By Tansa Musa
Cameroon's economic growth will accelerate to 2.9 percent this year and 4 percent next year but the country will underperform its African neighbours, due partly to a decline in oil production, a recent Reuters poll showed. The economy expanded 2 percent in 2009. The poll of nine economists also forecast that inflation would fall to 2.2 percent this year and 2 percent in 2011, from around 3 percent in 2009. "Cameroon's growth performance is likely to remain weaker than that of most African countries in the near term," said Victor Lopes of Standard Chartered Bank.
Inflation will fall following government measures to control prices of basic goods, analysts said.
The largest economy in central Africa, Cameroon benefits from demand for its resources including timber, cotton, coffee, cocoa and a small output of oil.
While it stands to benefit from an expected increase in commodities prices as global demand picks up, the recovery is seen filtering very gradually through the economy in 2010. Oil output is expected to decline this year due to depleting oil fields and because the global financial crisis delayed drilling of newly discovered fields. However, production should start rising by late 2011.
"The economy will still be facing lapses in different sectors. A growth rate slightly higher than 2009 is possible, between 2.5 and 3 percent," said Babissakana at Yaounde-based financial think-tank Prescriptor.
Lisa Lewin of London-based Business Monitor International was generally upbeat.
"The economic recovery is under way in Cameroon, led by inflation in the commodity complex, which is boosting government coffers, attracting foreign investment and complementing the authorities' efforts to raise productivity in the agricultural sector," she said.
High unemployment may exacerbate social problems and prompt the government to spend money to recapitalise or subsidise public companies facing financial difficulties, particularly in the refining, financial and cotton sectors.
"The cost of this could potentially reach 1.5 percent of GDP," said Standard Chartered's Lopes, noting that veteran President Paul Biya was seen seeking re-election in 2011.//Reuters
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