Free Trade Reforms in the 2026 Budget

Introduction

The 2026 budget is 8 683 900 billion versus CFA 7,317.7 billion in 2025, with generous incentives for para-statals and important reforms for Cameroon’s trade with the rest of Africa and the World. While there is no shortage of reforms that will accelerate the transition towards a green economy and the development of agriculture, women, and youth, this article will focus on trade-focused reforms and their implications for the Cameroonian economy.

Cameroon signed the Economic Partnership Agreement (EPA) in 2014 and the African Continental Free Trade Area (AfCFTA) in 2018. While we pursue trade with other countries, intra-regional trade is low, only about 13 – 16% of the total trade with Africa.  For the five countries that comprise the Economic Community of Central African States (CEMAC) to trade more effectively among themselves, they must urgently adopt a unified tariff structure. Here are other aspects of trade that need improvement, such as infrastructure, customs cooperation, digitization, and laboratories to certify products. This article looks at the free trade elements in the 2026 budget and why they matter!

Businesses are Exempt from paying Taxes for New Hires under 35

While Cameroon’s trade with other countries creates employment, an overwhelming majority of such jobs are locked in the informal sector.  In order for trade to translate into real job gains, businesses need incentives to ensure that they pay less and provide more certainty for workers. As a result, Section 105(1) in the 2026 budget provides tax incentives for businesses.

Under the new policy,  firms that hire graduates below 35 for first-time jobs or pre-employment internships shall be exempted from taxes and contributions to salary, but must pay social security contributions. In Cameroon, where 60% of informal sector workers operate informally, this could create a pathway for decent jobs where citizens have the possibility of enjoying retirement benefits. Currently, the rate of old-age poverty in Cameroon is high, as most adults work informal and irregular jobs most of their lives, with no opportunity to contribute to their pensions.

The Cost of Compliance is High

Paying taxes for employees in Cameroon is not straightforward, and most businesses require consulting accountants, which are expensive for SMEs and micro-SMEs.  As a result of this high cost of compliance, entrepreneurs prefer informal employees, saving them the hassle of declaring taxes every month. However, employers who benefit from this policy will have to pay the social security contributions of employees.

“This reform ensures that employees are not burdened by taxes, but ensures that employers contribute towards their retirement. After three years, employers will have to formalize employees, paying both taxes and social security contributions. Fewer administrative procedures for three years are a good signal for entrepreneurs and micro-entrepreneurs.”

Promotion of the Stock Market

The stock market is an important lever for economic development and trade. It helps businesses and banks to raise finance that can be used to advance capital and physical investments, but also trade finance. Section 111(1) of the 2026 budget states that the tax rate on interest and dividends on bonds whose maturity is less than 5 years will be 10% and 5% for bonds with a maturity of over five years. If more citizens invest in the stock market, the second or third round effects can impact bank lending – even as banks ultimately decide what to do with the funds.

Taxes on Exports

Section 11 increases import duties for iron ore, alumina, and tin to 5% of the free on-board value (FOB) value. This is higher than the 2% that was previously charged for semi-processed products. Businesses will begin transforming only when export taxes rise enough to make domestic processing more profitable than exporting raw products. Of course, some countries are rich from mineral exports, but Norway will be much poorer if it didn’t distill its crude into transportation fuel and other derivatives. We should concede that Cameroon is now exporting more processed and semi-processed wood after we ramped up export duties to 60% of the value.

Higher Export Duties Do Not Necessarily Promote Domestic Processing

Policymakers raised export taxes on raw materials like logs to promote local processing by making raw exports more expensive, encouraging companies to invest in domestic value chains, create jobs, diversify exports (e.g., sawn wood, veneers), and capture more revenue within the country, aligning with import-substitution policies to build local industrial capacity and reduce reliance on raw commodity exports. In spite of higher export duties, exports of wood have risen by FCFA 140,4 billion in 2024, so businesses need other incentives and must be aware of what these incentives are.

Meanwhile, the export duty applicable to the export of aluminum, silver, copper, and sapphire as well as non-alloy steel ingots under tariff lines 7206 and 7207, shall be set at 2% FOB value. It’s great to export these, but perhaps we should design incentives together with taxes to ensure that we produce the right grade of minerals and transform them into the most basic products before we export.

Implementation of the harmonized ECCAS-CEMAC Customs Code

Pursuant to Decision No. 5/CEEAC/CCEG/XXV/24 of 18 October 2024 on the adoption of Harmonized ECCAS-CEMAC Customs Code applicable within the Economic Community of Central African States, the Harmonized ECCAS-CEMAC customs code takes effect on January 1st, 2026.  What does this mean concretely? It incorporates the World Customs Organization’s (WCO) Harmonized System (HS) nomenclature, with the most recent updates aligning with the HS 2022 version. The CEMAC CET applies four main tariff rates: 5%, 10%, 20%, and 30%.

“Concretely, it merges the customs regulations of two major regional blocs: CEMAC (6 countries) and ECCAS (11 countries). This means that for the first time, a single legal framework governs trade from the Atlantic coast (Cameroon, Gabon) to the Great Lakes (Burundi) and the southern border of Angola”.

Why does the Harmonized ECCAS-CEMAC Customs Code Matter?

1. It Creates a Single Rule Book for 11 Countries

Before 2026, a trader moving goods from Rwanda (ECCAS) to Cameroon (CEMAC/ECCAS) faced two distinct sets of customs rules, but these have now been consolidated into a single unified legal instrument. In simpler terms, it means that whether you are clearing goods in Douala, Luanda, or Libreville, the administrative steps, document requirements, and dispute resolution mechanisms are now identical. It also supports integration by preventing businesses from picking countries with laxer rules and creates greater predictability.

2. Rationalization of the “Double Membership” Problem

ECCAS has always faced difficulties with integrating as countries (like Cameroon, Gabon, and Chad) belonged to both CEMAC and ECCAS, which often had overlapping or conflicting trade rules. Furthermore, by harmonizing customs, we can integrate CEMAC’s more advanced customs union experience into the broader ECCAS market.

“Transit regimes (moving goods through one country to reach another, like Douala to N’Djamena) are now governed by the same rules, reducing the “hidden costs” of roadblocks and redundant paperwork”.

3. Acceleration of the ECCAS Customs Union

It is important to note that while CEMAC was already a customs union, ECCAS was primarily a Free Trade Area. This harmonized code is the technical guardrail that moves the remaining ECCAS members (Angola, Burundi, DRC, Rwanda, Sao Tome and Principe) toward a full Customs Union. It sets the stage for a future Common External Tariff (CET) across all 11 countries, meaning a product from China would eventually pay the same duty whether it enters through the port of Kribi (Cameroon) or Pointe-Noire (Congo).

Conclusion

I would love to say that Cameroon, the CEMAC, and Africa are going to be more integrated after such reforms. But now we need to implement. This means training customs officials, businesses, and consultants on how to navigate the new rules. Of course, this is going to be a boon for free trade across these countries and encourage trade amongst them (Which is worryingly low), but every stakeholder must play a very active role in making it a reality.

Henri Kouam

Executive Director