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Brochure More information from http://www.researchandmarkets.com/reports/1585233/ Cameroon Business Forecast Report Q2 2011 Description: Still Waters Run Deep While Cameroon may appear calm on the surface, long-simmering discontent could suddenly boil over. Aware of this and following the national uprising in Egypt, the government has acted to head off the biggest grievances before national elections later this year – nonetheless, we believe protests surrounding this election now have the potential to be larger than before. Dissatisfaction with the status quo is related to weak economic performance, with real GDP growth projected to remain just below 3.0% this year before surging over the next two years on the back of megaprojects that will do little to improve the conditions of the wider populace. Government policy is expected to at least help contain inflation, the spark of previous protests, through both direct interventions in the markets for food and fuel and continued use of the euro-pegged CFA franc. While it is important not to overstate similarities, Egypt and Cameroon share several worrying similarities: long-serving rulers up for re-election in 2011, corrupt governments, huge youth populations with weak economic prospects and almost no prospects for change through official democratic channels. We consider the chances of national protests in Cameroon elevated in the current climate, though still remote. At a minimum, protests against the national elections may be bigger this year than they otherwise would be, and government responses to protests will probably be swifter. The continued spread of protests internationally, or an opposition victory in Egypt, would further raise these risks. Cameroon’s exchange rate and monetary policy are decided at the supranational, not domestic level, and looking to the wider central African economy, we see little in the way of changes over 2011. The extreme rarity of adjustments to the peg of the CFA franc to the euro has helped keep inflation and perceptions of exchange rate risk low, and in the absence of macroeconomic tensions and the promising outlook for oil prices, we see no adjustments to the peg over the next five years. Meanwhile, with inflation likely to remain subdued, we believe the regional central bank will similarly refrain from adjusting its policy interest rate this year, especially given the relatively weak outlook for growth. The risk of a sudden shift in political stability following the retirement of President Paul Biya weighs on the business environment, which also suffers from widespread corruption, an inflexible labour market and questionable independence in the judiciary. The country’s growth strategy over the next several years hinges on new investment in natural resource extraction, and to help accomplish this, significant investment in infrastructure is planned. While we expect this to be largely successful, we are less optimistic about the prospects for taking on more institutional problems afflicting the business environment. Beyond the next five years, if tackling these weaknesses proves too difficult, we believe the temptation to reexamine the benefits of a devaluation may mount. Contents: EXECUTIVE SUMMARY Still Waters Run Deep CHAPTER 1: POLITICAL OUTLOOK SWOT Analysis BMI Political Risk Ratings Domestic Politics What Are The Risks Of An Egypt-Style Uprising? At a minimum, the anti-government uprising in Egypt is likely to encourage the Cameroonian authorities to head off sources of grievance ahead of October 2011 national elections TABLE: POLITICAL OVERVIEW Long-Term Political Outlook President’s Longevity A Key Vulnerability Over the next 10 years, the single greatest uncertainty facing Cameroon is how a transition from the leadership of President Paul Biya, who has ruled since 1982, will be managed CHAPTER 2: ECONOMIC OUTLOOK SWOT Analysis BMI Economic Risk Ratings Growth Sluggish Until 2 We have maintained our real GDP growth forecasts for slow real GDP growth of 2.9% in 2011, followed by a surge in 2 and 2013 as new oil fields begin production and investment projects commence TABLE: ECONOMIC ACTIVITY Monetary Policy Programmes To Limit Inflation On the back of government programmes to contain the prices of fuel and food, we see inflation averaging just 2.8% y-o-y in 2011, up from a revised estimate of 1.6% y-o-y over 2010 TABLE: MONETARY POLICY Regional Monetary Policy CEMAC Monetary Policy: Rates On Hold In 2 We continue to see the Bank of Central African States holding interest rates throughout 2011, as low regional inflation and sluggish growth continue Regional Exchange Rate Policy CFA Franc (Central): Steady As She Goes Over the next five years we expect the peg of the CFA franc to the euro to serve the six members of CE MAC well, and therefore see no adjustment to the peg TABLE: EXCHANGE RATE CHAPTER 3: 10-YEAR FORECAST The Cameroonian Economy To 2020 Growth Trajectory To Improve Over Next Decade Average growth in Cameroon over the next 10 years is forecast to outpace that seen over the previous decade, on the back of growing investment in infrastructure and the non-oil economy, financed by a combination of oil revenues, foreign direct investment and foreign assistance TABLE: Long-Term Macroeconomic Forecasts CHAPTER 4: BUSINESS ENVIRONMENT SWOT Analysis BMI Business Environment Risk Ratings Institutions TABLE: BMI BUSINESS AND OPERATION RISK RATINGS TABLE: BMI LEGAL FRAME WORK RATING Infrastructure TABLE: LABOUR FORCE QUALITY Market Orientation TABLE: MI DDLE EAST & AFRICA, ANNUAL FDI INFLOWS TABLE: LABOUR FORCE QUALITY Operational Risk Table: TOP EXPORT DESTINATIONS CHAPTER 5: BMI GLOBAL ASSUMPTIONS Global Outlook Growth Solidifies, But Inflation Poses A Threat table: Global Assumptions TABLE: GLOBAL & RE GIONA L REAL GDP GROWTH % CHG Y-O-Y TABLE: CONSENSUS FORECASTS Ordering: Order Online - http://www.researchandmarkets.com/reports/1585233/ Order by Fax - using the form below Order by Post - print the order form below and send to Research and Markets, Guinness Centre, Taylors Lane, Dublin 8, Ireland. 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