Cameroon to lose FCFA 1,036 billion to economic agreement
The Post (Buea) | 24 March 2008
Country to Lose FCFA 1,036 Billion to Economic Agreement
By Kini Nsom
Experts have qualified the economic partnership agreement Cameroon signed with the European Union on December 17, 2007 as a veritable jinx that would inflict a heavy decline on customs revenue.
The intermediary agreement that spans over a period of 15 years stipulates a tariff-free trade between Cameroon and the European Union, EU.According to the Director of Customs, Mrs. Libom Li Likeng, Cameroon will lose FCFA 1,036 billion of customs revenue in 15 years.
The agreement was signed in the wake of widespread protests by civil society organisations which argued that Cameroon was too weak an economy to compete with the European markets.
Although member countries of the Central African Monetary Community, CEMAC, seemed to have been determined to negotiate with the EU as a block, Cameroon chose to sign the interim agreement solo. Many observers qualified it as an act of treachery.
According to the Association for the Defence of Collective Interest, ACDIC, led by Bernard Njonga, the agreement is an unpardonable economic blunder by the Biya government.
They hold that since agriculture is the mainstay of the country’s economy, Cameroon would have taken measures to boast production before signing any such partnership agreement.
ACDIC authorities express fears that while the EU will flood the Cameroonian market with their goods, Cameroon would in turn have nothing to export since its agricultural production has continued to dwindle. He said farmers are not subsidized and still face problems like lack of farm-to-market roads that adversely affect productivity.
Cameroonian economist, Prof. Fouda, holds that such an agreement may threaten government’s financial operation. Going by him, such a situation would negatively affect the national poverty reduction strategy on basic infrastructure, health and education and stall the achievement of the Millennium Development Goals, MDGs.
There are also fears that Cameroon exporters would face a wide range of EU regulations that would keep them out of business. It is also feared that the dismantling of the country’s trade barriers as the economic partnership agreement prescribes, would likely put thousands of poultry farmers, amongst others, out of business, thereby intensifying food insecurity by increasing dependence on foreign imports in a country where 36 percent off all children are malnourished.
For one thing, Cameroon exports petroleum oils, oils, cocoa, cotton, lumber and technically specified natural rubber. But the mass production of these exports in order to stand competition in an international market like Europe is far-fetched.
As of June 2007 Cameroon was said to be importing 25 percent of petroleum products, 4.4 percent of oil drilling machinery, 14 percent of food products, 1.7 percent of medicaments and 1.5 percent of worn clothing popularly known as okrika. The EU market alone supplies 35 percent of the above mentioned imports.
Cameroon, like many African, Caribbean and Pacific, ACP, countries is expected to face a difficult economic situation by dint of the agreement. As a remedy, it has been stated that the European Commission, EC, will continue to provide Development Fund, (EDF) as well as under special assistance program in the area of sensitive products such as bananas, sugar and rice funded from the EU budget.
In June 2000, the EU signed a cooperation agreement with the ACP group of countries known as the Cotonou Agreement. The agreement provides the framework for the EU’s cooperation with 78 ACP countries until 2020. As a successor to the Lome Convention, the agreement covers most aspects of the EU’s cooperation with the ACP, including trade aid and political dialogue.
Title II of the Cotonou Agreement defines objectives and principles of the new trade arrangements between the EU and the ACP countries. According to the agreement, the parties agreed to conclude new World Trade Organisation, WTO, compatible agreement which aimed to progressively remove barriers to trade and enhance cooperation in all areas relevant to trade.
This agreement was supposed to replace the preferential non-reciprocal trade system initiated by the Lome Convention.
