,2 0,1 0 Vietnam Kenya Morocco Bangladesh Ghana Cameroon Cote d'ivoire Nigeria Figure 30:  Human capital wealth in Cameroon and peers’ countries Source: CWON and World Bank Human Capital Iindex Cameroon 2025 Economic Update Fourth Edition  |  51 2.1.3. Natural Capital Non-renewable natural capital Cameroon’s non-renewable natural wealth has been steadily declining, primarily due to oil depletion. Non-renewable capital assets are highly dependent on factors such as commodity prices, technological advancements, and the discovery of new reserves. Between 1995 and 2020, Cameroon’s non-renewable natural capital wealth declined by 57 percent in absolute terms, with oil asset driving this trend. Oil assets decline by 50 percent. The total value of non-renewable natural capital was estimated at USD 7.5 billion in 2020 (real chained 2019 US$), down from USD 17.5 billion in 1995 (figure 5a). On the other hand, natural gas asset value has increased by 22 percent between 1995 and 2020. The decrease in non-renewable natural capital is mainly attributed to the decline in known oil reserves, which has coincided with reduced oil production. Existing oil fields are being depleted, and there has been minimal investment in recent years towards the exploration of new deposits. It is anticipated that only one oil and gas deposit will be operational in the forthcoming years. Furthermore, there is a significant transition risk that may mean companies commit to stop new oil and gas exploration. Cameroon depends less on non-renewable source than many of its neighbouring countries. In 2020, oil accounted for 45 percent and gas for 48 percent of Cameroon’s non-renewable natural capital, while metals and minerals made up the remaining 7 percent. By comparison, neighbouring countries like Gabon and Congo have oil shares of 93 percent and 97 percent, respectively (figure 5c). In contrast, in CAR, SSA, and LMIC countries, metals and minerals dominate the non-renewable natural capital stock. For decades, Cameroon’s exploitation of natural resources has been heavily focused on oil, while its mining potential has remained largely untapped. Oil plays a significant, though declining, role in Cameroon’s economy, contributing 16 percent of government revenue and constituting 40 percent of total exports in 2023. Cameroon possesses strong mining potential which should be pursued with due regard for avoiding unsustainable ecological damage. Despite these vast reserves, much of Cameroon’s mineral wealth remains untapped due to several challenges. low commodity prices have made it less economically viable to extract and market these minerals on a global scale. The development of mining industries has been hindered by historically high volatile commodity prices and the lack of adequate transportation networks makes it difficult to move ores from mining sites to places where they can be processed or exported. This requires massive investment in infrastructure such as roads, railways, and ports, which is beyond the financial capacity of many potential investors without government support or substantial international investment. 52  |  Cameroon 2025 Economic Update Fourth Edition a. Non-renewable wealth evolution, in billion real b. Oil production, millions of barrels. chained USD, 1995-2020 Nonrenewable wealth evolution, in real chained USD, Oil production (million of barrel) 1995-2020 40 20 35 18 16 30 14 12 25 10 20 8 6 15 4 10 2 0 5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Nonrenewable natural capital Oil c. Non-renewable energy composition in Cameroon d. Change in Non-renewable natural capital per capi- and peers’ countries. ta, between 1995 and 2020 Change in non-renewable capital stock, 1995-2020 Nonrenewable capital composition in Cameroon and peers’ countries Angola 100% 90% Nigeria 80% 70% 60% 50% Congo 4 0% 30% 20% Gabon 10% 0% Cameroon Congo Gabon CAR SSA LMIC Cameroon Oil Natural Gas Coal Metals and Minerals -100% 0% 100% 200% 300% 400% 500% 600% 700% Natural gas Oil Figure 31:  Non-renewable natural capital in Cameroon and peers’ countries. Source: CWON 2024, and OPEC, oil production is from national Authorities Cameroon 2025 Economic Update Fourth Edition  |  53 Box 4:  How can countries avoid being left with stranded assets in a evolving global environment? Oil and gas are still expected to play a major role in the global economy over the coming decades. Yet, the sector is becoming more competitive, with new drilling technologies reducing extraction costs in the United States and other regions. Moreover, emerging efficiency standards, batteries, and infrastructure for electric vehicles create uncertainty in oil demand. Changes in policies, institutions, social norms, and technologies can cause a sustained reduction in global demand for fossil fuels, leaving countries unable to use natural resources or physical capital built to serve those industries. Research highlights the risk of stranded assets in fossil fuel-dependent countries, with changes limiting the economic role of these sectors and resulting in ‘unburnable carbon’. Cust and Manley (2018) assess the carbon wealth of nations and the risks posed by technological advances and climate policies, arguing that fossil fuel-rich countries risk losing the value of their underground wealth and may be adopting policies that increase their exposure to these risks. A global low-carbon transition poses specific risks for oil-rich countries due to their reliance on narrow revenues and employment base. They are highly vulnerable to climate shocks but also highly exposed to global mitigation efforts, with a global decline in fossil fuel industries and related value chains impacting local development. If due to the aforementioned factors global hydrocarbon demand declines, there is a significant risk that CEMAC countries’ hydrocarbon assets could see significant declines in their values and leave countries with important assets stranded. This includes natural resources in the ground but also physical capital, like power and transport infrastructure serving resource extraction or fuel-based power generation, and human capital, due to workers’ training and skills acquired in those sectors. At present, much of foreign and private investment in CEMAC currently goes into extractive sectors. An estimated 30 percent of private investment in Gabon was directed to the oil industry in 2024. Depending on an evolving and uncertain global scenario, investment in the hydrocarbon sector could further decline. This adds further urgency for the CEMAC countries to accelerate the economic diversification process. To mitigate risks, investments should prioritize sectors that stimulate regional development, such as infrastructure supporting trade in agricultural products. More broadly, diversification efforts should focus on broadening a country’s asset portfolio, including people and skills, renewable natural capital like agriculture and forestry, underground assets, and factories and infrastructure. Successful strategies must balance between managing carbon-intensive assets and transitioning to knowledge-intensive growth models based on broader asset types and supported by strong institutions. In CEMAC countries like Gabon, strategies should adapt to different extractive sectors, leveraging the rising global demand for minerals that are essential to the energy transition. Many of these are abundant in the region, providing great opportunities if resources are well-managed. Sources: Peszko, G, et al. 2020. Diversification and Cooperation in a Decarbonizing World: Climate Strategies for Fossil Fuel–De- pendent Countries. Climate Change and Development. Washington, DC: World Bank; Cust, J., and D. Manley. 2018. “The Carbon Wealth of Nations: From Rents to Risks.” The Changing Wealth of Nations 2018: Building a Sustainable Future, edited by G. M. Lange, Q. Wodon, and K. Carey, 97–113. Washington, DC: World Bank. 54  |  Cameroon 2025 Economic Update Fourth Edition Renewable natural Capital The stock of renewable natural capital has generally increased, despite a slight decline in forest ecosystem services. In absolute terms, natural capital grew by 10 percent between 1995 and 2020, with an average annual growth rate of 0.5 percent. Its value was estimated at $214 billion USD in 2020 (real chained 2019 USD), a slight increase from the $195 billion USD recorded in 1995 (figure 6a). This modest 10 percent increase is higher than the 1 percent observed in the Central African Republic, the 8 percent in Congo and the 2 percent in Gabon, but lower than the 13 percent in Sub-Saharan Africa. Notable growth was observed in hydroelectric energy, whose value almost doubled between 1995 and 2000, rising from $9.1 billion USD to $17.5 billion USD (real chained 2019 USD). Agricultural land and forest ecosystem services dominate renewable natural capital wealth in Cameroon, with their value remaining stable between 1995 and 2020. Agriculture land accounts for 34 percent of the country’s renewable natural capital, while forest ecosystem services represent about 12 percent and hydropower energy 8 percent. Within forest wealth, the largest category is timber, which makes up 27 percent of renewable natural capital, followed by forest recreation, hunting, and fishing services (20 percent), non-wood forest products (10 percent), and forest water retention services (8 percent). The value of agriculture land has increased modestly in Cameroon, only 6 percent between 1995 and 2020, reflecting the still low agricultural productivity compared to structural peers32. Minimal productivity gains occurred between 1990 and 2004, relying on land expansion for growth. From 2004 to 2016, technology and policy reforms boosted TFP, but since 2016, TFP has declined due to governance issues, reduced investments, and climate disruptions. The share of forest wealth in natural capital is lower in Cameroon compared to other heavily forested countries: such as Congo, Gabon, the Central African Republic, and Brazil (figure 6b). Notably, the deforestation rate in Cameroon was relatively high in the past decade, with the country losing about 3 percent of its forest area, compared to 2 percent in Congo and 0.5 percent in Gabon. This has contributed to the relatively slight decline (-8 percent) in forest ecosystem services observed between 1995 and 2020. 32 Agriculture value added per worker was USD 1,201 in Cameroon, USD 2,433 in Ghana and USD 5,087 in Nigeria in 2022. Cameroon 2025 Economic Update Fourth Edition  |  55 Renewable a. Human capital wealth natural growth, capita evolution, Cameroon Billion, and peers’ chained 2019 countries, USD, 1995-2020 1995-2020 250 ,0 200,0 150 ,0 100,0 50,0 0 ,0 1995 2000 2005 2010 2015 2020 Forests, timber Recreation, hunting, fishing services Non-wood forest products Water retention services Mangroves Fisheries Agricultural land Hydropower energy b. Human Capital index, Cameroon and peers’ countries, 2020 Renewable wealth composition in Cameroon and peers’ countries 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Cameroon Congo, Rep CAR Gabon Australia Brazil Canada Indonesia Forests, timber Forests, recreation, hunting, and fishing Forests, non-wood forest products Forests, water retention services Mangroves Fisheries Agricultural Land Hydropower energy Figure 32:  Human capital wealth in Cameroon and peers’ countries Source: CWON and World Bank Human Capital Iindex 56  |  Cameroon 2025 Economic Update Fourth Edition 3. The contribution of Cameroon’s forests to Cameroon’s and global wealth and well-being This section presents a detailed synthesis of the Cameroon Forest Ecosystem Accounts for the period 2000–2020, developed under the System of Environmental-Economic Accounting (SEEA) framework. The analysis examines transformations in forest extent, condition, biodiversity, and economic value, weaving together spatial trends, socioeconomic drivers, and policy implications. By integrating insights from regional assessments and global frameworks, it illuminates the trade-offs between development and ecological integrity, offering a foundation for sustainable macroeconomic management and climate-resilient development. 3.1 Escalating Forest Loss and Ecosystem Transformation At the dawn of the millennium, Cameroon’s forests spanned 51 percent of its national territory, predominantly composed of lowland forests (93 percent of forest area), with smaller shares of submontane (4 percent), swamp (3 percent), montane, mangrove, and peat forests. These coexisted alongside savanna/woodlands (43 percent) and anthropogenic ecosystems, including forest-farm mosaics, croplands, plantations, and settlements. By 2020, the landscape had undergone profound transformation, driven by a 79 percent surge in human-modified ecosystems. Forest-farm mosaics expanded by 168 percent, while plantations grew by 130 percent, primarily at the expense of lowland forests and savanna ecosystems. This shift, vividly illustrated in Figure 2.1, reflects a marked decline in natural ecosystem extent and a burgeoning footprint of anthropogenic systems. The pace of forest loss accelerated dramatically after 2010, with the conversion of lowland forests to forest-farm mosaics between 2010 and 2020 exceeding five times the rate observed in the previous decade. This escalation stems from intensified agricultural clearance, infrastructure development, and a failure of natural regrowth to keep pace with losses in mosaic areas. Such trends signal a critical imbalance, where human pressures outstrip ecological recovery, threatening both local livelihoods and the global climate stabilization functions of Cameroon’s forests. 3.2 Spatial Patterns of Deforestation The spatial distribution of forest loss reveals a clear nexus with human activity, particularly proximity to population centers and transport corridors. The Centre, Nord, and Est regions emerged as deforestation hotspots, though losses were observed nationwide. The Est region, home to 40 percent of Cameroon’s forest area, and the Sud region, with 96 percent forest cover, remain critical forest strongholds, yet both experienced significant lowland forest declines. The Centre region recorded the largest absolute loss, with 152,000 hectares of lowland forest cleared, while the Nord region suffered the steepest proportional decline, losing 81 percent of its lowland forest by 2020. Swamp forests followed a similar trajectory, with accelerating losses in most regions after 2010. Submontane and montane forests exhibited more variable trends. Between 2000 and 2010, these forest types declined in most regions, but localized regrowth in Nord-Ouest and Littoral led to net increases by 2020. Conversely, Adamaoua lost 6,500 hectares of submontane forest (an 8 percent reduction), and Ouest saw a 1,100-hectare decline in montane forest (10 percent). Peat forests, Cameroon 2025 Economic Update Fourth Edition  |  57 confined to the Est region, and mangroves, predominantly in Sud-Ouest (63 percent of national extent), remained relatively stable, offering rare resilience amid widespread forest retreat. These regional disparities reflect diverse drivers—agricultural expansion, infrastructure growth, and varying conservation enforcement—underscoring the need for spatially differentiated policy interventions. 3.3 Declining Forest Condition and Biodiversity Beyond the reduction in forest extent, the ecological condition of Cameroon’s forests has deteriorated significantly, as assessed through satellite-derived metrics such as tree height, canopy cover, forest connectivity, and landscape naturalness. Montane and submontane forests are the most degraded, with less than 20 percent and 30 percent of their respective areas remaining near pristine, owing to logging, fragmentation, and drier conditions along the northwestern rainforest periphery. Swamp forests are moderately degraded, with over half their area compromised, while lowland forests, though relatively intact, exhibit increasing structural stress. Peat forests and mangroves maintain fair to good condition, but their limited extent heightens their vulnerability, and mangrove assessments may underestimate human disturbance due to data constraints. Forest biodiversity, measured as the percentage of original biodiversity heritage remaining, offers a stark indicator of ecological decline. In 2000, Cameroon’s forests retained 66 percent of their biodiversity intactness, which fell to 63 percent by 2020. This erosion, driven by losses in lowland, swamp, submontane, and montane forests, threatens iconic species such as the Cross River gorilla and forest elephants, critical for ecosystem function and cultural heritage (IUCN 2024). The 2020 biodiversity score aligns with expert-led estimates of 73 percent intactness, validating the habitat-based approach while highlighting persistent losses. This decline in ecological integrity weakens forest resilience, reducing their capacity to deliver regulating services essential for both Cameroon and the global community. 3.4 Drivers of Deforestation and Economic Trade-Offs The drivers of deforestation vary in scale, impact, and economic contribution, as detailed in Table 2.1. Forest-farm mosaics, fueled by subsistence agriculture, exert the most extensive impact on lowland forests, delivering moderate economic returns primarily to rural households. Plantation expansion, targeting swamp and degraded forests, generates high returns for export-oriented sectors but displaces critical ecological services. Fuelwood extraction (6.8 million tonnes in 2020), valued at XAF 224 billion (USD 377 million) in 2020, meets rural energy needs but strains lowland and swamp forests, while industrial roundwood extraction, yielding 2.8 million tonnes, supports the formal timber sector. These activities address immediate livelihood needs but generate significantly lower economic value compared to the ecological services provided by intact forests, particularly carbon retention, which accounted for 96 percent of total ecosystem service value in 2020. 58  |  Cameroon 2025 Economic Update Fourth Edition Table 7:  Major Drivers of Forest Loss and Economic Returns Driver Area Primary Forest Economic Beneficiaries Impact Affected Return (2020) Forest-farm mosaics Very high Lowland forests Moderate (subsistence-oriented) Local/rural households Plantation expansion High Swamp & degraded forests High (future export potential) Export-oriented sectors Fuelwood extraction High Lowland & swamp forests XAF 224 billion (USD 377 million) Rural energy use Industrial roundwood Moderate Lowland forests XAF 2.8 million tonnes extracted Formal timber sector 3.5 Increasing Use of Provisioning Services The exploitation of provisioning services—wood for timber, poles, and fuel, and wild resources such as bushmeat and plant foods—has intensified, driven by population growth and limited energy alternatives. Wood extraction nearly doubled from 5.2 million tonnes in 2000 to 9.5 million tonnes in 2020, with lowland forests supplying 79 percent of the total. Fuelwood dominated this increase, rising from 3.1 million tonnes (60 percent of extraction) to 6.8 million tonnes (71 percent), while industrial roundwood grew from 2.1 to 2.8 million tonnes. The monetary value of wood supply climbed 64 percent, from XAF 136,691 million to XAF 224,700 million, reflecting its growing economic significance. Wild resource extraction remained relatively stable, with bushmeat comprising over 87 percent of assessed tonnage. A moderate decline from 2010 to 2020 suggests potential depletion, though the exclusion of resources like insects, mushrooms, and medicinal plants likely underestimates total pressure. This intensification of provisioning service use underscores the growing dependence on forests for basic needs, amplifying degradation pressures and necessitating sustainable management strategies. 3.6 Regulating Services: Sediment and Carbon Dynamics Regulating services, particularly sediment retention and carbon sequestration, are under increasing strain due to forest loss and degradation. Sediment retention, vital for maintaining water quality and supporting hydropower, declined as forest cover diminished, leading to an 8 percent increase in river sediment loads from 2000 to 2010 and a 32 percent rise from 2010 to 2020. Despite this, the economic value of sediment retention grew from XAF 715 billion (USD 1,183 million) in 2000 to XAF 1.1 trillion (USD 1,867 million) in 2020, driven by rising demand from water suppliers, hydropower operators, and rural communities, with lowland forests contributing 79 percent of this service. Carbon storage remains a cornerstone of Cameroon’s global ecological contribution, with forests retaining 7.1 billion tonnes of carbon (26 billion tonnes of CO2) in 2020, 64 percent in biomass and the remainder in soils. Lowland forests dominate this stock, though mangroves store twice as much carbon per hectare (614 t/ha compared to 298 t/ha for lowland forests). While carbon retention increased by 6 percent over the period, aided by CO2 fertilization effects, sequestration rates declined sharply from 1.13 tC/ha/year (2000–2010) to 0.56 tC/ha/year (2010–2020). This trend, coupled with early signs of declining sequestration in tropical African forests, raises concerns about a potential shift from net carbon sink to net emitter, with profound implications for global climate stability. Cameroon 2025 Economic Update Fourth Edition  |  59 Box 5:  Valuing Carbon Retention Services in Cameroon´s Forests Cameroon’s forests, storing 7.1 billion tonnes of carbon—equivalent to 26 billion tonnes of CO2—are among the country’s most valuable global public goods. Valued at XAF 35.6 trillion (USD 59 billion) in 2020 using a social cost of carbon (SCC) of USD 100 per tonne of CO2, carbon retention accounted for 96 percent of total ecosystem service value. However, only XAF 52.5 billion (USD 87 million), or 0.3 percent, accrues domestically, reflecting avoided country-specific climate damages. The monetary value of carbon retention surged 92 percent from 2000 to 2020, driven by rising global carbon prices, despite a modest 6 percent increase in physical stocks. Declining sequestration rates underscore the urgency of preserving lowland and peat forests through mechanisms like REDD+ to sustain climate mitigation benefits, particularly as international carbon finance remains insufficient to compensate Cameroon’s global contribution. Box 6:  From Annual Flows to Long-Term Assets: Measuring Forest Wealth Ecosystem service flows, representing annual benefits such as tonnes of CO2 stored or cubic meters of sediment retained, are valued monetarily to guide short-term budgeting and payment for ecosystem services (PES) schemes. In contrast, asset values reflect the net present value (NPV) of these flows over a 100-year horizon, calculated here using a 4.26 percent discount rate. Carbon pricing approaches include the market price (USD 5–25/tCO2, typical in voluntary markets), marginal abatement cost (reflecting alternative mitigation strategies), and the social cost of carbon (USD 100/tCO2, aligned with CWON and IPCC guidance). This distinction is critical for policy design, as flows inform immediate fiscal priorities, while asset values support long-term wealth accounting and intergenerational equity. 3.7 Ecosystem Service Flows and Asset Values The aggregate monetary value of ecosystem services nearly doubled from XAF 19.5 trillion (USD 32.3 billion) in 2000 to XAF 37.2 trillion (USD 61.5 billion) in 2020, with carbon retention comprising 96 percent of the total. Excluding global carbon benefits, the domestic value of services rose from XAF 27 billion (USD 45 million) to XAF 52 billion (USD 87 million), driven primarily by sediment retention (74 percent) and wood provisioning (15 percent). Forest-based tourism, concentrated in montane and submontane zones, tripled in value from XAF 11,507 million to XAF 34,585 million, reflecting growing interest in nature-based experiences. Forest asset values mirrored this appreciation, soaring from USD 748 billion in 2000 to USD 1.42 trillion in 2020, propelled by increasing service volumes and global carbon prices. Peat forests commanded the highest per-hectare value at XAF 219 million/ha, followed by mangroves (XAF 73 million/ha) and montane forests (XAF 43 million/ha). Lowland forests, despite lower per-unit values, dominated the total asset value due to their extensive coverage. 60  |  Cameroon 2025 Economic Update Fourth Edition Table 8:  Annual Ecosystem Service Flows from Forests (2000–2020, constant 2024 USD) Service Type 2000 (USD million) 2010 (USD million) 2020 (USD million) Wood 285 393 577 Wild resources 66 71 70 Sediment retention 1,183 1,356 1,867 Carbon retention 30,791 43,060 58,991 Tourism 19 28 57 Total 32,345 44,907 61,562 Table 9:  Forest Ecosystem Asset Values by Type (2020)) Ecosystem Type Asset Value (USD million) Value per ha (USD/ha) Carbon Share (%) Lowland Forest 1,271,728 2,436 97 Submontane Forest 53,471 2,628 95 Montane Forest 6,962 4,262 93 Swamp Forest 29,937 1,982 94 Peat Forest 1,280 9,393 99 Mangroves 25,779 6,553 98 Forest-Farm Mosaic 34,592 1,248 80 Total 1,423,749 2,336 (avg.) 96 3.8 Key Insights and Strategic Implications Cameroon’s forest ecosystem accounts reveal a natural capital base of immense ecological and economic value, yet one increasingly undermined by rapid transformation and degradation. The accelerating loss of lowland forests, concentrated near urban centers and transport corridors, reflects intensifying pressures from agriculture, settlement, and resource extraction, which outpace conservation efforts. Declining forest condition and biodiversity, exemplified by the loss of habitats critical to species like the Cross River gorilla, amplify these challenges, threatening ecosystem service flows vital to livelihoods, water security, and climate stability. Concurrently, the rising economic value of these services—USD 62 billion annually—and the appreciation of forest assets to USD 1.4 trillion underscore the growing importance of Cameroon’s forests, driven by global demand for carbon sequestration and sediment regulation. Cameroon 2025 Economic Update Fourth Edition  |  61 Spatially, the accounts highlight priority areas for intervention, notably the Centre, Nord, and Est regions, where deforestation is most acute, while stable peat and mangrove ecosystems offer models of resilience. Economically, the disparity between global and domestic benefits is stark: carbon retention, comprising 96 percent of service value, primarily serves global climate goals, with only 0.3 percent accruing to Cameroon. This asymmetry necessitates scaled-up international carbon finance, such as through the Paris Agreement or REDD+ mechanisms, to align local incentives with global contributions. The social dimensions of forest loss further complicate these dynamics. Deforestation and degradation disproportionately affect indigenous and forest-dependent communities, undermining their livelihoods, cultural practices, and access to resources like bushmeat and medicinal plants (FAO 2023). As previously recommended by the 2022 Cameroon Country Climate and Development Report (CCDR), inclusive policies that strengthen land tenure and integrate community priorities are essential to address these inequities. Moreover, forests play a critical role in climate adaptation, mitigating floods, stabilizing soils, and enhancing drought resilience, functions that are increasingly vital as climate extremes intensify. Strategically, Cameroon must prioritize high-value, vulnerable ecosystems—peatlands, mangroves, and intact lowland forests—to maximize ecological and economic returns. Policy instruments should distinguish between short-term service flows, which guide budgeting and PES schemes, and long-term asset values, which inform national wealth accounts and intergenerational equity. Specific actions include implementing conservation incentives, such as tax breaks for sustainable forestry, strengthening enforcement in deforestation hotspots, and leveraging SEEA accounts to monitor sustainability progress. By mainstreaming forest ecosystem values into fiscal planning and global climate frameworks, Cameroon can safeguard its natural capital, ensuring a resilient and equitable development trajectory. 62  |  Cameroon 2025 Economic Update Fourth Edition Box 7:  Insights from the thematic chapter of the June 2024 Cameroon Economic Update on the topic ”Fiscal Instruments for Sustainable Forestry” The previous Cameroon Economic Update provided an analysis of fiscal policies aimed at promoting sustainable forestry management. Below is a summary. Despite an increase in international funding for sustainable forest management in the Congo Basin, commitments remain insufficient and lack clear targets. Funds are inadequately distributed, especially to local communities, communal forests, indigenous populations, rural women, and smallholder farmers. Fiscal policy, though often underused, can complement regulation, information, and voluntary instruments to promote sustainable forest resource use and economic growth. Forest taxation must consider economic, social, and environmental factors to be equitable, transparent, and promote sustainable forest management. Balancing discouragement of harmful practices with support for sustainable livelihoods is key. For example, forest taxes like area fees can have complex effects on logging behaviour, sometimes leading to more intensive logging. Effective forestry taxation requires understanding its impacts. For example, a tax on timber production might harm forest health depending on the production process. The aim is to adjust tax policies to promote sustainable practices, ensuring they meet fiscal goals while supporting forest conservation. Fiscal strategies alone are not sufficient; they are part of a broader policy mix for forest conservation. Success depends on implementing a cohesive strategy that combines regulatory measures, economic tools, and informational campaigns. Effective governance is crucial, ensuring tax policies are applied effectively and promoting collaboration and transparency in sustainable forest management. Integrating sustainability certification into forest-related tax rates is an approach to environmental fiscal policy that aligns fiscal and economic objectives with the preservation of natural assets for future generations. This strategy recognizes the complexities of sustainable production and aims to utilize fiscal instruments to achieve a combination of fiscal, economic, social, and environmental goals. On the institutional side, the collaboration between fiscal authorities and certification agencies constitutes a unified approach to environmental policy. This partnership may affect market dynamics by creating a dual incentive structure, where certified producers are eligible for tax benefits and consumer preferences for sustainable products. Various fiscal policy options could be considered to increase fiscal revenues while promoting income generation, job creation, and sustainable use of wood resources: (i) Adjusting forest tax rates using ecological impact assessments from forest certification agencies, (ii) Promoting forest certification and considering a tax system that imposes higher taxes on non-certified concessions compared to certified ones, (iii) Aligning agricultural tax expenditures with environmental objectives and establishing a monitoring system to ensure effective use of funds, (iv) Facilitate user-friendly digital services for forestry, encompassing permit applications and real-time tracking; additionally, offer training programs for forestry officials and concessionaires, (v) Involving local communities in REDD+ initiatives to guarantee direct advantages and secure performance-based financial support from international donors, (vi) Enacting comprehensive legal reforms in forestry legislation to ensure sustainable management, robust enforcement, and active community engagement, (vii) Establishing international partnerships to obtain funding for forest conservation and climate resilience projects, (viii) Supporting agroforestry and sustainable land management to prevent deforestation and forest damage, (ix) Increasing community involvement and participatory forest management to support sustainable conservation efforts, (x) Develop a local wood processing industry with tax breaks, grants, and vocational training programs. Source: Cameroon Economic Update ‘’Fiscal Instruments for Sustainable Forestry Management’’, June 2024 Cameroon 2025 Economic Update Fourth Edition  |  63 4. Implications of Cameroon’s Forest Ecosystem Service Accounts (FESA) for economic development and policy The trends documented in Section 3—particularly the 79 percent surge in transformed ecosystems, the 152,000-hectare loss of lowland forest in the Centre region, and the decline in biodiversity intactness from 66 percent to 63 percent by 2020—require urgent recalibration of land-use policy and macroeconomic planning. The concentration of deforestation near population centers and along transportation corridors reveals not just ecological stress but a broader failure to align spatial development with ecosystem thresholds. The FESA data show that forest-farm mosaics now dominate large swathes of previously intact lowland forest, especially in Centre and Est regions (see Table 2.1 and Figure X), with rates of conversion rising fivefold in the past decade. These anthropogenic landscapes are typically low in ecological value but high in livelihood reliance—highlighting a critical tradeoff zone for integrated rural development policy. Without spatially differentiated responses— such as targeted conservation in ecological strongholds like Sud, coupled with intensive restoration and agroforestry models in transition zones—Cameroon risks locking in a development trajectory that is both ecologically irreversible and economically suboptimal. These insights also suggest that forest condition metrics—tree cover, canopy height, and landscape naturalness—ought to be integrated into national land-use classification systems and inform fiscal transfer formulas where possible. The forest ecosystem services account presents a static picture of some of the potential values that will emanate from the forest while missing large portions of dynamic values, option values and critical ecosystem complementarities. As with any accounting exercise, the FESA is a good step towards capturing some ecosystem values but not all. What it does not capture, for example, is the dynamic value streams that may emerge from pursuing structural transformation which moves towards a forest-based service sector. It also does not adequately account for the local climate regulation benefits of the forest as these are difficult to quantify yet extremely important as they create the conditions that sustain large swathes of local agriculture. The FESA also does not measure option values. Therefore, the FESA does not reflect the total value of the forest nor the full role it plays in Cameroon’s economy and therefore, its use in decision-making should be that of a “lower bound” estimate. Moreover, the trends observed in the FESA signal not only environmental degradation but also the erosion of a critical macro-fiscal asset base. Forests, as the most substantial component of Cameroon’s natural capital, undergird both domestic service provision and the country’s standing in climate negotiations. Yet the current trajectory—marked by biodiversity decline, carbon sink depletion, and unmonetized ecosystem service flows—suggests a structural underinvestment in this foundational asset. The decline in biodiversity intactness and forest condition, for instance, reduces the future stream of services that underpin rural water access, food security, and hydroelectric stability. Comparative analysis from other forest-rich nations, such as Costa Rica and Indonesia, shows that integrating spatially explicit ecosystem data into fiscal allocation systems and land-use permitting processes can yield co-benefits across economic, environmental, and governance objectives. Cameroon’s current land classification systems—often rigid, production-biased, or politically negotiated—lack integration with ecosystem functionality metrics. This calls for institutional reform and data-driven planning tools that bridge forestry, agriculture, infrastructure, and finance ministries. Furthermore, failure to incorporate forest degradation into macroeconomic diagnostics—such as medium-term expenditure frameworks and climate risk assessments — risks underestimating fiscal exposure to natural capital depletion and overestimating sustainable revenue projections. The FESA, while limited in scope, offers a robust empirical foundation to begin redressing these blind spots. 64  |  Cameroon 2025 Economic Update Fourth Edition The notion that agriculture and forests are locked in a zero-sum land competition is increasingly contradicted by biophysical and economic evidence—Cameroon’s forests do not just coexist with agriculture; they actively sustain it. As highlighted in Section 2, the forest ecosystems of Cameroon provide critical regulating services—cooling microclimates, retaining sediment, and stabilizing rainfall patterns—that underpin agricultural productivity, particularly for climate-sensitive crops like cocoa. When forests are cleared, these services are lost or severely diminished. For instance, forest-induced rainfall is estimated to account for a significant share of precipitation across the Sud and Centre regions—areas that have also seen the highest deforestation rates and corresponding declines in forest condition (see Section 2.2 and 2.3). Replacing forest-derived water regulation with physical infrastructure, such as irrigation schemes or hydropower sediment control, would entail high capital expenditures — costs that FESA does not quantify but are borne implicitly when natural systems degrade. Moreover, the cost of forest loss is nonlinear: pest outbreaks, yield collapse, and heat shocks disproportionately increase as ecological thresholds are breached. These interdependencies indicate the need for cross-sectoral policy coherence. Development wins such as closing agricultural yield gaps or scaling improved cookstoves should be reframed not as climate co-benefits, but as forest-protection enablers. Cameroon’s forests thus represent not only a stock of national wealth, but also a form of climate-adaptive infrastructure whose value far exceeds its timber or clearance potential. While the global value of Cameroon’s forests has been widely discussed, local values are just as important. Contrary to the simple conception that agriculture and forest compete for land, latest evidence highlights how forests support agriculture through their role in controlling temperature and providing precipitation. The cost of replacing forest-provided precipitation with mechanical means, that is irrigation infrastructure, can be prohibitively expensive. Notwithstanding the imperfect substitutability between natural capital and physical capital. The forests of the Congo Basin cool the regional climate by 3-4 degrees Celsius33, providing a critical buffer for cocoa plantations that cannot survive in temperatures above 32 degrees Celsius. Dense forest vegetation helps in the formation of clouds which provide necessary rainfall and cooling34. The local climate regulation benefit of Cameroon’s forest will protect cocoa yields, which is a key cash crop accounting for 15 percent of the total value of exports35, and supporting 90 percent of rural incomes36. Climate change will reduce cocoa yields in Cameroon by 40 percent by the end of the century37, and farmers are already feeling the impacts38,39. However, a key source of resilience for Cameroon are its forests which can attenuate these impacts. Evidence suggests that agro-forestry can be an effective adaptation strategy because it utilises the shade of trees and the cooling services of the forest to shelter against harsh conditions40. 33 Nogherotto, R., Coppola, E., Giorgi, F. and Mariotti, L. (2013), Impact of Congo Basin deforestation on the African monsoon. Atmos. Sci. Lett, 14: 45-51. https://doi.org/10.1002/asl2.416. 34 Ibid. 35 Harvard Atlas for Economic Complexity. Accessed: 05/05/2025 36 Abei, L., and Van Rooyen, J. (2018). “Competitiveness in the Cash Crop Sector: The Case of the Cameroonian Cocoa Industry Value Chain,” in Paper presented at the 56th Annual Conference of the Agriculture Economics Association in South Africa, 25-27 September 2018, Somerset West. 37 Nouck, P. N., Nchoutnji, I., Nchoutnji, R. J., and Ngosong, C. (2019). Impact of climate change on agriculture and food security in Cameroon. Int. J. Environm. Sci. Technol. 16, 1193–1204. 38 Ngo Bieng, M. A., Nkouathio, D. G., and Kuate Tegoum, P. (2018). Perception and adaptation strategies of cocoa farmers to climate change: a case study in three agroecological zones of Cameroon. J. Agri. Environ. Sci. Wiley Online Library, 7, 77–86. 39 Fonjong, L., Lekane, S., and Fobuzie, W. (2019). Climate change, cocoa production and farmers’ livelihoods in the Southwest Region of Cameroon. Climate Dev. Amsterdam: Elsevier, 11, 120–131. 40 Nkem, J., Mala, W. A., and Yinda, G. S. (2021). “Agroforestry as a climate change adaptation strategy in Cameroon,” in Krishnas- wamy, B. A., Singh, R. S., Lal, R., and Lal, R. K. (eds.), Agroforestry for Climate Resilient Agriculture in Southern Africa. Berlin: Springer Nature. p. 293–307. Cameroon 2025 Economic Update Fourth Edition  |  65 Figure 33:  Cameroon’s Export Basket Deforestation-induced hotter temperatures will exacerbate climate and pest-related losses in cocoa yields. Deforestation will amplify the move towards a hotter and drier local climate that will make cocoa production untenable. Capsid bugs and the cocoa pod borer are two pests that cause yearly cocoa output losses of 30 percent−70 percent and 50 percent in affected regions, respectively41. Unfortunately, hotter temperatures and reduced rainfall significantly exacerbate the prevalence of pests across cocoa farms in Cameroon42. A two-pronged strategy is required: forest preservation to regulatelocal temperature to avoid increases in pest populations and heat-related drops in yield, and the immediate deployment of better pest control strategies. A major driver of deforestation in Cameroon is informal palm oil production which needs to be made more efficient to reduce further encroachment. Between 2000 and 2015, 67 percent of oil palm expansion in Southwest Cameroon happened at the expense of forest and was driven by low- efficiency, small-scale informal mills outside large agro-industrial concessions43. Due to an increase in demand for oil palm, further encroachment into the forest is taking place. An alternative, however, is to increase the efficiency of existing oil palm plantations. Closing yield gaps can not only deliver a much needed productivity, but also preserve the forests which are providing critical ecosystem services that sustain agriculture in the first place. To achieve Cameroon’s target to become an emerging economy by 2035, there is a need to diversify the economy to reduce reliance on primary commodities. Over half of Cameroon’s export basket is reliant on petroleum. The other half of the export basket features precious metals, stones, mineral fuels, oil, waxes and primary agricultural output. This exposes the country to significant physical and transition risks linked to climate change, as well as the usual primary commodity risks. Cameroon is locked into low value-add products that have low economic complexity. This is problematic because 41 Mahob, R. J., Taliedje, D. M., Mahot, H. C., Ngah, I. M., Enama, S. E., Cilas, C., et al. (2021). Biocontrol of the brown cocoa mirids using neem oil and an ethanolic extract from neem under laboratory conditions. African Entomol. 29, 507–521. doi: 10.4001/003.029.0507 42 Aikpokpodion, P. O., Adetimirin, V. O., and Daramola, O. O. (2021). Effect of climate change on the incidence and severity of cocoa pests and diseases in Nigeria. J. Agric. Ecol. Amsterdam: Elsevier, 24, 31–38. 43 Ordway, E.M., Naylor, R.L., Nkongho, R.N. et al. Oil palm expansion and deforestation in Southwest Cameroon associated with prolifera- tion of informal mills. Nat Commun 10, 114 (2019). https://doi.org/10.1038/s41467-018-07915-2 66  |  Cameroon 2025 Economic Update Fourth Edition high complexity is a strong predictor of future growth, while low complexity indicates the absence of structural transformation44. As highlighted in the forthcoming Cameroon Country Growth and Jobs Diagnostic (World Bank, 2025), creating more and better jobs and faster economic growth to reach Cameroon’s ambition of becoming an upper middle-income country will require a focus on enhancing productivity and competitiveness, strengthening institutions, and unlocking agglomeration benefits in Cameroon’s main urban areas. The service sector already has become the dominant sector in Cameroon’s economy. However, so far growth of the service sector has been mainly in low productivity areas and improved jobs and growth outcomes depend on improved performance of higher productivity services such as tourism. The conventional orthodoxy that the development of manufacturing must be a precursor to the development of services may not hold in today’s environment, where there is extremely stiff competition in the product space. This is where service-led growth can provide an alternative path to prosperity. For Cameroon, leveraging its globally unique cultural and natural heritage may represent an untapped opportunity for growth which is not threatened by the spectre of global competition the same way homogenous manufactured products are. A competitive tourism sector is likely within Cameroon’s reach. With over-crowding in popular tourist destinations across Europe and Asia, there is a space for new tourist destinations. There is also a growing segment of climate-conscious consumers, as well as middle-class travellers, which Cameroon can tap into by showcasing its unique biodiversity and offering experiences at all prices ranges. Cameroon can look towards Costa Rica, which successfully diversified from an agricultural economy with high levels of deforestation, to a service-based economy centred around tourism as well as some high value-add manufacturing. There are pockets of highly successful eco-tourism examples across Africa, including mountain gorilla tourism in Rwanda and Uganda where the revenues are recycled back to local communities45, and safari tourism across South Africa, Botswana, Tanzania, and Kenya. Cameroon’s natural endowment is an ecosystem with a high potential. Ensuring this ecosystem is effectively monetised to deliver upon developmental goals is strategic and within the realm of achievable possibilities for the country. Unlike extirpating the forest for primary commodities, a forest- based service economy creates more stable jobs, is more gender inclusive, and delivers the necessary structural transformation for sustained prosperity. Cameroon provides not only forests, but also mountains and beaches, making it a complete package if the right infrastructure is developed. Cameroon’s forests also represent one of the most undervalued climate assets in the global economy—delivering planetary-scale carbon sequestration benefits that far exceed the country’s domestic compensation. As highlighted in the FESA, Cameroon’s standing forests retained over 7.1 billion tonnes of carbon in 2020, equivalent to 26 billion tonnes of CO2, primarily stored in its lowland, peat, and mangrove forests. When valued using the Social Cost of Carbon (SCC) at USD 100 per tonne of CO2, the global value of these carbon retention services reached nearly USD 59 billion in 2020 alone, dwarfing the combined market value of all other forest-based ecosystem services. Yet less than 0.3 percent of that value accrues to Cameroon domestically, underscoring a structural asymmetry in the global distribution of climate mitigation benefits. This disparity is not merely technical — it is fiscal, political, and ethical. Cameroon is contributing to global climate stability by maintaining its forests, while bearing the full opportunity costs of foregone agricultural expansion, timber exploitation, and infrastructure development. Although as highlighted 44 Harvard Atlas of Economic Complexity. 45 Maekawa, M., Lanjouw, A., Rutagarama, E. and Sharp, D., 2013, May. Mountain gorilla tourism generating wealth and peace in post‐ conflict Rwanda. In Natural Resources Forum (Vol. 37, No. 2, pp. 127-137). Cameroon 2025 Economic Update Fourth Edition  |  67 above, deforestation is not costless for Cameroon either due to the local benefits provided by its forests The FESA highlights this tradeoff but does not internalize the compensation gap in national accounting systems. A more complete valuation of forest services—including option values and avoided future adaptation costs—could bolster Cameroon’s claims to international climate finance. More importantly, it reframes forest conservation as a strategic macro-fiscal asset, not just an environmental good. Cameroon’s forests act as a globally significant carbon sink precisely because they remain standing and intact — conditions that are not guaranteed in the absence of adequate economic incentives and credible long-term financing. However, the absence of forest-based climate finance does not create a domestic case for unchecked deforestation since such an act will entail significant domestic opportunity costs. The option value of a forest refers to yet undiscovered uses of forest products that yield new economic value streams. There is a vast array of knowledge encoded in the forests of Cameroon. With each deforestation event, a portion of this library of knowledge disappears forever, closing the “option” of discovering and using it in the future. There is strong reason to suspect that the forests of Cameroon have large option values. While the science is nascent and ongoing, there is evidence that new drugs to treat a range of health problems can be developed utilising plant species from Cameroon’s forest. The medicinal potential of Cameroon’s forest plants is potentially immense. Through surveys of indigenous communities at the periphery of Takamanda national park, scientists have learnt that there are 39 forest plant species – 10 of which are very rare – that cure 45 ailments46. A more comprehensive set of ethnobotanical surveys between 2019 and 2021 focussed on Baka people found the use of 378 plant species for medicinal uses and assessed their efficacy by evaluating the presence of active molecules47. Medicinal plants in Korup national park are being used to treat tuberculosis, malaria and AIDS-related diseases48. While latest work has suggested that several of these plants can be used to develop new drugs to manage cardiac problems and act as anti-microbial agents49. Yet despite this vast pharmacological and biological value, the primary ecosystem service quantified in the Cameroon FESA is carbon retention—estimated at 7.1 billion tonnes of carbon or 26 billion tonnes of CO2 in 2020, valued at USD 59 billion using a USD 100/tCO2 shadow price. This valuation accounted for 96 percent of total ecosystem service value in 2020, underscoring the centrality of forests in the global climate mitigation agenda (see Box 2.1). However, only 0.3 percent of that value accrues to Cameroon directly, reflecting a stark global-local asymmetry. The commercialisation of forest plants into new drugs reflects an option value which is wholly unquantified in forest ecosystem service accounts. The challenge with FESA is that it can only quantify that which is known. However, these future value streams may be potentially very large. Quinine, a commonly used anti-malarial drug, was used by the Quechua people belonging to South American forests in its original bark form before the active ingredient was isolated and commercialised. 46 Ndah, N.R., Egbe, A.E., Bechem, E., Asaha, S., Yengo, T., Chia, E.L. and Eyenieh, N.M., 2013. Ethnobotanical study of commonly used medicinal plants of the Takamanda Rainforest Southwest, Cameroon. Afr. J. Plant Sci, 7(1), pp.21-34. 47 Afiong, N.N., Fils, P.B., Guekam, K.K., Muhesi, E.K., Martin, E.A., Brull, G.R., Fa, J.E., Funk, S.M., Fedoung, E.F. and Betti, J.L., 2024. Traditional Use of Medicinal Plants Confirmed by the Baka in Southern and Eastern Cameroon. Journal of Biosciences and Medicines, 12(8), pp.76-106. 48 Fuashi, N. A., and I. S. Moua. “Assessment of medicinal plants potential of the Korup Forest that are used by traditional healers for the cure of tuberculosis, malaria and other HIV- and AIDS-related diseases. Mundemba, SW Cameroon.” African Journal of Traditional, Complementary and Alternative Medicines (2009): 313–313. 49 Ntie-Kang, F., Lifongo, L.L., Mbaze, L.M.A., Ekwelle, N., Owono Owono, L.C., Megnassan, E., Judson, P.N., Sippl, W. and Efange, S.M., 2013. Cameroonian medicinal plants: a bioactivity versus ethnobotanical survey and chemotaxonomic classification. BMC comple- mentary and alternative medicine, 13, pp.1-18. 68  |  Cameroon 2025 Economic Update Fourth Edition Similarly, aspirin originally comes from the willow tree and was also used in its natural form before it was commercialised into a standardised pharmacological product. The markets for both products are staggeringly large. These observations reinforce the need for climate finance models that go beyond results-based payments for avoided emissions and instead recognize forests as repositories of planetary option values. Blended finance instruments — such as sovereign carbon bonds, biodiversity credits, and Article 6 transactions under the Paris Agreement — can be calibrated to reward the preservation of both tangible and intangible ecosystem benefits. Without such valuation frameworks, the economic logic of forest conservation will remain incomplete and skewed against long-term global benefits. Climate finance to establish a forest-based knowledge economy. The aspirations of global climate finance are narrow and miss important future value streams and developmental opportunities. Putting funds towards the research and development of forest-related intellectual property can help create knowledge centres within Cameroon that build up local human capital and unlock potentially hugely valuable drugs for all of humanity. Yet, a forest-based knowledge economy, need not be constrained only to the study of medicinal plants, it can extend to topics across conservation, biodiversity, genetics, and more. The opportunity cost of not preserving these forests is rising sharply as international carbon prices increase and irreversible biodiversity loss accelerates. As noted in Section 2, Cameroon’s forest assets appreciated by 90 percent between 2000 and 2020, driven largely by carbon value growth. Inaction today implies foregoing future revenue streams from high-integrity carbon markets and natural capital instruments, while compounding adaptation costs in agriculture, health, and hydrology. There are also unknown benefits from preserving genetic diversity. For example, the Warneckea ngutiensis, is a forest shrub located in the Southwest region of Cameroon which is critically endangered due to oil palm plantations is highly unique in having a vestigial staminal oil gland, making it of specific interest to science50. Initiatives like the Sustainable Congo Basin Forest Economy Program (SCBFE), under preparation, could help better manage and protect the Congo Basin’s vast forests, which are crucial to biodiversity, climate regulation, and local economies. Availing the above forest-relating financing instruments would significantly incentivize preservation of the Cameroon and Congo Basin forests. For instance, the SCBFE program provides opportunities for innovative financing mechanisms, such as payment schemes for ecosystem services and public- private partnerships, to support sustainable forest management. The authorities should prioritize a comprehensive approach to balancing ecological preservation with economic development, ensuring that the forests continue to provide vital services to both local communities and the global environment. At the national and sub-national levels, deeper analyses could also shed light on other important issues for development, such as forests’ contribution to water quality, and on economic aspects of forest preservation such as urban and rural productivity. Forestry plays a significant role in the management and utilization of green water, which refers to the water stored in the soil and used by plants. Forests contribute to the regulation of green water through several mechanisms (water retention and regulation, ecosystem services, climate change adaptation, natural capital accounting). Valuing water resources remains a complex process that involves various methodologies to capture the economic, environmental, and social values associated with water g51 . Beyond this current edition of 50 World Bank, Valuing Water - The Australian Perspective - Economic Values of Water Under Scarcity in the Murray-Darling Basin -P168160 https://documentsinternal.worldbank.org/Search/33944855 51 Ibid. Cameroon 2025 Economic Update Fourth Edition  |  69 the economic update, the World Bank Team could consider approaches to be used in natural capital accounting for water sector evaluation in the Congo Basin Forest Countries. Concerning the low labour productivity in urban sectors, it could be associated with stronger reliance on natural assets, for instance in peri-urban areas, increasing pressure on forests.   5. Linking Wealth, Forest Ecosystem Services and GDP to Better Capture Long-Term Sustainability This section explores the relationship between national wealth, forest ecosystem services, and GDP and GNI, and provides insights into the sustainability of Cameroon’s long-term growth with respect to its wealth assets. We show how information from the Forest Ecosystem Services Accounts and from the Wealth Accounts can be used to generate adjusted estimates of economic activity that include (a) forest ecosystem services that are typically not captured in GDP estimates and (b) adjusted estimates of GNI and National Savings that consider changes in a country’s wealth. 5.1. Relationship between GDP and ecosystem services Conventional GDP estimates aim to capture the total value of goods and services produced by an economy within a specific timeframe. However, they have faced criticism for their lack of comprehensiveness, particularly in omitting crucial activities such as forest ecosystem services 52 . While conventional GDP calculations traditionally include tangible outputs like timber, wildlife, and tourisms services, they exclude many vital ecological functions. These include sedimentation control and carbon retention services, which are integral to forest ecosystem services accounts. This highlights a significant gap in GDP’s ability to reflect the true economic value of natural resources and environmental sustainability. By not accounting for these ecosystem services, GDP fails to provide a holistic view of an economy’s health and its long-term sustainability, underscoring the need for more inclusive economic indicators. As indicated above, while timber, wildlife, and tourism services are captured by both conventional GDP estimates and the forest ecosystem services accounting, the values reported may differ for a variety of reasons. First are methodological differences in generating these estimates. In particular, the forest ecosystem accounts estimate resource rents (percentage of gross output value) rather than the national accounting approach of value added. Second, in the Congo Basin Forest, many of the timber and wildlife activities are often informal, unrecorded, and in some cases also illegal, which makes it difficult to generate accurate estimates, both in the national accounts and forest ecosystem accounts. For example, while for most of the five CEMAC member countries, the values estimated by the FESA and by the National Accounts for forestry are fairly similar, for Cameroon they differ significantly. The FESA estimates timber services at 1 percent of GDP, while the national accounts estimate them at 4 percent of GDP. A share of sedimentation and carbon retention services indirectly impacts GDP in the form of inputs to the production of goods and services that are captured in GDP. For instance, sedimentation 52 See Costanza, R. et al. (1997), Stiglitz, Sen, and Fitoussi (2009). 70  |  Cameroon 2025 Economic Update Fourth Edition services are important for hydro-power generation while forest’s climate regulation contributes to agricultural productivity. However, the value of these services for the domestic economy, at USD 77 million, was a minimal share of the value created for the world. Most of the carbon retention services generated by the Congo Basin Forest accrue to the rest of the world as a global public good. The estimated monetary value of carbon retention services provided by Cameroon to the world was USD 52 billion in real terms, but the actual market value of carbon is likely to be significantly lower, due to limited demand, verification challenges, and the absence of a well-functioning market for carbon retention from standing forests. Many forest-rich countries like Cameroon face institutional, technical, and legal challenges in measuring, verifying, and selling forest-based carbon credits. There are also limited buyer commitments and low credit prices due to concerns about permanence, additionality, and leakage53.. Some countries, however, have made notable progress. Gabon received USD 150 million under the REDD+ scheme for verified emission reductions 54 . Colombia and Brazil are also leaders in voluntary carbon markets, with robust issuance systems and investments in reforestation and forest protection 55. Additionally, most of the carbon value is considered a global public good, meaning the country itself captures little of the market value unless there is a mechanism for direct payments, such as under REDD+ or a well-functioning Article 6 framework under the Paris Agreement56 (World Bank, 2023). This means that Cameroon and other Congo Basin countries will keep providing the world with key carbon retention services for free, unless substantial global reforms and a much stronger cooperation and commitments are in place, aiming at achieving concrete results. 53 ERC Finance working group report (2023) 54 Source Central Africa Forest Initiative. See https://www.cafi.org/countries/gabon/gabon-receives-first-payment-reducing-co2-emis- sions-under-historic-cafi-agreement 55 See Global carbon market readiness score by Abatable: https://abatable.com/ 56 Article 6 of the Paris Agreement establishes the framework for countries to voluntarily cooperate in achieving their climate targets through carbon markets and non-market approaches, including the trading of emissions reductions Cameroon 2025 Economic Update Fourth Edition  |  71 GNI and Adjustet net national income, USD billion 45,0 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0 0,0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 GNI ANNI Figure 34:  GNI and ANNI, 1995-2020, in USD billion Source: Cameroon FESA report and WDI 100% 87% 78% 80% 70% 63% 60% 40% 20% 0% Equatorial Gabon Central Cameroon Guinea African Republic Figure 35:  Adjusted Net income as percentage of GNI in 2020, Cameroon and regional peers Source: Cameroon FESA report and WDI Adjusted Net Savings, and components 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% 2000 2010 2020 Gross sav ings CFC Education Expenditure Natural resource depletion Carbon and pollution damage Adjusted net savings Figure 36:  . Adjusted Net Savings, and components Source: Cameroon FESA report and WDI 72  |  Cameroon 2025 Economic Update Fourth Edition 5.2. Adjusting gross national income and net national savings for changes in national wealth Adjusting traditional macroeconomic indicators to account for changes in national wealth though depreciation, natural capital depletion, or accumulation of human capital can provide a new perspective on the state of national wealth. Following this, the World Bank introduced in the 1990s two indicators: Adjusted net savings (ANS) and adjusted net income (ANI). The two indicators offer frameworks for integrating environmental degradation and resource depletion into national accounts. ANS measure the true rate at which a country is saving for the future. ANS is estimated as gross national savings (or gross investment, given the savings-investment identity) minus depreciation of produced capital, depletion of subsoil assets (fossil fuels and minerals) and timber resources, and air pollution damages to human health, plus a credit for expenditures on education. Positive adjusted net savings indicate that savings/investment plus expenditures on education (a proxy for human capital) are higher than the exploitation of natural resources, meaning that the country is accumulating assets and wealth. ANI, on the other hand, adjusts gross national income (GNI) by subtracting the depreciation of produced capital and natural capital depletion, offering a clearer picture of income that is sustainable over time. While ANS focuses on savings and investments, ANI looks at income flow and how much of it is eroded by using up natural and physical assets. A negative ANS and ANNI signals that country is consuming more than it is investing or saving, especially at the cost of environmental sustainability. ANNI and ANS are calculated according to the following steps: Gross National Income (GNI): Gross National Savings: Deduct: Consumption of fixed capital Deduct: Consumption of fixed capital Net National Income Net National Savings Deduct: Consumption of natural capital Add: Expenditure on education Result: Adjusted Net National Income (ANNI) Deduct: Natural resource depletion Deduct: pollution damage Results: Adjusted Net Savings (ANS) Source: CWON 2024 and FESA report, Cameron (forthcoming) In Cameroon, both adjusted net national income (ANNI) and adjusted net savings (ANS) followed a similar trajectory—declining between 2000 and 2010, then showing a modest improvement between 2010 and 2020 (Figure 4). Regarding ANNI, after accounting for the depreciation of produced capital (like machinery, buildings) and the depletion of natural resources (such as forests, minerals, and fossil fuels), the country retained 85 percent of its income in 2000, 82 percent in 2010, and 87 percent in 2020 (Figure 2). Compared to regional peers, Cameroon had a relatively lower level of capital depletion in 2020 (Figure 3). On the other hand, ANS, was negative between 2000 and 2010 (-1 percent and -2 percent respectively), suggesting that during this period Cameroon was dissaving — consuming more and not reinvesting enough in education, infrastructure, or environmental protection (Figure 4). ANS then shift to +1 percent in 2020, which suggests that the country started to save more, investing more in education or infrastructure, or managing environmental costs better. There is, however, a concerning trend, in both measures, forest depletion remains high and increasing, reflecting growing pressure on forest resources. The negative values in 2000 and 2010 were warning signs of unsustainable economic practices. The positive value in 2020, although still modest, is encouraging. However, further progress is needed to ensure that this fragile equilibrium is maintained, and higher adjusted net savings are generated. Cameroon 2025 Economic Update Fourth Edition  |  73 74  |  Cameroon 2025 Economic Update Fourth Edition References Abatable. (2024, September). The VCM’s top 40: exploring the countries making waves in carbon markets today. Retrieved from https://abatable.com/blog/top-40-vcm-investment-attractiveness-index/ Antonin, C., Melonio, T., & Timbeau, X. (2011). Adjusted net income. Revue de l’OFCE/ Débats et politiques. CAFI. (2025, May). Central African Forest Initiative. 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