CAMEROON: TOUGH TIMES AHEAD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000400080001-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 22, 2016
• Document Release Date: August 24, 2010
• Sequence Number: 1
• Content Type: REPORT

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Summa ry
Cameroon has been a model of economic progress and
political stability since it gained independence in 1960
because of the careful use of the country's resources and the
effective leadership of former president Ahmadou Ahidjo, who
resigned in November 1982. Despite this strong past
performance, however, we believe the country will face
significant economic challenges over the next few years as a
result of less favorable international economic conditions and
an overly-ambitious domestic development program. Cameroon's
newly-installed President, Paul Biya, will be required to make
and impose tough economic decisions to keep the country on a
strong development track.
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1975, according to US Embassy sources
broad-based economic expansion between
The Economy--A Synopsis
Steady Progress
Under the Ahidjo regime, Cameroon experienced moderate,
independence in 1960 and
Led by gains in local food and
export crops, real growth averaged 4.6 percent annually through
the mid-1970s. Ahidjo's favorable agricultural pricing policies
helped double the production of cocoa and coffee--Cameroon's
principal exports during the 1960s--to account for over half of
export earnings. Cameroon became the fifth largest producer of
cocoa and ranked high among coffee exporters during this period.
Moreover, Cameroonian farmers diversified their exports to include
cotton, rubber, bananas, palm kernels, peanuts, tobacco and tea.
Cameroon even retained its status as a net food exporter, a rarity
in black Africa. F I
The most dramatic progress, however, was made in
manufacturing, which, according to US Embassy sources, averaged an
impressive 11 percent annual expansion during the period. Led by
agricultural processing, the industrial contribution to GDP had
risen from 10 percent in 1960 to 16 percent by 1975. We believe
this performance was spurred by preferential treatment given to
both domestic and foreign investors under Cameroon's liberal
investment code, which allowed, among other benefits, duty free
imports of raw materials and machinery and exemption from taxes on
products and profits for three to 10 years. Numerous industries
also were developed to produce a wide variety of consumer oods,
including shoes, textiles, soap, and paper containers.
Yaounde, during the first 15 years of independence, relied
heavily on its former colonial ties to France to develop the
modern sector. France was Cameroon's major trading partner and
aid donor, providing both generous financial and technical
assistance for construction projects, marketing facilities, and
improved agricultural production and education. French managers
dominated banking, foreign trade, industry, and plantation
agriculture. Membership in the French-backed Central African
Customs and Economic Union (UDEAC) also facilitated trade between
Cameroon and other member African states because of the shared
convertible currency.
more rapid growth,
Weathering World Market Price Fluctuations
Like many LDCs, Cameroon benefited from the tropical products
boom in the mid-1970s, which helped the country pull out of the
world oil shock of 1973-75. Our analysis indicates that increased
cocoa and coffee revenues and Western donor assistance were the
primary forces behind the growth in real GDP, which climbed from
1.5 percent in 1975 to 4.0 percent yearly during 1976-78,
approximating the average of the previous 15 years. Even with the
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surging public and private outlays boosted
___], inflation remained manageable largely because Yaounde's
restrictive credit policies and public sector wage restraints
damped consumer demand without crimping investment. In fact,
average annual domestic investment to 20 percent of GDP during
1976-78, five percentage points above the share at the start of
the decade. Although our analysis indicates investment-induced
borrowing caused the external debt--largely to France and the
United States--to top $1 billion by 1978, the debt service ratio
remained low at only 8 percent (see Table 1).
The Impact of Oil
We believe Cameroon has been more successful than West
Africa's two other major oil producers--Nigeria and Gabon--in
managing its oil windfall. US Embassy reporting indicates the
government has employed oil money and other financial resources to
build up other sectors of the economy, specifically agriculture
and industry. As a result, by the end of 1981 economic growth had
topped 6 percent for the third year in a row. Oil production
increased by more than 25 percent to 88,000 barrels per day (b/d),
while agricultural output increased--although at a rate somewhat
lower than earlier years--as a result of the government's
favorable pricing policies and good weather conditions.
Industrial performance was also strong, led by food processing
activities. F-1
In addition, Cameroon moved ahead in reducing its chronic
current account deficit. More than $1 billion in 1981 oil
revenues again offset depressed cocoa and coffee receipts.
Yaounde's fiscal policies also held nominal import growth that
year to little more than 10 percent. As a result, we estimate
that Yaounde had by then contained its current account deficit to
under $200 million (the lowest since 1977), an amount easily
financed by foreign donors and bankers against the collateral of
Yaounde's oil potential. Although the external debt climbed to
$2.4 billion by the end of 1981, the 15 percent debt service ratio
was still fairly low for an LOC. Typical of many LDCs in the
throes of an oil boom, however, Cameroon began to experience
increased demand-generated inflationary pressures as public
expectations rose sharply. F]
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Table 2
Previous Economic Plans
First Five-Year Plan: 1960/61 - 1965/66
Cameroon s first pan was prepared by two private French
consulting firms and covered only French-speaking Cameroon. When
reunification occurred in October 1961, the program was
subsequently extended to the whole country. This plan emphasized
agricultural production, roads and railways, and social
projects. Total planned investment amounted to $148 million
(current dollars). n
Second Five-Year Plan: 1966/67 - 1970/71
Although the second plan was written primarily by French
consultants, it was the first to use various planning structures
at the local, department, provincial and national levels. It was
also the first plan to set up a program to achieve Ahidjo's goal
of doubling per capita income by 1980. The plan was known as the
"Farmer's Plan". Education, transportation, and industrialization
efforts were also emphasized. Total spending amounted to $462
million. F-1
Third Five-Year Plan: 1971/72 - 1975/76
ne third plan was the first written by Cameroonians. Its
preparation also involved more local participation than either of
the two preceeding plans. The third plan was labeled the "Plan of
Production and Productivity" because of its emphasis on industrial
development and commerce. Total spending amounted to $784
mil lion. F-1
Fourth Five-Year Plan: 1976/77 - 1980/81
In addition to those local elements that participated in the
preparation of the previous two plans, the drafting of the fourth
plan included village development committees, sectoral study
groups, and the provincial and national planning commissions. The
fourth plan also brought modern methods of growth analysis and
statistics into the planning process. In particular, the fourth
plan focused on projects to eliminate bottlenecks, especially the
still-acute transportation deficiencies, that hinder a more rapid
development of the economy. Investment costs during the fourth
plan amounted to $2 billion.
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We believe that economic growth during 1932 probably equaled.
1981's impressive rate but at some cost. The slack world oil
market and increased domestic consumption reduced oil export
earnings to only about $850 million. This downturn, along with
still depressed sales of cocoa and coffee, cut total export
earnings to only about $1.5 billion, down nearly $400 million from
1981 and the lowest since 1979. With import and service charges
on the rise as Yaounde accelerated its 1981-86 development
program, we'believe the current account deficit hit some $650
million, which available data indicate is the largest since
independence.
the international banking community have
reported no signs that Yaounde had problems financing this
shortfall.
we estimate that Cameroon borrowed about $400 million
that the government had been accumulating as a financial cushion
since the start-up of its oil production. F-]
from various international sources. The remaining $250 million
came from an estimated $900 million in overseas oil investments
Looking Ahead
The Financial Picture
Cameroon, unlike most of its West African neighbors, has an
opportunity to regain and maintain a strong financial position
over the next several years. We believe, however, that this will
require the Cameroonian government to make extensive and
politically risky adjustments in the current development program
(see Appendix B). These would involve cancelling or delaying
indefinitely many prestige projects which are the basis for
regional industrialization schemes. The government would have to
carry out a careful balancing act to ensure that various interest
have Ahidjo's prestige, however,
groups particularly those in English-speaking West Cameroon, do
not feel that they are suffering disproportionately from budget
reductions. Such changes could probably be carried out fairly
easily if Ahidjo were still at the helm. President Biya does not
Should Cameroon manage to implement the fifth development
plan as it now stands, we estimate that the country will face a
cumulative current account deficit of $4 billion to $5 billion
over the period 1982-86 (see Table 3) and will ave an overall
debt by the end of 1986 in excess of $6 billion . In addition, we
believe Yaounde will be forced to draw down its remaining $650
million financial buffer (oil earnings held abroad)--perhaps as
early as next year--just to make ends meet. (See Appendix D).
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Cameroon could, as a result, be forced to turn to the IMF foF
balance of payments assistance or perhaps to the London or Paris
Clubs for debt rescheduling by the end of the decade. F7
Yaounde also expects to borrow $1.8 billion from foreign
government sources; $500 million from the Franc Zone and another
$1.3 billion in aid credits from Western donors. Again, we are
not optimistic that Cameroon will be able to borrow these
amounts. The Franc Zone itself is in severe financial straits
because of chronic foreign exchange shortages of the Zone's member
countries, while Western donors, especially France, are being more
selective in their aid disbursements to help restore their own
financial position. F7
In addition to financial problems, implementation of the plan
will also be affected by manpower and transport deficiencies (See
Appendix B). With less than 5 percent of the population
possessing any technical skills, the country has a severe shortage
of qualified labor and must depend on expatriates, mainly French,
to fill most of the technical and managerial positions. The
transport network is grossly inadequate, with most roads
impassable during much of the year. 7
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The Political Scene
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Cameroon's prospects now clearly depend on newly-installed
President Biya's ability to consolidate his power and handle the
economy. Cameroonian officials and international development
experts agree that the country's economic future requires major
investments in agriculture to maintain Cameroon's rare ability
among African states to feed itself. This, however, would be
possible only at the expense of more popular projects in industry--
such as the Kribi liquified natural gas (LNG) project2 --and
social programs involving education, health and housing. 0
We are concerned how Biya will implement any needed program
cuts to minimize popular disaffection. Particularly worrisome, in
our opinion, will be the reaction of residents in English-speaking
western Cameroon, who have long resented what they believe is
second-class treatment by a French-dominated bureaucracy in
Yaounde. Biya is from French-speaking southern Cameroon, and we
assume that he is well aware of the potential for local unrest if
he does not appear sympathetic to the concerns of his western
constituents. His task will be complicated by the fact that all
of the country's current oil production is off the western coast,
and we believe that regional politicians are carefully monitoring
how oil money is being used to improve local living standards.
I
Biya's track record since he assumed office in November is
encouraging. US Embassy sources indicate that his succession has
been accepted calmly by Cameroonians. In addition, Biya has used
his administrative talents to make some politically adroit moves
and to consolidate his position. In our view, his appointments of
cabinet ministers from the country's principal tribes and his
choice of a Muslim northerner as prime minister--his
constitutional successor--reflect his awareness of the political
need to balance This status as a non-Muslim, southern minority
tribesman.
We view Cameroon's military and internal security forces as
generally apolitical and able at least for now to keep any anti-
government movements from taking root. According to US Defense
Attache reporting, these forces are disciplined, well-trained, and
have a reputation for preventing dissension. Should domestic
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negotiation and renegotiation.
force and the promise of a share of the olitical spoil 25X1
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keep Cameroon's many 25X1
disparate tribes working together. 25X1
allowances than the army-- to maintain internal order. Biya
almost certainly will also adopt Ahidjo's use of the threat of
unrest develop, Biya, like his predecessor, will probably reety on
the national police and gendarmerie--which receive better pay and-'
share of the cost of any economic slowdown.
Still, 'we cannot rule out domestic unrest based--at least in
part--on economic grievances. We believe, in particular, that the
military could become increasingly disenchanted with the
government if spending cuts prompt a sharp decline in economic
activity and the lower ranks are forced to support financially a
growing number of family members. The military will probably also
be watching to ensure that it is not required to bear an excessive
American influence in Cameroon, according to US Embassy
reporting, has grown considerably in recent years. President
Ahidjo visited Washington in 1982, following a visit to Cameroon
of Secretaries Block and Baldrige earlier in the year. Cameroon
has purchased US military hardware and civilian aircraft, and an
increasing number of US "s and financial institutions are
setting up operations.
Although many US companies have found advantages in doing
business in Cameroon they also cite several drawbacks:
--The need to accommodate to the French system--language,
customs, business practices--which, over the years, has become
firmly entrenched in Cameroon.
--The increasing role of corruption.
--The ponderous red tape that limits the ability of a company
to realize a profit in under 18 months.
--The need to justify expatriate positions to Cameroonian
authorities and the requirement that Cameroonian nationals
must fill certain other positions within a specified time
limit.
--Finally, what businessmen see as a total lack of
communication between responsible Cameroonian officials and US
company representatives, which results in protracted contract
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We agree with the US Embassy's assessment that the recent
change in leadership in Yaounde provides the US with an
opportunity to expand its role, as Biya looks to the country's
traditional benefactors for support. This opportunity could be
short-lived, however, if Washington fails to meet growing
Cameroonian expectations for financial and technical assistance
We believe Cameroonian officials assume--because of Ahidjo's
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successful visit to Washington in 1982 and the trade and
investment mission earlier in 1982--that Cameroon has a new,
special relationship with the United States. Yaounde, in our
view, expects substantial aid, especially in agriculture. The
country probably also expects an even larger amount of private US
investment in support of priorities outlined under the five-year
plan. F7
If, as we expect, US and other Western donors do not provide
aid and investment on the scale envisaged by Cameroonian
officials, we believe that Cameroon has little choice but to
reduce substantially its current development program. Yaounde
theoretically could turn to Moscow or Tripoli for assistance, but
we believe Cameroon's pro-Western, anti-Soviet and anti-Libyan
biases will prevent it from seeking help in those quarters. US
Embassy reporting indicates that the present Cameroonian elite has
not forgotten that the USSR and other Communist states provided
material support for an unsuccessful tribal insurgency by
Cameroonian dissidents in the early 1960s. Even if Biya were to
approach the Soviet Union or Libya, these countries' own economic
difficulties almost certainly would prevent them from providing
more than token assistance. F-1
Moreover, we do not believe that, in the event of a coup,
Cameroon's new leaders would seek the military assistance that the
Soviets and Libyans sometimes offer in an effort to expand their
influence with fledgling governments. In our judgment, a new
military regime, at least initially, would continue to look to
France--the army's traditional source of arms and training--for
help. US Embassy and Defense Attache reporting indicates that the
Cameroonian military has been thoroughly screened for -Years to
root out any personnel with suspected leftist views.
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made planning in Cameroon a lengthy and arduous process.
Former President Ahidjo's determination to use certain
aspects of both a free market and a centrally planned economy has
Appendix A
Development Planning in Cameroon
Laborious Planning Process
the government determines both
meanwhile, is encouraged with various tax and investment
incentives.
the pace and direction of economic development, but the public
also participates in the planning process; private enterprise,
Unlike economic planning in many other African countries and
various states throughout the Third World, the planning process in
2 Cameroon is not a pipe dream. Interviews in-country with members
of the country team and Cameroonian officials and ordinary
3
citizens alike document that the nearly two-year-long procedure,
does, in fact, take place and involves everyone from high
government officials down to village elders. 0
The document that emerges from this process deals exclusively
with development projects and programs. It does not set
production targets for the private sector. In that regard, it
differs sharply from French indicative planning, even though the
early plans were drafted by French advisors.
According to Cameroonians involved with the current
development program, the planning process begins with the
President providing general guidelines and a time-table for the
work to be done. The President thereafter usually does not become
involved in the procedure until the completed document reaches his
desk for signature.
Once the President initiates the process, officials drawn
from national, provincial and department (district) government
levels review the previous plan, looking for ways to streamline
it. Following completion of the review process, the Minister of
Economy and Planning sets up study groups of senior government
officials to identify development priorities within each sector of
the economy. Similar groups are established at the provincial and
department levels.
The various study groups then prepare a detailed plan for
meeting sectoral priorities. This work.
quires sop is ica e statistical techniques such as linear
regression and time-series analysis. Manpower and logistical
needs are also considered. These reports are used later in the
process to au e the practicalities and priorities of proposed
projects.
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Meanwhile, village committees throughout the country decide
what projects they want implemented over the next five years.
these committees consist of local
political leaders, tribal rulers, local businessmen, and
"prominent sons of the area." Their reports, though
unsophisticated and often little more than wish lists, are taken
into consideration,
officials higher up the line.
by planning
The villagers' reports are discussed at subsequent regional
meetings up to the department level in each of the provinces.
Projects are added to the villagers' lists based on their
viability and on how well they mesh with the department's sectoral
projections. impractical
projects are dropped while others may be added for political
reasons. Completion of the department's development proposal is
timed to coincide with completion of the national and provincial
sectoral reports. n
The department's proposals along with the provincial sectoral
assessments are remanded to the provincial planning commissions--
which, consist of representatives
from both government and private industry--to be incorporated into
the provincial development plans. The sectoral studies help to
measure the practicality of the projects presented in the
department plans. 0
The national planning commissions then meet to consider the
reports prepared previously by the national sectoral study groups
and the preliminary provincial development plans. These planning
commission members weigh the merits of the provincial plans
against the statistical projections of the national sectoral
studies. Embassy sources report that these commissions, staffed
by officials from MINEP and other government ministries, are
responsible for the first draft of the five-year development
plan. The Minister of Economy and Planning reviews the document,
makes appropriate revisions and then submits it to the various
ministries for approval. Once the ministries have approved, the
draft goes to the National Assembly. Only after this long and
involved process does the plan receive presidential signature.
Administration and Implementation
The Ministry of Economy and Planning, in addition to acting
as the focal point for preparing the plan, is responsible for its
implementation. After the plan is completed, it is returned to
the Minister of Economy and Planning. He then presents the plan
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S
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to each of the provinces. Each provincial governor in turn
presents the plan to each department, and the departments present
it to the villages. Each level of government reviews the changes
made to its own draft plan at the national level, incorporates
them, and begins implementation. 0
Each governmental body (province, department, or village) is
responsible.. for implementing its part of the plan. For major
projects, particularly those of great interest to the head of
state, however, the Ministry of Economy and Planning takes an
active role. MINEP, together
with the Ministry of Finance, holds the purse strings for large
undertakings and thus wields considerable control over project
implementation. For less prestigious projects, MINEP allows local
jurisdictions more leeway, although it still maintains financial
control through the Ministry's Office of Control. F7
Because the planning process is so extensive, with the
details concerning implementation of a project worked out in
advance, executing the plan is generally straightforward.
the various ministries are
and completed, and even manpower needs and transportation routes
are worked out.
expected to undertake projects in the order in which they are
ranked in the plan. In addition, timelines are drawn up for each
project, which dictate when particular phases must be undertaken
delayed, altered, or abandoned--usually,
Even with careful planning, however, projects are sometimes
, because of insufficient financing or tec nica
problems. Although on-site engineers judge whether technical
difficulties are insurmountable, MINEP officials make the final
decision on altering the project's timetable or focus. Where
financial problems are involved, MINEP consults with Ministry of
Finance officials before making a decision. F7
Financing
All financial aspects of the development plan are the shared
responsibility of the Ministry of Economy and Planning and the
Ministry of Finance. Other ministries are involved only when
questions arise on projects under their jurisdiction.
Costing-Out the Plan
Project costs are reviewed at each level of the planning
process, particularly at the federal level. Although wealthy
local businessmen fund some of the smaller projects, larger
undertakings are heavily dependent on government financing.
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Financial details for each project--particularly any foreign
`
exchan
e re
ui
t
-
g
q
remen
s--are first worked out at the provinci
level to evaluate the feasibility of the proposals from the
department and other lower levels of government.
some projects are dropped at provincial review
because o inadequate financing. For those that are approved
a
,
cost schedule and financial arrangements are drawn up to be
reviewed by the National Planning Commission (NPC). Projects that
survive NPC scrutiny are incorporated into the final plan document
that is presented to the President for signature. ul
Receipts Projections
In terns of public financing, three sources are explored;
investment budget funds, money held in an account outside of the
budget (oil earnings from the government's share of production),
and borrowing from both domestic and foreign sources. e
The investment budget represents the funds remaining for
development purposes after recurrent expenditures and debt
servicing requirements are met. These projections are the
budgetary savings line-item in the local public financing section
of the financial plan.
All government oil earnings aside from taxes and royalties
are formally omitted from the plan. These revenues are set aside
to be used when financial ~ertfalls affect the implementation of
high-priority projects.
Expected government domestic borrowing, called local public
loans, is listed under the local public financing section of the
financial plan. Other local public resources, which
are probably contributions from parastatals and
central bank resources, account for the remainder of local public
financing. Foreign aid projections, which make up the external
public financing entry, include loans already obtained,
anticipated loans, and subsidies.
Sources of private funds are not detailed in the financial
plan, but government officials claim such money represents
commercial loans from foreign bankers and lending by private
Cameroonian citizens and companies.
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Appendix B
Cameroon's 1981-86 Development Plan
Government Goals
The current development plan--the most sophisticated to date
in preparation and democratic in terms of participation--is
targeted at consolidating the gains of previous plans (see Box-
Table 2), meeting more of the economic and social demands of the
Cameroonian people, and extending the diversification of the
economy (see Table 4). To reach these goals, the government seeks
to exploit more fully Cameroon's abundant natural resources--
particularly oil and natural gas. In addition to developing its
petroleum industry, Yaounde wants to move ahead on several other
major programs; in order to:
-- Accelerate regional economic development.
-- Maintain self-sufficiency in food.
-- Expand the production of traditional export crops.
-- Increase utilization of domestic raw materials in
industrial production.
3
The Plan by Productive Sector
Primary Sector
The major goals for agriculture in the new plan are to meet
the country's food needs and to expand production of agricultural
exports. The government believes, and we agree, that a critical
element in meeting these objectives is to avert large-scale or
excessively rapid rural/urban migration, which Cameroonians claim
is responsible for the disastrous agricultural performance in
neighboring Nigeria. As a result, the plan's agricultural
investment strategy is aimed at making rural life more attractive
to Cameroonians. Key targets are to keep producer prices high and
improve the availability of credit, fertilizers, and other
agricultural extension services. n
Secondary Sector
In the manufacturing sector, Cameroonian government officials
are focusing on agricultural processing and light manufacturing
industries. The plan calls for a significant expansion in the
processing of local raw materials and intermediate goods for both
domestic consumption and export. Continued exploitation of
petroleum reserves and hydroelectric power sources along with
development of natural gas and bauxite also rank high on the
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Table 4
The Fifth-Five Year Development Plan
million US $ (1981)
Investment
Percent of Total
TOTAL
Primary Sector
1896.6
23.7
Agriculture
1512.5
18.9
Livestock and Fisheries
288.1
3.6
Forestry
96.0
1.2
Secondary Sector
1312.5
16.2
Industry
640.2
8.0
Mines and Power (Including Oil Developmen
t) 672.3
8.4
Tertiary Sector
614.6
7.7
Commerce
55.5
0.7
Transport
383.0
4.8
Tourism
176.0
2.2
Attendant Sectors
2916.6
36.4
Communication Infrastructure 1692.3
21.1
Ports and Waterways 96.0
1.2
Roads and Bridges 978.0
12.2
Railways 220.3
2.7
Aviation and Meterology 152.0
1.9
Post Offices and Telecommunications 246.0
3.1
Town Planning, Equipment, Research 1224.3
15.3
Town Planning and Housing 880.3
11.0
Territorial Development 48.0
0.6
Administrative Buildings 192.0
2.4
Research 64.0
0.8
Studies and Surveys 40.0
0.5
1264.3
15.8
Education/Training 704.2
8.8
Youth and Sports 112.0
1.4
Information/Culture 128.0
1.6
Health/Social Affairs 320.1
4.0
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government's industrial development priorities list. The
government anticipates an increasing role for both foreign and
domestic investors and includes in its development strategy
provisions for revamping its investment code and tax structure.
Tertiary Sector
Along with increased industrial production, Yaounde is
looking to a major expansion in commerce, transport, and
tourism. To enhance the role of its budding tourist industry as a
source of foreign exchange, Yaounde plans to develop several new
tourist sites and construct 3000 additional motel rooms. The
government hopes to hold several international trade fairs and
construct new warehouses, storage facilities, and commercial
markets. Other investments involve acquiring trucks, rail cars,
aircraft, and other kinds of transport machinery and equipment.
For communications, investment is aimed at both improving
existing facilities and expanding links both domestically and
internationally. In terms of transport, investment projects
include:
-- Construction of 2000 km of roads and 1190 meters of
bridges.
-- Reinforcement of 1200 km of roads.
-- Realignment of the Transcameroonian railway.
-- Extension of Douala port to include fruit and minerals
terminals.
-- Construction of a deep-water port near Kribi,
-- Expansion of Douala airport to accommodate large transport
planes.
-- Construction of new airports at Garoua and Bafoussam.
In addition, the plan envisages improving the country's internal
and international telecommunications network, upgradinnthe mail
service, and constructing new post office buildings. u
The plan also includes new initiatives in town planning, town
expansion and development research. Urban development projects
include a major expansion in the availability of potable water and
electricity, improved drainage and sanitation facilities for
Douala and Yaounde, a 14,000-unit housing program, and the
creation of industrial zones. Development research will highlight
iuving food crop production, animal husbandry, and nutrition.
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3
Social Benefits
Education
Government planners hope to build the 17,000 classrooms and
train the 20,000 teachers they anticipate will be needed to handle
the projected doubling in school enrollment by 1986. Increased
attention will also be paid to technical and vocational education
to fill the country's needs for skilled manpower. Other proposals
include the establishment of a national education fund and a
public relations campaign to encourage Cameroonians to become
teachers.
Health
In recognition of the country's inadequate system of health
care, Yaounde has proposed a major expansion in health services.
Some of the more ambitious programs include the construction of 41
hospitals and 36 mother and child care facilities, and the
training of nearly 4,000 medical and para-medical personnel.
Preventive medicine will receive new emphasis, as will more active
participation by village communities in good health care
practices.
Youth and Sports
The primary goal of this aspect of the plan is to enhance the
ability of Cameroonian youth to adjust to modern values while
retaining some ties to their cultural heritage. Government
officials believe this approach is the best way to minimize the
possibility of a sharp increase in juvenile deliquency that they
see elsewhere in black Africa. Investments include constructing a
national institute for youth and sports (with 5 regional centers
and three sports stadiums), purchasing equipment, and improving
existing sports facilities.
Financing the New Plan
The fifth five-year plan calls for investment totaling some
$8 billion, four times that under the previous plan. Financing is
to be split 60/40 between public and private sources respectively
(see Table 5). The largest component of public sector financing
is budgetary savings, or the amount of public revenues left after
current operating costs are covered. According to the financial
plan, Cameroon expects these savings to total $1.6 billion over
the life of the plan. Other local public resources--central bank
holdings and contributions from parastatals--are to contribute
another $1.4 billion. The remainder of public financing will come
from borrowings against the country's Franc Zone account, $500
million; and external borrowing, $1.3 billion. Private financing
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Table 5
The Financial Plan
Million US $
Percent
8004.6
100.0
Public Financing
4801.6
60.0
Local Public Financing
3479.4
43.5
Budgetary Savingsi
1586.6
19.8
Other Local Public Resou
rces2 1370.9
17.2
Local Public Loans3
521.9
6.5
External Public Financing
1322.2
16.5
Loans Already Obtained
372.3
4.7
New Loans to be Contract
4
ed 775.9
9.7
Subsidies
174.0
2.1
Private Financing
3203.0
40.0
lAccording to the plan, these are government revenues remaining after current
operating expenses are covered.
2Cameroonian officials suggest this money represents contributions from
parastStals and central bank resources,
3Cameroon can borrow up to 15 percent above their reserves on deposit in the
Central Bank of Equatorial Africa, the local Franc Zone bank.
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As noted in the text of this paper, we believe Yaounde will
be hard-pressed to come up with anything close to the funds
specified in the plan. This is largely because Yaounde's chief
benefactors--Paris especially--have financial problems of their
own and are slowing new aid commitments. In addition,
international lending institutions are nervous about LDC lending
because of the Mexican and Brazilian financial crises. Moreover,
what we see as the overestimation of oil revenues for the period
will limit the government's own domestic resources available for
development purposes. F-1
Other Implementation Problems
We believe that aside from financial considerations,
deficiencies in manpower and transport will impede completion of
the plan. Excessiv ed tape and bureaucratic inertia will also
slow the process.
especially worrisome. Currently,
Inadequacies in the country's transportation system are
, the country's transport network consists o :
is to supply the remaining $3.2 billion. Government planners
anticipate funds will come from international financial
institutions and private businessmen. F-1
serious problems that affect the flow of traffic. Except for a
few roads in the major cities, the country's road system, by far
the dominant mode of transport, is in disrepair. In addition,
most roads are made only of gravel and earth, and are frequently
Although the transport network is fairly extensive, there are
--65,000 km of roads.
--1165 km of railways.
--Two principal seaports, Kribi and Douala, and two
secondary ports, Victoria and Tiko.
--One seasonal river port at Garoua.
--The international airport at Douala and 12 smaller
domestic airports scattered throughout the country.
the state-owned railway consistently operates at a loss because o
shortages of rolling stock and locomotives and managerial and
41
operational deficiencies. Douala port, which handles 90 percent
of the country's trade, operates at only 50 percent of capacity
because of poor administration and bottlenecks in such areas as
customs. Air transportation is not reliable because of fre uent
delays resulting from management and maintenance problems.
Skilled manpower shortages will also have an adverse effect
on the country's development plans. According to the 1976 census-
-the last available--the Cameroonian work, force accounts for 40
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percent of the total population, of which
83 percent are engaged in agriculture and lack other
skills. Of the remainder, employed by industry and government,
Embassy reporting indicates most are also unskilled. Even those
who have received several years of education have pursued a
predominantly liberal arts curriculum with few science and
engineering courses. As a result, the country is dependent on
expatriate labor--mostly French--for filliost of the technical
and managerial positions in the economy. p m
Agricultural development could suffer the most from manDOWer
and transport deficiencies.
Ithe country's ability to feed
itself is declining because of outdated technology, rural
migration, and difficulties in moving products to markets posed by
poor roads and lack of trucks. These economists believe that
Cameroon will become a net food importer by 1990 largely because
it will take at best a minimum of 10-12 years to rebuild
agriculture even if the government moves now to address the
problem.
US Embassy sources, who believe the Cameroonian government is
aware of the farm problem, cite Yaounde's designation of
agriculture as the country's top development priority. In
addition, planners have drawn up a series of policy initiatives
that they hope will persuade highly productive farmers either to
stay in or return to the countryside. These include annual raises
in producer prices for both food and cash crops, increased
training in advanced farmig_techniques, and expanded availability
of agricultural credit.
Nevertheless, we anticipate serious problems in implementing
these projects. The absence of skilled administrative personnel
for example, will impede the ability of the government to process
applications for farm credits and to offer new extension services
on a wide scale. In addition, few Cameroonians are qualified to
be extension agents. Moreover, any increase in production would
place serious strains on the country's already weak transport
system. This is especially a problem for perishable crops such as
bananas and cocoa.
Cameroon will be lucky to in half of its goals for agriculture
because of these factors.
Other facets of the country's development program will also
feel the impact of manpower and transportation deficiencies, in
our view. Industrial projects can be expected, at a minimum, to
fall behind schedule due to delays in machinery and equipment
deliveries at the port and the ability of most roads to handle
heavy loads for only 5 to 7 months out of the year. Social
projects--particularly health care and education--will lag because
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of insufficient personnel, while lack of timely deliveries bT
equipment and raw materials will push back the timetable for
completing the plan's ambitious housing program. n
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Appendix C
Making the Most of Oil
Oil is a prominent feature in any Cameroonian
scenario. We estimate it accounts for 50 to 60 percent of fnrninn
exchange earnings.
development
L'1517
Cameroon currently produces about 100,000 b/d of oil. By
1987, according to oil industry estimates- nrndiurtinn ehniilrl no ;d,,
at 157,000 b/d.
The present energy chief is Samuel Libock, Director of
Cameroon's national oil company, Societe Nationale des
Hydrocarbures (SNH). Although industry decisions ostensibly are
made by the SNH Board of Directors, Libock clearly is the
government's primary spokesman, according to Embassy sources.
During the past several years, he has moved to tighten Cameroon's
grip on the oil industry to the dismay of US oil companies
operating in Cameroon.
the oil production from each company operating in Cameroon.
-- In December 1978 Libock announced a new law that required the
government's share of production to be no less than 40 percent of
-- The following year, Libock asked the French oil company Total
to draft an additional agreement regulating Yaounde's share of oil
revenues. The primary change involved an increase in the
government's share of total revenue from what we estimate was
about 75 percent to 87 percent, with the additional amount to come
out of company profits. After some modifications, the Cameroonian
government decided these provisions would apply to all other
companies as well. Total and ELF, another French firm went along
with the proposal, but the various US oil companies--Gulf, Mobil,
and Shell Pecten--resisted, claiming that they already had valid
-- SNH then turned to ELF--the only firm currently producing oil
in Cameroon--to prepare another agreement that would control
timetables for debt amortization and repatriation of profits by
all oil companies. Copies became available to oil companies in
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the spring of 1981. Only ELF, Total, and the US firm Shell=:'
Pecten, which shares its concessions with ELF, have signed the new`
operating convention.
content to leave Libock in charge of oil policy.
We believe that Libock did not act on his own in imposing
these additional restrictions. Since former President Ahidjo
frequently shuffled senior government officials to remind them
that he was in control, it is our opinion that he would have
removed Libock if the latter were not in fact following
Presidential orders in such important matters. In addition, we
believe that Ahidjo monitored very closely overall oil policy
decisions and would have moved quickly to stop Libock from doing
something not in Cameroon's interests. For the time being, Biya--
probably preoccupied with consolidating his own position--seems
In our view, Libock's decisions clearly benefit Cameroon in
terms of increasing Yaounde's share of oil revenues. We also
believe that his actions may reflect government concern over the
short life-span of current oil reserves.
we know that Yaounde expects
prouUCLIQ I Wi I SGdrL Lo ueciine sometime in the i us. we ao not
know, however, the assumptions the government is using in making
this projection.
J
We believe Libock's behavior could also reflect Yaounde's
bowing to French pressure. Libock could be deliberately trying to
force US oil companies out of Cameroon, leaving the field open to
French firms. US Embassy sources report that French oil companies
relinquished to American oil concerns what are now relatively
large oil deposits in Ivory Coast and do not intend to suffer tha
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