Cameroon spent 3% of its gross domestic product subsidizing fuel and gas to curb its citizens’ rising energy costs in 2022, a share six times bigger than the previous year.
(Bloomberg) — Cameroon spent 3% of its gross domestic product subsidizing fuel and gas to curb its citizens’ rising energy costs in 2022, a share six times bigger than the previous year.
The central African nation’s petroleum product subsidies reached 775 billion CFA francs ($1.3 billion) by the end of December, President Paul Biya said in his first speech of 2023.
“It is becoming increasingly clear that Cameroon, like many other countries in Africa and elsewhere, will not be able to indefinitely avert a petroleum products price adjustment if we must preserve our fiscal balances and successfully continue implementing our development policy,” he said in his Jan. 1 speech.
A possible price hike would stoke inflation that’s estimated to have averaged 4.6% in 2022, the highest level since 2008.
Cameroon, which is under a $690 million International Monetary Fund program, will find it difficult to sustain the subsidy bill, the lender said in a June review. The rising cost had already forced the $43 billion economy, which spent just 0.5% of GDP on subsidies in 2021, to cut expenditure in other areas, the IMF said at the time.
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