Cameroon has taken a decisive step toward deeper economic integration with the European Union and the United Kingdom by cutting import duties on European goods by 70%. The announcement, made by Finance Minister Louis Paul Motazé, aligns with the Economic Partnership Agreement (EPA) framework, targeting strategic product categories that play a crucial role in national revenue streams. The phased reduction will occur at a steady annual rate of 10%, culminating in the complete elimination of tariffs by 2030.
The first wave of tariff reductions came into effect on August 4, 2019, covering essential goods such as pharmaceuticals, fertilizers, pesticides, computers, liquefied gas, and tractors. A second phase began on August 4, 2023, granting duty-free access to items like plaster, clinker, trucks, trailers, and generators. Now, the third phase targets utility vehicles, fuels, cement, paints, and industrial packaging imported from EU member states and the UK. This gradual liberalization reflects Cameroon’s commitment to fostering trade ties while navigating fiscal adjustments.
Managing fiscal impact without derailing growth
When the EPA was first introduced, concerns arose about potential revenue shortfalls. However, over the past decade, customs receipts have not suffered the expected decline. Official data shows a cumulative loss of just over 103 billion FCFA in customs duties over ten years—roughly 10 billion FCFA per year. While this figure is substantial, it remains within sustainable limits when viewed against the broader economic landscape.
In a surprising twist, Cameroon’s total customs revenue crossed the symbolic 1,000 billion FCFA mark for the first time in 2023. This growth occurred despite shrinking tariffs on European imports, thanks largely to a strategic shift in trade partnerships. Increased imports from Asia, particularly China, have offset the reduction in European trade flows, broadening the tax base and sustaining revenue levels.
China emerges as the unexpected trade leader
The EPA’s design was meant to strengthen ties with Europe, but its implementation has inadvertently accelerated China’s dominance in Cameroon’s trade landscape. Since 2013, China has held the top position both as Cameroon’s leading export destination and its top supplier. The 2024 Competitiveness Report from Cameroon’s Ministry of Economy highlights dramatic shifts in market share.
Between 2016 and 2024, China’s share in the machinery and equipment sector surged from 23.8% to 52.5%, a gain of nearly 29 points. Meanwhile, the EU’s share plummeted from 50.1% to 29.3% in 2023 before recovering slightly to 32.3% in 2024—a decline of nearly 20 points. These figures raise serious questions about whether preferential tariffs for European goods can compete with China’s aggressive pricing strategies in key industrial segments.
Benefits skewed toward a small group of large firms
An analysis of EPA beneficiaries reveals significant inequality in how trade advantages are distributed. By the end of 2023, just 1,021 companies had utilized the EPA’s preferential tariffs, yet fewer than 5% of them captured about 75% of the total fiscal benefits. The disparity extends to company size: large enterprises accounted for 80% of the gains, leaving only 20% for small and medium-sized businesses. This imbalance reflects both the structure of Cameroon’s formal import sector and the uneven capacity among businesses to navigate complex customs procedures.
The Competitiveness Committee also notes that among the top 50 companies leveraging EPA tariff benefits, industrial and commercial sectors dominate the list. With full tariff elimination scheduled for 2030, policymakers now face a critical choice: maintain historical trade ties with Europe or adapt to an economy where China sets the pace. This realignment is already sparking discussions about revising the EPA framework to better reflect current trade realities.