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Fuel Subsidy Lowers Investments in Cameroon

Fuel Station

This is one of the conclusions drawn by the IMF, following the recent publication of the report on the National Accounts of Cameroon in the first quarter of 2022 by the National Institute of Statistics (NIS).

In the first quarter of 2022, public investment in Cameroon fell by 12.4% year-on-year according to the National Institute of Statistics (NIS).  A sharp contraction of public investment was observed during the period under review, a decline in investment in buildings and public works (BTP) of about 6.2% among others. For the International Monetary Fund (IMF), it is not a surprise that Cameroon has reached this point.

The Bretton Woods institution had already sounded the alarm a few months ago on the fact that this situation could happen if the State of Cameroon continued to abuse the subsidy of petroleum products as is the case since the beginning of the Russo-Ukrainian conflict.

Indeed, in the rectifying Finance Law for the 2022 fiscal year, the government has increased the allocation for fuel subsidies to CFAF 480 billion, i.e. 300% compared to the initial budget. The IMF challenged the Cameroonian government, saying that it would be difficult to maintain its subsidy policy, given the drastic rise in international oil prices due to the Russo-Ukrainian conflict.

Published on 05.05.2023

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