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By Stéphane Mbiankeu Nguea

Executive Summary

Cameroon’s trade deficit dropped by 12.8 % in 2024, but its structure remains unchanged. The country exports raw materials and imports massive amounts of what it could produce itself. This dynamic weakens the industrial base and undermines the quality of employment. World Bank data shows a critical shift: agricultural employment has declined from 66% to 43.4 %, industry is stagnating at 14.5%, while services are booming at 43 % – with over 80% of this in the informal sector. This sector does not train engineers, but rather precarious traders who resell foreign products. To break this cycle, this brief proposes three approaches: (1) in the short term, emergency tariff measures and support for vulnerable sectors, subject to compatibility with WTO and AfCFTA rules; (2) in the medium term, the implementation of special economic zones and progressive quotas for local processing; (3) in the long term, regional integration through the AfCFTA and sustainable structural reforms.

Key messages

  • The declinein agricultural employment does not benefit industry, but inflates an informal tertiary sector to 80%, creating precarious resellers rather than producers.
  • With a stagnant share of employment at 5%, Cameroonian industry is unable to absorb the labor force, exacerbating dependence on foreign products.
  • Reversing the deficit requires local processing quotas and targeted support for threatened sectors, provided that these are designed as progressive measuresand compatible with regional trade commitments.

Introduction

Cameroon’s trade structure is at the center of the challenges of structural transformation. The country must navigate through the gradual implementation of the AfCFTA, the deployment of the import-substitution strategy of the SND30, and the fight against underemployment. In 2024, the trade deficit decreased from 2,004 to 1,747 billion FCFA, a drop of 12.8%. But behind this positive figure lies a worrying reality: Cameroon continues to export the bulk of its agricultural and forestry production without processing it, and it imports consumer goods that its own industries could manufacture. The unemployment rate remains low (5.9%), yet the World Bank data is alarming. Agricultural employment plummeted by 22 percentage points between 2000 and 2024. Industrial employment increased by only 2 percentage points, while services grew by 20 percentage points. At first glance, this paints a picture of an economy shifting toward the service sector. However, these service sector jobs are often survival jobs, created by the retail sales of imported goods. The main question is therefore: is this restructuring of employment a sign of successful modernization, or a symptom of widespread job insecurity fueled by our own trade deficit? This policy brief tends to prove that the deficit has contributed to weakening employment by steering it towards low-productivity activities, thus undermining the industrialization objectives of the SND30. It brings out a diagnosis of the structural causes, an analysis of the sectoral impacts, and the mechanisms of “transfer of precariousness” and innovative recommendations incorporating the guidelines of the SND30.

Diagnosis: the structure of the deficit reflects Deindustrialization

On the supply side: a stagnant productive sector.

Despite limited progress in diversification, Cameroon’s economy remains uncompetitive. The problem lies not in the quality of the workforce, but in high production costs. Electricity is the most striking example. Repeated power outages in industrial zones compel companies to rely on generators, increasing their operating costs compare to foreign competitors. In Douala, a textile factory sees its energy bill double during power cuts, thus reducing its profit margin. Transport infrastructure is another bottleneck. Shipping a ton of goods from Garoua to Douala sometimes costs more than importing from China. Roads are in poor condition, transport corridors are poorly secured, and ports are congested. Logistics, which should be a natural asset for an Atlantic nation, has become a source of revenue for a few operators. Added to this is prohibitively high bank interest rates – over 15% for SMEs that obtain a loan – painting a picture of a stifled production sector. These constraints directly translate into a loss of competitiveness for local businesses, which struggle to compete with imports on price and delivery times.

On the demand side: an eroding national preference.

Cameroon’s population is growing by more than 2.6% annually, cities are expanding, and the middle class is emerging, boosting consumption of processed goods. This is good news for industry, except that this demand primarily feeds foreign factories. Cameroonian consumers are looking for the best value for money. Often, local products arrives late, poorly packaged, and without reliable certification, while imported products are standardized, labeled, and sometimes cheaper. This is not a lack of economic patriotism, but a rational choice in the face of a failing domestic supply. To improve local competitiveness without relying solely on protectionism, some tools exist: certification subsidies (ISO standards, organic products), support for collective marketing, and the development of shared logistics platforms. These measures can reduce the quality – price gap without violating trade rules. Thus, the vicious cycle emerges. The economy does little processing, exports low value-added products, and imports consumer goods along with its raw materials. These imports stifle local industries that could become competitive and create formal jobs. The trade deficit reflects a process of gradual deindustrialization, fueled by dependence on imports and weak local processing.

Sectoral impacts: the major shift towards the informal sector

Agricultural employment declined from 66% to 43.4% between 2000 and 2024, representing a decrease of approximately 2.6 million workers out of a total workforce of over 11 million. Some have retired, while others moved to cities. Industry was expected to be the main beneficiary of this transition. However, the SND30 aims to reduce underemployment to less than 50% by 2030. Currently, it stands at 61.4% – a reduction of only 9.2 percentage points in ten years. At this rate, the target will not be met. Meanwhile, the services sector has surged from 23% to 43%. But Formal services – banks, insurance companies, telecommunications, and government agencies – have seen only a very slight increase in the number of jobs. The vast majority of this growth is due to informal trade: thousands of young people, adults, and sometimes graduates, set up tables on the sidewalk and sell what the shipping containers have unloaded at the port. This can be called a transfer of precariousness: the destruction of agricultural and industrial jobs by low-priced imports pushes workers into small-scale trade, where they resell these same imported products. The trade deficit thus creates precarious informal jobs: low productivity, lack of social protection, and unpredictable income. The consequences are manifold. Cameroon has informalized its economy : 52% of non-agricultural employment is projected for 2024, compared to 30% twenty years ago. The share of salary jobs in the informal sector has declined by 8.7 percentage points (from 41.3% to 32.6%). The overall employment rate is decreasing, with nearly one in two Cameroonians of working age unemployed. From a fiscal standpoint, an informal economy, accounting for over 70%, fails to fund public services. Politically, the economy is vulnerable to external shocks, such as rising prices and the depreciation of the euro, and millions of Cameroonians are falling into food insecurity.

Recommendations

Short term (2026-2027)

  1. Raise CEMAC import tariffswithin the limits authorized by the consolidated rates, targeting a few priority sectors (textiles, agri-food) and planning a gradual decrease to comply with the AfCFTA commitments by 2030.
  2. Introduce a 30% local content clause in public procurement, with exceptions for products not available locally and a phased implementation The government must lead the way, but without creating unjustified trade barriers.

Medium term (2027-2030)

  1. Make the Special Economic Zones ( Kribi, Ebolowa ) operational. They must have guaranteed 24/7 electricity, expedited customs procedures, and direct access to port and rail infrastructures. The economic model for these zones must include requirements for training the local workforce.
  2. Impose progressive quotas for local processing: for example, 50% of cocoa and wood processed in Cameroon by 2030, and 100% by 2035. These quotas must be announced in advance to allow operators to adapt, and withtemporary exemptions in case of capacity shortages.
  3. Make foreign loans conditional on a minimum local content requirement. Any project financed by a bilateral loan should include at least 40% local content. This is not protectionism, but a common-sense clause: one does not borrow money to create jobs at the lending institution.

Long term (2030-2035)

  1. Gradually ban exports of cocoa logs and raw cocoa, with a clear schedule(e.g., a total ban in 2032, following a support phase for local sawmills and chocolate factories). Controls and sanctions are necessary, as well as a transition fund for smallholders.
  2. Harmonize standards and rules of origin within CEMAC and the AfCFTA to enable barrier-free exports within the region. This requires common standards, simplified customs procedures, and mutual recognition of certifications.
  3. Implement the recommendations of the Independent External Observation to strengthen the measures of the SND30, especially inmonitoring andevaluation and inter- ministerial coordination.

Conclusion

World Bank data from 2024 shows that Cameroon’s economy is not modernizing in an inclusive way. Each year, it exports a little more of its potential added value in the form of cocoa beans, logs, and raw cotton, while importing a little more precariousness disguised as consumer goods. Yet, the solutions are known, documented, and quantified. Côte d’Ivoire has transformed its cocoa sector, Morocco, its automotive industry, and Rwanda, its digital services. The measures recommended here will only be truly effective if implemented boldly, but also with commercial prudence. Cameroon has room to maneuver within the rules of the WTO and the AfCFTA, provided it utilizes the available flexibilities (safeguard clauses, development waivers). What is lacking is neither the ingenuity of its entrepreneurs, nor the quality of its resources, nor the potential of its market. It is a coherent strategy that combines temporary protection, productive investments, and gradual regional integration. The choice is political – and it must be made now.