Cameroon cuts eu import tariffs by 70% under economic partnership deal

The announcement, issued through a statement by Cameroon’s Finance Minister Louis Paul Motazé, marks a significant step in implementing the Economic Partnership Agreement (EPA) between Yaoundé, the European Union (EU), and the United Kingdom. This adjustment targets the third category of goods, deemed crucial for public revenue due to their substantial contribution to customs income. The phased reduction will see tariffs drop by 10% annually, culminating in their complete elimination by 2030.

The revised policy benefits a range of imported items, including commercial vehicles, fuels, cements, paints, and industrial packaging originating from the EU and the UK. It extends an already established timeline for the first two product groups. Since August 4, 2023, goods in the second group—such as plasters, clinkers, trucks, trailers, and generators—have entered Cameroon duty-free. Meanwhile, items in the first group, which include pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, have enjoyed the same exemption since August 4, 2019.

Tax revenue losses remain manageable for Cameroon

When initially unveiled, concerns arose that the EPA would create a substantial budgetary gap. However, the projected financial hemorrhage has not materialized. Official figures indicate cumulative customs revenue losses of approximately 103 billion FCFA over a decade, averaging just over 10 billion FCFA annually. While noteworthy, this shortfall is easily absorbed within the broader economic context.

Remarkably, Cameroon’s total customs revenue surpassed the 1,000 billion FCFA threshold for the first time in 2023. This counterintuitive growth, occurring as EU import tariffs decline, stems from a strategic shift in trade partnerships. Diversifying trade flows, particularly toward Asia, has offset the tariff erosion from European imports by broadening the tax base.

China emerges as the unexpected victor in the EPA

An ironic twist in the agreement’s impact is evident: the preferential tariffs granted to European goods did not hinder China’s commercial dominance. Since 2013, Beijing has held the top position as both Cameroon’s leading client and supplier. The 2024 Competitiveness Report by the Ministry of Economy’s Competitiveness Committee highlights this trend.

In the machinery and equipment sector alone, China’s market share surged from 23.8% in 2016 to 52.5% in 2024—a remarkable 28.7-point increase over eight years. Meanwhile, the EU’s share plummeted from 50.1% to 29.3% in 2023, though it rebounded slightly to 32.3% in 2024. This 20-point decline raises serious questions about the effectiveness of the EU’s tariff preferences in the face of China’s aggressive pricing strategy.

Benefits disproportionately concentrated among few

An analysis of EPA beneficiaries reveals another structural flaw in the agreement. As of December 31, 2023, fewer than 5% of the 1,021 companies leveraging the EPA’s preferential tariffs captured roughly 75% of the fiscal advantages. The imbalance is also evident in company size: large enterprises secured 80% of the gains, leaving only 20% for small and medium-sized businesses. This disparity reflects both Cameroon’s formal import structure and the uneven capacity of businesses to navigate preferential customs procedures.

The Competitiveness Committee notes that « an examination of the top 50 companies utilizing the EPA’s preferential tariffs shows a clear dominance of industrial and commercial sectors ». With full duty exemption slated for 2030, Cameroon’s policymakers now face a critical decision: balancing its historical ties with Europe against the realities of an economy increasingly dictated by China’s pace. Discussions on revising the EPA’s framework are already underway, driven by this evolving trade dynamic.