The announcement, made through a statement from Cameroon’s Minister of Finance Louis Paul Motazé, aligns with the Economic Partnership Agreement (APE) signed between Yaoundé, the European Union (EU), and the United Kingdom. This reduction targets the third category of products, deemed critical for public revenue due to their substantial contribution to customs income. The phased approach includes an annual tariff reduction of 10%, culminating in the complete elimination of duties by 2030.
The newly implemented cuts apply to utility vehicles, fuels, cements, paints, and industrial packaging originating from the EU and the UK. This initiative extends a timeline already established for the first two product groups. Since August 4, 2023, goods in the second category—covering items such as plasters, clinkers, trucks, trailers, and generators—have entered Cameroon duty-free. Meanwhile, the first group, which includes pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, has enjoyed tariff exemptions since August 4, 2019.
Budget impact remains manageable for Yaoundé
When initially unveiled, concerns arose over the potential strain on Cameroon’s public finances due to the APE. However, the projected budgetary shock never materialized. Official figures indicate cumulative customs revenue losses of approximately 103 billion FCFA over a decade, averaging just over 10 billion FCFA annually. While substantial, this shortfall has been absorbed within the broader economic context.
Surprisingly, Cameroon’s overall customs revenue crossed a symbolic threshold in 2023, surpassing 1,000 billion FCFA for the first time. This upward trend, despite declining tariffs on European imports, stems from a strategic shift in trade flows. Diversification toward Asian partners, particularly China, has offset the revenue erosion from the EU by broadening the tax base.
China emerges as an unexpected beneficiary of the APE
The irony of the agreement lies in its unintended consequences: the preferential tariffs granted to European goods have not diminished China’s commercial dominance. Since 2013, China has held the dual status of Cameroon’s top client and supplier, a position it has relentlessly strengthened. The 2024 report on Cameroon’s economic competitiveness, issued by the Competitiveness Committee under the Ministry of Economy, quantifies this shift.
In the machinery and equipment segment, China’s market share surged from 23.8% in 2016 to 52.5% in 2024, marking a gain of 28.7 percentage points over eight years. Over the same period, the EU’s share plummeted from 50.1% to 29.3% in 2023, before partially recovering to 32.3% in 2024—a decline of nearly 20 points. This dramatic drop raises questions about the effectiveness of tariff preferences for European industries in the face of China’s aggressive pricing strategies.
Benefits concentrated among a select few
An analysis of the agreement’s beneficiaries reveals another structural flaw. By December 31, 2023, fewer than 5% of the 1,021 companies utilizing the APE preferential tariffs captured roughly 75% of the 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 highlights both the structure of formal imports in Cameroon and the unequal ability of businesses to navigate preferential customs procedures.
The Competitiveness Committee notes that « a review of the top 50 companies leveraging APE tariffs shows a clear dominance of industrial and commercial sectors ». With full tariff elimination slated for 2030, Cameroon’s policymakers face a critical dilemma: balancing a historic European partnership with the realities of an economy increasingly dictated by China. Discussions on revising the agreement are already underway, driven by this evolving dynamic.
