Introduction
Cameroon is a democracy located in central Africa with a population of 27.9 million in 2022 and an average GDP growth rate of 4-5% (World Bank, 2024). The country holds elections every seven years, but the political situation of the country has deteriorated since 2016 igniting concerns about the economic impact of the upcoming elections. With the Presidential elections set to take place in 2025, investors and civil society alike are bracing for potential financial implications.
While economic growth will not be directly impacted, it could exacerbate tensions in the South and North West region, damage investor confidence and discourage investments. This article explores the potential economic implications of the upcoming presidential elections in 2025, with a particular focus on political stability, governance, public sentiment, and diplomacy.
Political Context of Cameron
Since 1982, Cameroon has been under the leadership of President Paul Biya, making him Africa’s longest-serving leader. Since then, economic development has progressed slowly, corruption lingers and the English-speaking regions of the North and South West have been locked in perpetual protests since 2016. Meanwhile, Boko Haram is terrorizing the people of Northern Cameroon and imposing forced migration and economic dislocation on the poorest region of the country.
Human Rights and Political Stability
Meanwhile, there have also been concerns about governance and a lack of political pluralism, further reducing the incentives for civil society to participate. There is a human cost to political instability and Human Rights Watch finds that close to 6,000 civilians have been killed by both government forces and armed separatist fighters since late 2016. Meanwhile, fighting has killed over 1,400 civilians, and 125 soldiers, driven 73,000 refugees and 155,000 internally displaced from their homes, and the jihadist groups remain a threat.
Political stability is crucial for economic development and uncertainty causes investors to hesitate about investing in Cameroon. A peaceful and credible electoral process will boost investor confidence, stimulating foreign direct investment (FDI), which is vital for stimulating economic growth in Cameroon. The ruling Cameroon People’s Democratic Movement (CPDM) has maintained a stronghold over the political landscape, but the opposition has always discussed potential alliances to present a united front against the incumbents. Meanwhile, the country has faced some political risks since 2014.
The Anglophone Crisis Persists
As the crisis in the Anglophone regions continued for its eighth year and has already led to the displacement of 598,000 people were internally displaced as of August and at least 2 million people needed humanitarian aid in the North-West and South-West. Separatists are attacking schools, students, and education professionals, destroying buildings, and depriving hundreds of thousands of children of their fundamental right to education.
Boko Haram in the North of Cameroon
The Boko Haram sect began its attacks in Cameroon in 2014 and has continued ever since. Over 80 citizens have been killed since 2020 and over 321,000 people have been internally displaced. Attacks in the far North persist and scores of citizens have been killed between January and April impacting socioeconomic development in one of the poorest regions in the country.
Economic Challenges
Cameroon’s economy relies on exports of commodities such as oil and agricultural products. Volatile oil prices in global markets increase vulnerability and the country is moving to industrialize and diversify via trade and targeted investments. While the economy has grown at 4-5% on average over the last decade, inflation remains above the 3% threshold while over 40% of the population lives below the poverty line. Russia’s war in Ukraine, high interest rates in advanced economies, and the uncertainty in the Middle East have reverberated across the economy, causing the prices of wheat and fertilizer to rise dramatically. The government’s decision to remove fuel subsidies has equally increased the cost of living for all citizens, accentuating the cost of living crisis.
While the economy is fairly stable, dependent on commodity exports and imports of processed materials like fertilizer and automobiles, the election could have notable economic implications. This is why international credit rating agencies like Moody’s and Fitch have maintained our “B” rating and a negative outlook due to political risks linked to the upcoming elections. If the elections are not viewed as fair by the international community, it could ignite concerns about governance and the rule of law. This could negatively impact investment, while inflation could worsen living standards especially as fuel prices will likely be increased to FCFA 1000 in 2025.
Government Spending Priorities will not Change Dramatically
The upcoming elections may influence government spending priorities but will not change it dramatically. The current government will continue to consolidate its debt while prioritizing spending in key sectors and any new government will likely overhaul some investment decisions and prioritise more locally-oriented products. Suppose there is a change in leadership or policy direction. In that case, new investments may be directed toward infrastructure development or social programs to alleviate poverty—currently affecting over 10 million people in Cameroon who are considered poor. We caution against over-investment in social safety nets as Cameoon’s has a fiscal deficit. On the other hand, if President Biya remains in power, there is a risk of stagnation in reform efforts, and little accountability as political aloofness could be rewarded.
Public Sentiment Could Worsen Towards the Government
Public sentiment towards the government is increasingly negative due to high unemployment rates and rising living costs. Inflation is still high but falling, particularly food price inflation which averaged 9.6% in early 2023. The youth demographic—representing approximately 60% of the population—has expressed significant frustration over the lack of job opportunities and economic prospects. Public sentiment in the French-speaking regions will likely stay muted, but in the North West, South West, Baffousam, and Extreme North, there may be calls for greater accountability. There will be calls for accountability across all regions and election tampering is not yet out of the question – the government will and must work hard to ensure free and fair elections.
Governance Will Remain a Key Concern
Cameroon ranks poorly on international corruption indices such as Transparency International, which deters some foreign investments. Cameroon ranks 140 out of 180 countries. The electoral process can be influenced by corruption, which underscored the need to legitimize the upcoming elections with monitors. If governance improves due to electoral outcomes, such an environment will support economic growth.
If governance improves as a result of electoral outcomes—whether through new leadership or reforms from existing authorities—this will create a more supportive environment for foreign direct investment flows. However, Cameroon’s governance problems are institutional and not only linked to the executive. CONAC stipulated that corruption cost the country FCFA 114 billion while the issue of corrupt payments made to SNH (National Hydrocarbons Company) are equally a concern for most.
International Relations Will Stand Pat on the back of Aid
The international context also plays a role in shaping Cameroon’s economic outlook during this election period. The elections will not cause any particular re-think in partnerships, but while the United States and the United Kingdom are more likely to hold us to account, Europe and France will remain on the sidelines. Election monitors will be there, but France’s position in central Africa precludes more active participation.
To maintain donations, the incumbents will try to ensure fairness or the illusion of it. Low voter turnout in the South and North West will boost support for Rassemblement Démocratique du Peuple Camerounais (RDPC) but the young are the sands are shifting and mouvement pour la Renaissance led by Maurice Kamoti is a credible contender of the unity palace. Support or condemnation from foreign governments can affect Cameroon’s diplomatic relations and access to international funding or aid. As a reformist, Maurice Kamto who has faced house arrest and slander can provide a different path for the country, but his policies are credible and not costly. As such, there is concern that big government will make his government impractical.
Uncertainty will Impact SMEs Negatively
To ensure a favorable economic outcome post-election, it will be essential for all stakeholders—including government officials, opposition parties, civil society groups, and international partners—to prioritize transparency and inclusivity throughout the electoral process. By addressing underlying issues such as corruption, youth unemployment, and reliance on commodity exports through effective governance and policy reforms post-election, Cameroon can better position itself for sustainable economic growth in the years ahead.
Conclusion
In summary, the upcoming presidential elections in Cameroon are likely to have profound economic implications. The interplay between political stability, governance quality, public sentiment, and external influences will determine whether these elections lead to positive changes or exacerbate existing challenges.
Dr. Ngale David & Henri Kouam
Research Fellow Executive Director
