Cameroon has initiated a sweeping reduction in import duties on European goods, cutting tariffs by 70% as part of its obligations under the Economic Partnership Agreement (EPA) with the European Union and the United Kingdom. Announced by Finance Minister Louis Paul Motazé, the phased tariff reduction targets a strategic group of products critical to public revenue, including vehicles, fuels, cement, paints, and industrial packaging. The annual decrease is set at 10%, culminating in the complete elimination of these duties by 2030.
The current adjustment applies to the third category of goods, following similar measures for earlier groups. Since August 4, 2023, imports such as gypsum, clinkers, trucks, trailers, and generators from EU and UK markets have entered Cameroon duty-free. The first group, which includes pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, has enjoyed the same exemption since August 4, 2019.
Cameroon’s fiscal balance remains resilient despite tariff cuts
Critics initially warned that the EPA would severely impact Cameroon’s fiscal health, but official data shows the feared revenue collapse has not materialized. Over the past decade, customs losses from the agreement total approximately 103 billion CFA francs—an average of just over 10 billion per year. While significant, this figure remains manageable within the broader economic context.
Surprisingly, Cameroon’s total customs revenue surpassed 1,000 billion CFA francs for the first time in 2023. This upward trend, occurring alongside declining tariffs on European imports, reflects a strategic shift in trade partnerships. Diversifying commercial ties, particularly with Asian markets, has offset revenue erosion from the EU by expanding the tax base.
China emerges as the unexpected winner of Cameroon’s trade shift
The EPA’s preferential treatment for European goods has not curbed China’s growing dominance in Cameroon’s trade landscape. Since 2013, China has held the top position as both Cameroon’s largest customer and supplier, a trend that continues to strengthen. Data from the 2024 Competitiveness Report, compiled by the Ministry of Economy’s Competitiveness Committee, highlights this shift.
Between 2016 and 2024, China’s market share in machinery and equipment imports surged from 23.8% to 52.5%, a gain of 28.7 percentage points. Over the same period, the EU’s share plummeted from 50.1% to 29.3% in 2023 before slightly rebounding to 32.3% in 2024—a decline of nearly 20 points. This sharp contrast raises questions about the effectiveness of the EPA’s tariff advantages in countering China’s competitive pricing strategy.
The benefits of the EPA are concentrated among a few
An analysis of the EPA’s beneficiaries reveals another structural flaw. By the end of 2023, only 5% of the 1,021 companies utilizing the agreement’s preferential tariffs accounted for 75% of the fiscal benefits. The disparity extends to company size, with large enterprises capturing 80% of the gains, leaving just 20% for small and medium-sized businesses. This imbalance underscores both the structure of formal imports in Cameroon and the unequal capacity of businesses to navigate preferential customs procedures.
The Competitiveness Committee notes that the top 50 companies benefiting from the EPA’s preferential tariffs are predominantly from the industrial and commercial sectors. With full exemption slated for 2030, policymakers face a pressing dilemma: balancing the historical ties with Europe against the realities of an economy increasingly shaped by China. The ongoing trade reconfiguration has already sparked discussions on potential revisions to the agreement.
