A new growth engine is emerging in Cameroon

In Cameroon, the oil windfall has been gradually declining from year to year. According to the 2026 Finance Act forecasts, oil GDP is expected to represent only 2.2% of total GDP, compared with 4.0% in 2023. In this regard, we choose to see the glass half full. Economic growth is gradually moving away from a structural drag linked to the ageing of oil fields. However, the budgetary impact is more difficult to absorb. Oil revenues are expected to account for only 1.4% of GDP in 2026, compared with 9.6% three years earlier. This economic transformation, which appears rather abrupt, carries out many implications :

• Economic growth would be increasingly driven by the development of key sectors such as Electricity, Construction and Public Works, Telecommunications, and Finance. Consequently, it would be less exposed to commodity price volatility;
• In the future, after a phase of sharp decline in mature oil fields, the oil sector could paradoxi-cally contribute positively to growth in the medium term. This outlook would be supported by the new refining unit whose construction was launched in 2025, as well as by the expected results of new drilling operations in the Rio del Rey basin, the Thali project, and in the northern fields;
• The economic transformation implies a proactive investment policy which, in the absence of a significant rebound in ordinary revenues, would entail substantial financing needs.

In this context, the new measures introduced in the 2026 Finance Act broadly pursue a dual objective. On the one hand, these aim to support domestic demand, a key pillar of growth in Cameroon. On the other hand, these seek to simplify the tax framework in order to significantly broaden the taxpayer base and, in turn, strengthen revenue mobilization.

Cameroon: A mixed growth outlook for 2025

According to estimates from the Ministry of Finance, FY2025 growth is expected to stand at +3.9%, slightly below the forecast set in the 2025 Initial Finance Act (IFA) by –20 BPS. This gap is explained by:

• The deceleration in oil GDP, which remains a drag on economic growth as it continues to underperform due to the ageing of oil fields. As a result, this component is expected to decline by ¡V4.9%, compared with an initial estimate of ¡V1.0%, following contractions of ¡V9.7% in 2024 and ¡V1.8% in 2023. By end of 2025, oil GDP would account for only 2.5% of total GDP (2025A), compared with 4.0% in 2023.
• Non-oil GDP, for its part, is expected to grow by +4.2%, broadly in line with the +4.3% estimate in the Finance Act. This mo-mentum is driven by the strong performance of the electricity, agri-food, and construction sectors, which offset the decline in the oil sector and results in +3.6% growth in the secondary sector. Meanwhile, the Tertiary sector remains a steady driver of growth, posting an increase of +4.3%. Finally, Primary sector growth stands close to the average of the past three years at +3.2%, held back by the stagnation of forestry activity.

Overall, Cameroon’s economy continues to outperform the CEMAC regional average, where growth is expected to slow to +2.4% in 2025, compared with +2.9% a year earlier.

An achievement rate of around 90%

Moreover, budget planning for investment spending appears somewhat optimistic. Initially expected to increase by +28.5% to FCFA 1,668 billion, capital expenditures in 2025A are now estimated at FCFA 1,516 billion, corresponding to an achievement rate (AR) of around 90%.

The fiscal balance is expected to widen to –0.8% of GDP, compared with an initial estimate of –0.3%. This gap is explained, on the one hand, by a –30 bps decline in Revenues, linked to the contraction in oil revenues. On the other hand, Expenditures are ex-pected to exceed projections by +20 bps of GDP, mainly due to higher debt interest charges. Indeed, according to the latest official figures, Treasury debt stands at around 44% of GDP, a level well below the 50% ceiling set in the 2025 Finance Act and also below the CEMAC community threshold of 70%.

Cameroon: Stronger economie momentum in IN 2026

In 2026, economic growth is expected to continue on an upward trajectory, albeit at a relatively modest pace, reaching +4.3%, up +40 bps compared with the previous year. This acceleration would be explained by:

• The +4.4% growth of the non-oil sector, supported by the strong performance of several sub-sectors, notably agriculture, driven by the development of the Integrated Agro-Pastoral and Fisheries Import-Substitution Plan (PIISAH); manufacturing, benefiting from improved energy supply; and construction and public works (BTP), supported by the public investment program ;
• The near-stagnation of the oil sector at ¡V0.1%, following two consecutive years of sharp decline. This outlook reflects the assumption of a ¡V4.5% drop in the price of exported oil in 2026E, after ¡V12.9% in 2025. As a result, oil GDP would see its share fall to a marginal level of 2.2% of total GDP.

From a sectoral perspective, the Primary sector, and to a lesser extent the Secondary sector, are expected to lose ground in favor of the tertiary sector, which now accounts for 53% of GDP. It should be noted that the stagnation of the oil sector should not oversha-dow the strong growth expected in the construction and public works (+6.3%), electricity (+5.5%), and agri-food (+5.4%) sub-sectors, which illustrate the gradual non-oil transformation of Cameroon's economy.

A possible easing of inflationary pressures

Overall, Cameroon’s economy is expected to continue outperforming the regional average, which is estimated at +3.3% in 2026E, while aligning with the average growth of Sub-Saharan African countries, estimated at +4.4% according to the IMF.

At the same time, Cameroon’s economy is expected to record a further easing of inflationary pressures. Inflation is projected to decline to 3.0% in 2026E, after 3.2% in 2025, thereby meeting the CEMAC region’s convergence threshold. This deceleration in prices supports Consumption, which remains the main pillar of the country’s economic growth, accounting for 86.9% of GDP. Meanwhile, the contraction in oil activity is weighing on the external sector, bringing the share of Exports of Goods and Services down to 11.0% of GDP, compared with 16.9% in 2023.

GDP growth within reach

For reference, the assumptions underlying the 2026 Finance Act are based on a number of key parameters, including oil production of 20.9 million barrels and 65 million m³ of gas, an international oil price of $65.9 per barrel, a natural gas price of $11.4 per Tm, and finally an exchange rate of FCFA 570.9 per USD.

The GDP growth assumption underlying the 2026 Finance Act appears within reach. The main risks to its realization lie, in our point of view, in the regional security context, the global geopolitical environment, and, to a lesser extent, climatic conditions. These factors could primarily affect the evolution of Consumption and Investment, which remain the key pillars of economic growth in Cameroon.

Cameroon: a budgetary framework weighing on 2026 growth

For 2026E, budget aggregates are expected to evolve in a manner which is not particularly favorable to fiscal consolidation. Indeed, total Expenditures are projected to increase by FCFA 1,060 billion, representing 4.2x the amount of the increase in Reve-nues and grants.

On the one hand, domestic revenues are mainly affected by the downward trend in oil revenues. These are expected to decline by –16.2%, accounting for only 9.2% of domestic revenues in 2026E, compared with 13.6% in 2024. Meanwhile, non-oil revenues are expected to increase by +10.2%, mainly driven by the balanced growth of tax revenues (+10.7%) and non-tax proceeds (+10.8%).

On the other hand, Expenditures show a mixed evolution. The wage bill is expected to increase at a contained pace of +3.5%, representing 4.4% of GDP. Current Expenditures are projected to record a more pronounced increase of +9.5%, broadly in line with the rise in Transfers and Subsidies of +9.8%.

A focus on investment

Moreover, the 2026E Finance Act places priority on investment, with a budget of FCFA 1,803 Bn, representing an increase of +18.9%. This reflects a strong commitment to supporting the diversification of Cameroon’s economy in the face of declining oil revenues. As a result, the central government investment budget reaches 5.0% of 2026E GDP, compared with 3.6% two years earlier.

Finally, the rapid increase in debt service constitutes, in our opinion, a key point of vigilance. Following an annual increase of +20.8%, debt service (principal and interest) now accounts for 34.6% of total expenditures and nearly 8.3% of GDP. The share of domestic debt service remains predominant, representing 61.5%, compared with 38.5% for external debt service.

A deterioration of the budget balance

The divergent evolution of expenditures and revenues mechanically leads to a deterioration in the budget balance. While not reaching a worrying level at –1.7% of GDP, this level would nevertheless reflect the budget balance settling into a structural deficit, whereas traditionally the economy maintained a position very close to balance.

Still below the 50% of GDP threshold set as the debt ceiling under the 2025–2027E Medium-Term Plan, and well below the regional convergence threshold of 70%, the level of indebtedness in absolute terms is not worrying . However, as noted earlier, it entails a significant cost relative to Cameroon’s fiscal capacity. The country is pursuing a deliberate economic strategy: strengthening economic diversification and aiming to accelerate growth while gradually absorbing the associated fiscal cost.