Cameroon’s Economy Grew Five Percent in 2012

January 28, 2013

Resources Allocated to Social Protection Programs Fall Well Below the Levels Needed to Have a Real Impact on Poverty Reduction in Cameroon

YAOUNDÉ, January 28, 2013 – Cameroon's economic recovery continues. After rising about 4 percent in 2011, economic activity is expected to continue to increase and grow to about 5 percent in 2012, the World Bank announced today. The engines of growth continue to be in agriculture, construction, and the services industries together with a significant difference this year in the rise of oil production. However, this economic growth is still not evidence enough to improve the lives of Cameroonians.

Entitled “Reducing Poverty, Vulnerability, and Risks – Special Issue on Social Safety Nets,” this fifth issue of the Cameroon Economic Update, published semi-annually by the World Bank office in Cameroon, assesses the macroeconomic situation and presents a special feature on social safety nets in Cameroon. For purposes of the study, the term “social safety nets” is limited to non-contributory transfer programs that benefit the poor or vulnerable, such as cash transfer, school feeding, public works, or in-kind assistance programs.

Poverty in Cameroon has not declined, and instead has increased in the poorest areas.  Food security is also a problem in these areas. Although Cameroon has many programs targeted around social protection they are not properly designed to address chronic or temporary poverty.

In terms of findings, “our analyses revealed an important point—currently, the resources allocated to these social protection programs in Cameroon fall well below the levels needed to have a real impact, and the bulk of these resources is channeled toward emergency interventions,” explained Raju Jan Singh, World Bank Lead Economist for Central Africa and Coordinator of the Economic Updates. According to him, “the most recent data show that Cameroon allocates 0.2 percent of its GDP to social safety nets—one of the lowest percentages in Africa—while the average low-income and middle-income country allocate percentages that are seven and ten times higher, respectively.

A growing body of data collected in African countries shows that social safety nets directly reduce chronic poverty and vulnerability, since they allow poor households to meet their basic consumption needs, safeguard their property, and obtain better outcomes in the areas of health, nutrition, and education.  The available data show that social safety nets, when well designed, offer protection to the population and supplement economic stabilization policies.  Once established, they also serve as a key factor in enabling governments to withstand shocks.  During periods of prosperity, they can provide effective protection and opportunities to the poor.  During periods of crisis, they can be extended to crisis-affected individuals.

In fact, social safety nets boost the productive assets of households and their earnings potential by strengthening their skills and allowing them to engage in activities that entail higher risks and rewards.  They contribute to the development of local economies by stimulating local markets through cash transfers and creating local infrastructure.  According to the study, there is little evidence to indicate that cash transfers serve as a disincentive to work.  On the contrary, the beneficiaries of these transfers tend to use the money received to create employment opportunities and to find work.

"These programs have helped finance a bus ticket or clean shirt to get a job. These programs have helped finance the training of new skills. These programs have helped to invest in small livestock. Throughout Africa, these programs have demonstrated their ability to allow beneficiaries to become productive members of their community” said Raju Jan Singh.

In terms of alternatives, Gregory Binkert, World Bank Country Director for Cameroon, stressed that “Cameroon needs a coherent social protection strategy to effectively combat chronic poverty and food insecurity. This strategy should take risks and vulnerabilities into account and should design mechanisms and programs accordingly. It should identify the priority groups that are likely to benefit from social protection programs. Appropriate selection techniques should also be developed to ensure participation by the needy”, Binkert stressed.

Economic Updates are designed to share information and encourage discussion among persons seeking to improve Cameroon’s economic management and to unleash the country’s vast economic potential.  They therefore provide another source of information on Cameroon’s economy and an additional platform for encouraging interaction, learning, and change. The World Bank analyzes economic trends and constraints in Cameroon in this periodical publication.  

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