Published by Business Monitor International on Dec 05, 2011 , 63 pages
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BMI View: The broader economic situation in Cameroon is stable and generally positive. Growth is forecast to accelerate slightly over 2011 while inflation is set to remain below 3%. Cameroon is central Africa's largest economy and the port of Douala is a major regional economic hub. The government is currently prioritising infrastructure investment as part of a ten-year economic plan, while Chinese aid and assistance is helping to increase the interconnectedness of the country with the region as a whole.
•The cabinet has identified infrastructure expenditure as a key policy area. The government's policy is based around meeting targets outlined in the 'Growth and Employment Strategy' which aims to average 5.5% GDP growth per year over the 2010-2020 period, as well as cutting poverty rates from 39.9% to under 28%. This government strategy has seen the commencement and acceleration of major infrastructure projects, including the Lom Pangar and Memve'ele dams as well as the Kribi deep sea port. •A deal for a major rail project linking Sudan and Chad was set to be signed in August 2011. The US$2bn project will create a rail line linking Chad to the Red Sea harbour of Port Sudan and to the Cameroonian port of Douala. The project is being funded by loans from the Chinese Import and Export Bank (ChinaEximbank), as part of a broader economic and political cooperation agreement with the African states involved. Chad is a landlocked country and the new link will provide significant new opportunities for international trade, either through Sudan or through Cameroon. •Sundance Resources, a West-Africa-focused miner, said that construction of a major new railway and a deep water port in Cameroon will get underway in the fourth quarter of 2011. Mining companies are sponsoring transport projects in resource-rich frontier markets, especially in Africa and Asia, to address the transport deficit and enable exports. With prices of commodities like iron ore, bauxite, and copper at historically high levels - a trend that BMI's commodities team expects to continue - the commercial viability of sponsoring major infrastructure projects is strong. •China has made the largest ever loan allocation to Cameroon, granting US$542mn for a hydro power project. The African country has struggled to meet electricity demand in recent years as it has had difficulties getting its flagship project - the Lom Pangar hydropower plant - off the ground. The Chinese Export and Import Bank is issuing the loan to pay for the construction of a 201MW hydropower plant on the Ntem River. The Memve'ele dam will be built over the next five years, although more detailed information is still to be released.
Following the October elections that saw incumbent President Biya re-elected for another seven year term, we anticipate that his govrnment's infrastructure-geared economic plan will proceed on a fast pace. As such, we have increased our 2012 and 2013 construction industry value forecasts, to price in the effects of fast-tracked projects.
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