Cameroon’s economic growth faces headwinds as hilli episeyo gas unit prepares for departure
A critical countdown has begun for Cameroon’s economic trajectory. The Hilli Episeyo, a vital floating liquefaction unit that has been stationed offshore Kribi since 2018, is slated to exit national waters in July 2026. This departure marks the conclusion of the contractual agreement between its owner, Golar, and the Société Nationale des Hydrocarbures (SNH). The National Economic and Financial Committee (CNEF), in its report assessing the first quarter of 2026, identifies this impending exit as a central variable contributing to an anticipated economic deceleration, alongside ongoing geopolitical tensions and underperformance across several key export sectors.
Detailed projections from the CNEF indicate that Cameroon’s Gross Domestic Product (GDP) is expected to expand by approximately 3.2% in 2026, a decline from the 3.5% recorded a year prior, further easing to 3.1% in 2027. An alternative, slightly more optimistic scenario within the same document forecasts growth rates of 3.3% and then 3.2%. Under both hypotheses, the underlying rationale remains consistent: the extractive sector is poised to exert downward pressure on overall growth, contributing a negative 0.4 percentage points in each of the two fiscal years. Specifically, the petroleum GDP, encompassing all hydrocarbon-related activities, is projected to contract sharply by 16.1% in 2026, followed by an even steeper 18% decline in 2027.
lng sector already weakening ahead of vessel’s exit
The cessation of the Hilli Episeyo’s operations coincides with an already fragile liquefied natural gas (LNG) market. Revenues generated from LNG exports reached 350.2 billion FCFA in 2025, a noticeable drop from 381 billion in 2024, 421 billion in 2023, and a peak of 622 billion in 2022. This represents an 8.1% year-on-year reduction. This downward trend persisted into the beginning of the current year: during the first quarter of 2026, Cameroon’s total exports decreased by 23.6% to 606.9 billion FCFA, with LNG exports alone falling by 28.4%, and crude oil exports by 14.4%.
Despite the recent declines, LNG still accounted for a significant 11.4% of Cameroon’s export revenues in 2025. The withdrawal of this floating production unit therefore deprives Yaoundé of a foundational economic asset at a time when other critical sectors are also experiencing downturns. Over the same period, sales of cocoa and its derivatives plummeted by 37.7%, timber exports by 11.5%, aluminum by 53.7%, and raw rubber by 16.7%. The combined effect of these sector-specific contractions is set to amplify the impact of the impending gas shock.
current account under pressure, delicate budgetary choices ahead
The nation’s macroeconomic stability is expected to absorb a significant blow. The CNEF projects a current account deficit of 5.4% of GDP in 2026, widening further to 6.1% in 2027, a stark increase from the estimated 3.2% in 2025. The budget deficit is anticipated to follow a similar trajectory, reaching 1.7% and then 2.1% of GDP respectively. These forecasts also integrate factors such as a slowdown in global trade, rising freight costs, and only moderate growth in public revenues.
Furthermore, the escalation in global oil prices presents a classic policy dilemma for the government. Maintaining stable fuel prices at the pump would necessitate increasing fuel subsidies, incurring an immediate budgetary cost. Conversely, adjusting retail prices upward would likely reignite inflationary pressures and erode household purchasing power. The CNEF refrains from recommending a specific course of action but underscores the extremely limited room for maneuver available to policymakers.
yoyo-yolanda and new blocks: no immediate relief
SNH is actively pursuing a strategy to diversify its upstream portfolio, aiming to prepare for the post-Hilli Episeyo era. A cornerstone of this strategy is the transboundary Yoyo-Yolanda field, shared with Equatorial Guinea, which boasts estimated geological resources of approximately 2,500 billion cubic feet and requires an investment nearing 4 billion dollars. However, the project’s timeline remains contingent upon the finalization of crucial technical and commercial agreements, securing necessary financing, and the construction of dedicated infrastructure.
In parallel, the state-owned company is continuing to allocate new exploration blocks within the Rio del Rey and Douala-Kribi-Campo basins. Nevertheless, the initiation of production sharing contract negotiations does not guarantee the discovery of commercially viable reserves, nor does it assure rapid production commencement. The primary risk, therefore, lies in the protracted nature of this transition period: the longer the interval between the floating unit’s departure and the activation of new production capacities, the more entrenched the negative contribution of the extractive sector to Cameroon’s economic growth will become. Industry observers suggest that none of the currently announced initiatives are poised to offset the programmed decline in LNG exports in the short term.
