Cameroon slashes EU import tariffs by 70% under new economic pact
Cameroon has officially launched a sweeping tariff reduction initiative, as confirmed by Finance Minister Louis Paul Motazé, aligning with the Economic Partnership Agreement (EPA) involving the European Union and the United Kingdom. This phased approach targets the third category of goods, deemed critical for national revenue due to their substantial contribution to customs income. The strategy involves a steady annual tariff decrease of 10%, culminating in full elimination by 2030.
The initial phase of this reduction applies to key industrial inputs and materials, including utility vehicles, fuels, cements, paints, and industrial packaging imported from the EU and the UK. This follows an accelerated timetable for the first two groups of goods. Since August 4, 2023, items in the second group—such as plaster, clinkers, trucks, trailers, and generators—have entered Cameroon duty-free. Meanwhile, the first group, which encompasses pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, has enjoyed similar exemptions since August 4, 2019.
Fiscal impact remains manageable for Cameroon
When these agreements were first introduced, concerns arose about potential budgetary shortfalls due to reduced customs revenue. However, actual losses over the past decade have been relatively contained. Official data indicates cumulative tariff revenue losses of approximately 103 billion Central African CFA francs (FCFA), averaging just over 10 billion FCFA per year. While substantial, these losses have been absorbed within the broader economic framework.
Remarkably, Cameroon’s total customs revenue surpassed the 1,000 billion FCFA mark for the first time in 2023. This counterintuitive growth—despite declining tariffs on European imports—stems from a strategic shift in trade partnerships, particularly toward Asia. Diversifying trade flows has effectively offset revenue erosion from the EU, broadening the tax base and sustaining overall fiscal health.
China emerges as an unexpected beneficiary of the EPA
The irony lies in the fact that while Cameroon granted preferential tariffs to European goods, China has emerged as the dominant trade partner. Since 2013, China has held the top position both as Cameroon’s largest client and supplier, a trend that has only intensified. The 2024 competitiveness report by the Ministry of Economy’s Competitiveness Committee highlights this shift in stark terms.
Between 2016 and 2024, China’s market share in machinery and equipment imports surged from 23.8% to 52.5%, a leap of 28.7 percentage points. During the same period, 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. This dramatic shift raises questions about the effectiveness of tariff preferences for European industries when faced with China’s aggressive pricing strategies.
Only a fraction of businesses reap the benefits
An analysis of the EPA’s preferential tariff utilization reveals significant structural disparities. As of December 31, 2023, out of 1,021 companies leveraging these tariffs, fewer than 5% captured roughly 75% of the fiscal benefits. The imbalance extends to company size, with large enterprises accounting for 80% of the gains, leaving the remaining 20% for small and medium-sized businesses. This disparity underscores both the formal import dynamics in Cameroon and the varying capacities of businesses to navigate preferential customs procedures.
The Competitiveness Committee notes that « the top 50 companies utilizing EPA preferential tariffs are predominantly from the industrial and commercial sectors ». With full tariff elimination slated for 2030, policymakers now face a strategic dilemma: balancing historical ties with Europe against the realities of an economy increasingly shaped by China’s dominance. This recalibration is already fueling discussions on potential revisions to the agreement.
