Cameroon cuts EU import tariffs by 70% under new trade deal
Cameroon has formally implemented a sweeping reduction in import duties on European goods, a move confirmed by Finance Minister Louis Paul Motazé. This decision aligns with the Economic Partnership Agreement (EPA) framework between Cameroon and the European Union, including the United Kingdom. The adjustment targets the third category of products, identified as critical for public revenue due to their substantial contribution to customs earnings. The phased approach involves a 10% annual reduction in tariffs, culminating in the complete elimination of duties by 2030.
This tariff reduction covers key imports such as utility vehicles, fuels, cement, paints, and industrial packaging originating from the EU and the UK. It follows an accelerated timeline for the first two product groups. Since August 4, 2023, goods in the second category—including plaster, clinkers, trucks, trailers, and generators—have entered Cameroon duty-free. Meanwhile, the first group, encompassing pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, has enjoyed exemption since August 4, 2019.
Fiscal impact remains manageable for Cameroon
When first introduced, concerns arose that the EPA would create a significant budgetary shortfall for Cameroon. However, official data reveals a cumulative customs revenue loss of 103 billion FCFA over a decade, averaging just over 10 billion FCFA annually. Though notable, this figure remains within sustainable limits when viewed against the broader economic landscape.
Surprisingly, Cameroon’s total customs revenue surpassed the 1,000 billion FCFA mark for the first time in 2023. This growth, seemingly at odds with declining tariffs on European imports, stems from a strategic shift in trade flows. Diversification toward Asian markets, particularly China, has offset the revenue erosion from reduced European tariffs by broadening the tax base.
China emerges as unexpected beneficiary of EPA
The trade agreement’s irony lies in China’s unexpected dominance in Cameroon’s import-export dynamics. Since 2013, China has held the top position as both Cameroon’s largest client and supplier, a trend that has only intensified. A 2024 report by the Competitiveness Committee under the Ministry of Economy highlights these shifts in stark terms.
Between 2016 and 2024, China’s market share in machinery and equipment imports surged from 23.8% to 52.5%, a gain of 28.7 percentage points. During the same period, the EU’s share plummeted from 50.1% to 29.3% in 2023 before rebounding slightly to 32.3% in 2024—a loss of nearly 20 points. This decline raises critical questions about the effectiveness of preferential tariffs for European industries against China’s aggressive pricing strategies.
Economic benefits concentrated among a few
An analysis of EPA beneficiaries reveals a stark disparity. By December 31, 2023, only 5% of the 1,021 companies utilizing the EPA’s preferential tariffs captured approximately 75% of the fiscal advantages. The imbalance extends to business size, with large enterprises securing 80% of the gains while small and medium-sized businesses received just 20%. This disparity reflects both Cameroon’s formal import structure and the varying capacities of businesses to navigate preferential customs procedures.
The Competitiveness Committee notes that the top 50 companies leveraging EPA’s preferential tariffs are predominantly concentrated in industrial and commercial sectors. With full duty elimination slated for 2030, policymakers face a pivotal decision: balancing historical ties with Europe against the realities of an economy increasingly shaped by China. This restructuring has already sparked discussions on revisiting the trade agreement’s terms.
