In a bold economic move, Cameroon has implemented a 70% reduction in customs duties on European goods, as confirmed by Finance Minister Louis Paul Motazé. This decision aligns with the Economic Partnership Agreement (APE) between Yaoundé, the European Union (EU), and the United Kingdom. The reduction targets the third category of strategic products that significantly bolster the national treasury through customs revenue. The phased approach involves an annual 10% decrease in tariffs, culminating in the complete elimination of duties by 2030.
The new tariff cuts apply to a range of essential imports from the EU and the UK, including utility vehicles, fuels, cement, paints, and industrial packaging. This follows an already established timeline for the first two product groups. Since August 4, 2023, goods in the second category—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 duty-free access since August 4, 2019.
Cameroon’s fiscal balance remains steady despite tariff reductions
When the APE was introduced, critics warned of a potential budgetary shortfall due to reduced customs revenues. However, the anticipated shockwave never materialized. Official data reveals that over a decade, Cameroon’s cumulative customs revenue loss stands at approximately 103 billion FCFA, averaging just over 10 billion FCFA per year. Though substantial, this figure remains manageable within the country’s broader economic framework.
Surprisingly, Cameroon’s total customs revenue crossed the 1,000 billion FCFA mark for the first time in 2023. This unexpected growth, occurring amid declining EU import tariffs, stems from a strategic shift in trade partnerships. Diversifying trade flows, particularly toward Asia, has offset the revenue erosion from European imports by broadening the tax base.
China emerges as the unexpected victor in Cameroon’s APE
The irony of the APE lies in its unintended consequences: while preferential tariffs were granted to European exporters, China has emerged as Cameroon’s top trading partner. Since 2013, Beijing has held the dual role of Cameroon’s largest customer and supplier, further strengthening its commercial dominance. A 2024 report by the Competitiveness Committee under the Ministry of Economy highlights this shift.
In the machinery and equipment sector, China’s market share surged from 23.8% in 2016 to 52.5% in 2024, an increase of 28.7 percentage points over eight years. 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 stark contrast raises questions about the effectiveness of tariff preferences for European industries compared to China’s aggressive pricing strategies.
Unequal benefits favor large enterprises under APE
A closer look at the distribution of APE benefits reveals structural inequalities. By the end of 2023, out of 1,021 companies leveraging the APE’s preferential tariffs, fewer than 5% captured approximately 75% of the fiscal advantages. The disparity extends to company size, with large enterprises securing 80% of the gains, leaving only 20% for small and medium-sized businesses. This imbalance reflects both Cameroon’s formal import structure and the varying abilities of businesses to navigate complex customs procedures.
The Competitiveness Committee notes that an analysis of the top 50 companies benefiting from APE tariffs shows a clear dominance of industrial and commercial sectors. With full tariff elimination slated for 2030, Cameroonian authorities now face a critical dilemma: balancing historical ties with Europe against the reality of an economy increasingly shaped by China’s influence. Discussions on revising the APE framework are already underway, fueled by this shifting trade dynamic.
