Analysis of the Import-Substitution Policy in Cameroon Since 2015

Introduction

Import substitution is an economic theory aimed at gradually replacing imports with domestic production, in order to reduce dependence on developed countries and protect emerging local industries. In Cameroon, this strategy has been adopted to reduce the trade deficit, stimulate local production, and create jobs. After a brief description of Cameroon’s economy, this article illustrates the rationale for implementing such a policy. The third section provides information on the implementation of this policy in Cameroon before focusing on recommendations to support policymakers.

i. Brief Economic Context of Cameroon

With an average growth of 4% and an inflation rate exceeding 4% over the past three years, Cameroon struggles to meet its domestic demand. The poverty rate remains high (38.5%) according to the National Institute of Statistics (INS). In response, the government implemented an import-substitution policy in 2021, supported by fiscal and structural reforms.

ii. Justification for Implementing an Import-Substitution Policy

The main exports are oil, gas, aluminum, and gold, but the trade balance is negative because low-value products are exported to China, the United States, France, and Belgium. In 2023, the trade deficit stands at 2,004 billion CFA francs compared to 1,428 billion CFA francs in 2022. To be specific, not enough food products are produced to support Cameroonian households. For example, maize, milk, and fish.

• CORN: Cameroon produced 2.3 million tons of corn during the 2019/2020 season, according to Business in Cameroon magazine. This production could not meet the national demand, which stood at just over 2.8 million tons – indicating a deficit of more than 500,000 tons.
• MILK: Cameroon experiences a milk production deficit of about 120,000 tons per year, due to high demand and low production. In 2023, Cameroon imported 20,596.1 tons of milk and dairy products, and 17,217.9 tons of powdered or concentrated milk.
• FISH: According to the Ministry of Livestock, Fisheries, and Animal Industries (MINEPIA), fish production is estimated at 230,000 tons in 2023, a decrease of 1% compared to 2022. The production deficit remains at 270,000 tons due to the gap between production and an annual demand of 500,000 tons.

In addition to a regressive production, the low rate of economic transformation is exacerbated by the embryonic local industry. This encourages the circulation and purchase of imported goods, which depend on the trade balance that was highly deficit, amounting, according to the National Institute of Statistics, to 1.409 billion CFA francs in 2020 compared to 1.478 billion CFA francs in 2021.

As a result of a low production rate and a perpetually deficit trade balance, the government continues to implement an import substitution policy. In section three, the implementation of this policy is explained.

Figure 1: Where is Cameroon’s Production

Source: INS, MINPEMESSA

iii. Political and Strategic Framework (Import Substitution)

The objective of the import substitution policy is to reduce imports of products that Cameroon can produce, strengthen local value chains and food sovereignty, and save foreign exchange. The import substitution strategy focuses on the Piisah plan, “Made in Cameroon”, and reforms likely to boost the private sector and free trade development.

Integrated Agro-Pastoral and Fisheries Import-Substitution Plan (Piisah)

It is estimated at FCFA 1,371.5 billion and will cost the State FCFA 248 billion in 2024, then 511.6 billion FCFA in 2025, and 611.4 billion in 2026. This plan emphasizes the cattle and dairy sectors, rice, wheat, maize, millet/sorghum/soy, fish, and oil palm.

The plan aims to facilitate the development of the private sector in the agro-pastoral domain, in secured and organized areas. She will increase the production and availability of products and create an environment conducive to the development of agropastoral activities.

• “Made in Cameroon” Policy

The “Made in Cameroon” policy aims to promote local products and strengthen the national economy. The Ministry of Commerce is responsible for this policy. This initiative encourages the consumption of locally produced goods, supports industrialization, and reduces dependence on imports. Specific actions include the creation of a “Made in Cameroon” showcase, the promotion of the association of “Made in Cameroon,” and the “Certified Cameroon Origin” label. These efforts aim to highlight local expertise, ensure product quality, and enhance the competitiveness of Cameroonian companies in national and international markets.

• Policy of support for businesses in the finance laws
• Tax Exemptions for SMEs

Three years of exemption for SMEs and a reduced tax rate of 25% for companies with a turnover of less than one billion FCFA. Innovative startups also benefit from an exemption from all taxes, duties, charges, and royalties, except for social contributions, during the incubation phase, for a maximum period of five years.

Customs Exemptions for Agricultural Inputs

Certain equipment and materials intended for the livestock, fishing, and aquaculture sectors benefit from a full exemption for a period of 24 months, extending until December 2025. Customs duties and taxes on improved animal seeds, vaccines and veterinary medicines, as well as on equipment intended for advanced wood processing, are also exempt.

Exemptions on products related to renewable energy

The 2025 Finance Law establishes a 50% reduction on the taxable value of newly imported electric vehicles and motorcycles, etc. Certain equipment and materials intended for renewable energy production are exempted for a period of two years.

Does this policy work?

Meat: Following that, after a 6% increase (235,960 tons) in 2022, the total production of meat and edible offal fell to 347,900 tons in 2023, representing a drastic decrease of 111,940 tons in absolute terms (32.2%) year-on-year.

Seafood: Furthermore, fishery production continued to decline, reaching 190,273 tons in 2024 after 230,000 tons the previous year, a decrease of 39,727 tons (-17.3%). Additionally, only 9,500 tons of fish were produced. However, at the same period in 2023, the head of the government revealed a fish production of 150,086 tonnes.

The poultry sector fared no better. Cameroon produced only 95,501 tonnes of table eggs in 2024. This figure is far from the 123,100 tonnes recorded in 2023. The decline here amounted to 27,559 tonnes (-28.8%) year-on-year. Far from easing the trade balance deficit as envisaged by the government, imports actually increased in the third quarter of 2024, according to Customs data. They reached 1,120 billion CFA francs, up from 1,071.741 billion CFA francs during the same period in 2023.

As a result, the country seems to be moving away from the goal of achieving food self-sufficiency. According to the figures published by the Minister of Agriculture in December 2024, 3.080 million people are food insecure, including 265,314 in urgent need or hunger. This proportion represents nearly 11% of the Cameroonian population, estimated at 30 million inhabitants. The observation is clear: the number of people experiencing food insecurity has increased by 180,000 (+6.2%) in one year despite the launch of the Piisah.

V. Why doesn’t the import substitution policy work?

These problems are mainly related to quality seeds for better yields.

1. Access to production infrastructure and equipment.

The lack of agricultural infrastructure, such as roads, storage facilities, and processing equipment, which are essential to optimize yields and reduce post-harvest losses, limits farmers’ access to markets and necessary inputs. This hinders agricultural productivity, compromises the competitiveness of local products, and consequently obstructs the effective implementation of the import substitution policy.

2. Expansion of Cultivable Areas and Intensification of Production.

To meet growing demand, it is necessary either to increase agricultural yields or to expand cultivable areas. However, stagnant yields and the gaps between potential and actual yields limit agricultural expansion. Land issues, particularly conflicts related to land use, are major obstacles to the expansion of arable land and the intensification of production.

     3. The Weak Organization of Producers

Cameroonian agricultural producers are often poorly organized, which limits their ability to access markets, financing, and quality inputs. This weak organization also hampers the sharing of knowledge and technologies, thereby reducing the efficiency of agricultural production. It is therefore clear that this weakens the implementation of import-substitution policy.

    4. Difficult Access to Inputs

Limited access to agricultural inputs, such as improved seeds, fertilizers, and phytosanitary products, is a major obstacle to improving yields. Many farmers do not have access to these inputs due to inadequate infrastructure and high input costs. This, in turn, affects the productivity and quality of local products.

     5. Lack of Control over Production and Post-Harvest Treatments

Insufficient mastery of production techniques and post-harvest treatments leads to significant losses and reduced quality of agricultural products. The lack of farmer training and the absence of adequate storage infrastructure contribute to these inefficiencies. These gaps reduce the competitiveness of local products in the market, thereby compromising the import-substitution policy.

6. Marketing and Product Competitiveness Issues

Imported products are often perceived as being of better quality or cheaper. Challenges related to marketing, such as limited market access, inadequate transport infrastructure, and the lack of effective marketing strategies, reduce the competitiveness of local products. This situation limits the ability of domestic products to replace imports.

Conclusion

Several gaps still hinder the effectiveness of the import-substitution policy in Cameroon, despite its ambitious nature. Dependence on imports remains high, and local production struggles to meet national demand due to structural and logistical constraints. Therefore, concrete and appropriate reforms need to be implemented. An integrated approach involving the state, the private sector, and producers is essential to ensure the success of this policy and to guarantee sustainable economic development.

Reference List

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