Cameroon

The
Economic Freedom
Network

Cameroon

			Total Government Expenditures
Economic Freedom Rating			As a Percent of GDP


Part 1: The Economic Freedom Ratings for the Components and Various Area and
Summary Indexes: 1975, 1980, 1985, 1990 and 1995.
(The numbers in parentheses indicate the actual values for the components.)

Components of Economic Freedom	1975		1980		1985		1990		1995
I. Money and Inflation	3.1		3.3		4.2		4.7		3.0
(a) Annual Money Growth (last 5 yrs.)	6	(12.3)	1	(22.2)	4	(14.8)	10	(0.3)	9	(-6.2)
(b) Inflation Variablity (last 5 yrs.)	4	(5.3)	9	(1.9)	9	(1.5)	5	(4.2)	1	(14.5)
(c) Ownership of Foreign Currency	0		0		0		0		0
(d) Maint. of Bank Account Abroad	0		0		0		0		0

II. Government Operation	6.0		6.3		6.0		4.8		3.8
(a) Gov't Consump. (% of Total Consump.)	8	(13.1)	9	(10.4)	8	(14.0)	7	(14.5)	7	(15.1)
(b) Government Enterprises	4		4		4		4		4
(c) Price Controls	-		-		-		2		2
(d) Entry Into Business	-		-		-		-		5.0
(e) Legal System	-		-		-		-		0.0
(f) Avoidance of Neg. Interest Rates	-		6		6		8		4

III. Takings	9.2		10.0		6.3		5.0		4.9
(a) Transfers and Subsidies (% of GDP)	9	(1.4)	10	(0.8)	10	(0.6)	8	(2.7)	9	(1.9)
(b) Marginal Tax Rates (Top Rate)	-		-		2	(60)	1	(60)	0	(66)
(c) Conscription	10		10		10		10		10

IV. International Sector	2.4		2.7		4.5		3.8		3.3
(a) Taxes on International Trade (Avg.)	0	(13.4)	1	(11.0)	5	(6.1)	6	(5.4)	3	(7.7)
(b) Black Market Exchange Rates (Prem.)	7	(2)	7	(2)	8	(1)	6	(4)	8	(1)
(c) Size of Trade Sector (% of GDP)	3	(24.1)	3	(25.7)	5	(28.8)	2	(20.8)	1	(20.1)
(d) Capital Transactions with Foreigners	0		0		0		0		0

Economic Freedom Rating	4.8		5.2		5.3		4.6		3.9
Ranking of Country	28		24		26		56		92

Part 2: Recent Economic Indicators:
Population 1996:	13.7		Real Per Capita GDP			:	1995=	$1,098
(in millions)			(in 1995 U.S. dollars)
Annual Rate of Change (1985-96):	2.7%			Avg. Growth Rate:			1980-90 =	-0.6%
							1990-95 =	-4.0%

Economic Indicators:*	1988	1989	1990	1991	1992	1993	1994	1995	1996
Change in Real GDP:Aggregate	-7.2	-6.0	2.1	-0.4	-4.4	1.0	-18.0	5.8	-
: Per Capita	-9.9	-8.7	-0.6	3.1	-7.1	-1.7	-20.7	3.1	-
Inflation Rate (CPI)	1.7	-1.7	1.1	0.1	-0.1	-3.2	35.1	13.9	-
Change in Money Supply: (M1)	0.4	7.2	-7.5	2.7	-27.9	-14.1	35.1	-11.6	-
: (M2)	2.0	6.1	-1.7	1.8	-21.9	-9.2	26.5	-6.2	-
Investment/GDP Ratio	27.7	27.2	29.0	-	-	-	-	-	-
Size of Trade Sector (% of GDP)	19.4	21.0	20.8	19.9	20.3	20.1	-	-	-
Total Gov't Exp./GDP Ratio	-	20.1	21.3	21.7	18.2	-	-	-	-
Central Government Budget
Deficit (+) or Surplus (+)
As a Percent of GDP	-	-3.2	-5.8	-5.2	-2.1	-	-	-	-
Unemployment Rate

* The figures in this table are in percent form.

After increasing from 4.8 to 5.3 between 1975 and 1985, Cameroon’s economic freedom rating plunged to 3.9 during the last decade. It ranked 92nd among the 115 countries of our study in 1995.

From the viewpoint of economic freedom, the major strengths of this economy are the absence of conscription and a largely convertible currency—the black market premium in the foreign exchange market has generally been small.

The major weaknesses are:

The widespread presence of government enterprises;
A weak, often discriminatory legal system;
High marginal tax rates (the 66% top marginal rate was exceeded only by Italy in 1995);
Restrictive trade practices (high tariffs and a small trade sector); and
Restrictions on the mobility of capital (direct investments abroad must be approved by the Ministry of Finance).

As Cameroon has moved to a more restrictive economy, its growth rate has plunged. Real per capita GDP has fallen at an annual rate of 4% thus far in the 1990s.

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Last Modified: Wednesday, October 20, 1999.