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

In a bold move to align with the Economic Partnership Agreement (APE) signed with the European Union (EU) and the United Kingdom, Cameroon has announced a sweeping reduction in import duties on European goods. The decision, confirmed by Finance Minister Louis Paul Motazé, targets the third category of products deemed critical to national revenue due to their significant contribution to customs receipts. The phased reduction will see tariffs drop by 10% annually until full elimination by 2030.

The latest duty cuts apply to a range of industrial and commercial goods, including utility vehicles, fuels, cement, paints, and industrial packaging imported from EU member states and the UK. This follows an accelerated timeline for the first two product categories. Since August 4, 2023, goods in the second category—such as plasters, clinkers, trucks, trailers, and generators—have entered Cameroon duty-free. Similarly, products in the first category, including pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, have enjoyed full exemption since August 4, 2019.

Fiscal impact remains manageable for Cameroon

When the APE was first introduced, concerns arose about potential revenue losses for Cameroon’s treasury. However, official data shows that over the past decade, customs revenue losses have totaled approximately 103 billion FCFA—an annual average slightly above 10 billion FCFA. While significant, these losses have been absorbed within the broader economic context.

Remarkably, Cameroon’s total customs revenue surpassed the 1 trillion FCFA mark for the first time in 2023. This unexpected rise, occurring as European import tariffs decline, can largely be attributed to a shift in trade partnerships. Diversification of trade partners, particularly toward Asia, has helped offset tariff erosion from Europe by broadening the tax base.

China emerges as the unexpected winner of the APE

The irony of the APE’s structure is striking: despite preferential tariffs for European goods, China has solidified its dominance in Cameroon’s trade landscape. Since 2013, Beijing has held the top position as both Cameroon’s largest client and supplier, with its influence continuing to grow. A 2024 report by the Competitiveness Committee under the Ministry of Economy highlights this shift.

Between 2016 and 2024, China’s market share in the machinery and equipment sector surged from 23.8% to 52.5%, a gain of 28.7 percentage points. Over the same period, the EU’s share plummeted from 50.1% to 29.3% in 2023, though it rebounded slightly to 32.3% in 2024. This decline of nearly 20 points raises questions about the effectiveness of preferential tariffs for European industries in the face of China’s aggressive pricing strategies.

Benefits concentrated among a few major players

An analysis of APE beneficiaries reveals a stark imbalance in how the trade deal’s advantages are distributed. As of December 31, 2023, fewer than 5% of the 1,021 companies utilizing the APE’s preferential tariffs captured about 75% of the total tax benefits. The disparity extends to company size, with large enterprises accounting for 80% of the gains, leaving just 20% for small and medium-sized businesses. This imbalance reflects both the structure of formal imports in Cameroon and the varying abilities of businesses to navigate preferential customs procedures.

The Competitiveness Committee notes that the top 50 companies benefiting from APE’s preferential tariffs are predominantly from industrial and commercial sectors. With full tariff elimination slated for 2030, policymakers face a critical challenge: balancing Cameroon’s historical ties with Europe against the realities of an economy increasingly shaped by China’s economic momentum. This restructuring is already fueling discussions about potential revisions to the trade deal.