Economic Diversification in Cameroon

Abstract Despite its rich endowments of natural resources, the Cameroonian economy remains undiversified and vulnerable to exogenous shocks as an exporter of unprocessed primary products. With the ratification of the African Continental Free Trade Area (AfCFTA), the Cameroonian government intends to follow an export-led industrialization strategy. The country ambitions, through its PDI (industrial masterplan), to become the “factory of the new industrial Africa”, starting with the “ECCAS + Nigeria” zone. Examining this industrial ambition through the TRADE-DSM approach, we find that Cameroon has the largest export potential for Food related products and products not prioritized in the PDI, while Cotton –Textile – Manufacturing and Hydrocarbons and Petrochemicals shows the least potential. Besides, within the “ECCAS + Nigeria” zone, the Nigerian market has the largest potential for Cameroonian products, while DRC has the lowest, despite its large population of over 80 million people. In other words, due to lack of infrastructures and logistics, small countries such as Congo, Gabon, Chad, Equatorial Guinea, Sao Tome and Principe appear to be better market for Cameroon than DRC. This suggests that due to poor infrastructures, some geographically close markets, such as DRC, are, in real terms, distant from a commercial point of view.