Both poverty and inflation are on the rise in Cameroon. Both are the result of man-made policies.
When high inflation joins hand with poverty, it becomes unbearable. Life becomes more miserable and painful. High inflation is like adding insult to injury for the poor. Millions of poor people are now living an even extreme form of poverty, which is on the rise in Cameroon.
Cameroon is a lower-middle-income country playing a leading role in the Central African Economic and Monetary Community (CEMAC), holding 41.6 percent of the community’s GDP in 2019. The country is richly endowed with natural mineral resources, including oil, natural gas, gold, iron, and manganese. The country has shown a relatively strong macroeconomic performance in recent years, with growth reaching 3.7 percent in 2019.
Government’s expenditures increased continuously in the past decade due to the security crises. Concomitantly, non-oil revenues increased on the back of improved tax collection. Hence, the fiscal deficit reduced significantly and represented 3.3 percent of GDP in 2019, compared to 4.5 percent of GDP in 2014. Over the last decade, the pace of economic growth has not been high enough to lead to a significant poverty reduction because of the lack of redistributive policies and population growth.
The COVID-19 pandemic has compounded the cyclical and long-term risks faced by the country (exposure to external shocks, high risk of debt distress, security issues and political turmoil). Both the drop in production of goods and services, reduced exports, and disruptive global value chains translated into financing needs and daunting socio-economic challenges.
According to the World Bank, the main sources of vulnerabilities that could weigh on debt sustainability include tighter financial conditions, SOEs’ contingent liabilities and committed but non-disbursed debt resulting, inter alia, from delays in infrastructure projects. On the social side, a prolonged health crisis together with the weak safety nets have further overstretched the health system.
Moreover, ongoing civil conflicts in the South-West and the North-West notably are adding to the challenge of recovering from the pandemic.
The COVID-19 pandemic resulted in the contraction of Cameroon’s economy in 2020, and additional 400,000 people fell into extreme poverty. The situation has worsened in 2021 with many households going hungry even at Christmas.
Although the government says inflation has stayed at 2%, the World Banks posts that inflation in Cameroon stands at 2.39% in 2021 and will be the case in 2022. Although it is below the 3% standard established by Central African Economic and Monetary Community, Cameroonians are feeling the pinch.
Cost of food in Cameroon increased 4.50 percent in June of 2021 and worsened in the build up to end of year feasts. A chicken that hitherto sold at FCFA 5,000 sold at FCFA 15,000 ahead of Christmas Day.
Some traders blamed the increase in prices on the high transportation cost, scarcity, taxes and the socio-political crisis in the Southwest and Northwest Regions.
Ruth Ngwa, a trader said that her business is slow due to the increase in the price of chicken.
“The sale of chicken is not easy, and we do not have customers, since the prices of chicken have risen. The rise in price is because of chicken crisis, which we experienced in October, leading to its scarcity in the months of November and December,” she explained.
“The price of a normal chicken is FCFA 2,500 when there are in abundance, but now, it is FCFA 5,500 and the one that was previously sold at FCFA 5,000 now costs FCFA 7,000. At the poultry where we usually buy, the place is empty. Also, to have a healthy chicken is very difficult. As a result, people prefer buying pork that is less expensive than buying chicken,” Ruth Ngwa said.
Another trader, Victorine Vufeme, who sells palm oil lamented: “We now buy a gallon of palm oil at FCFA 20,000 to resell. In order to make profit, the price of one litre of palm oil, which used to cost FCFA 450, is now sold at FCFA 900. A litre of refined palm oil that previously sold at FCFA 1,200 now costs FCFA 1,500.
“This time last year, we sold more than we are selling now. They are no buyers since morning. I have not even sold up to FCFA 5,000. I do not make purchase anymore because we are selling nothing but we are still hopeful,” she said.
In a similar remark, a butcher, Kouji Adamou said; “The increase in price of meat is because we also buy at a high price, so we need to sell at a particular price too, so as to make profit, else, we will not survive. Though there are no buyers, we make efforts to be here every day because we have families who depend on the small income we make from here.”
Buyers of these foodstuffs expressed dissatisfaction over the exorbitant prices of basic commodities in the market.
A housewife, Anita Benta, said; “I came to the market to buy chicken and other stuff, but to my surprise, the prices of almost all the things I wanted to buy have drastically increased this December. If things continue like this, we of the average family will not survive this year’s feast, talk less of having what to eat in 2022.”
“Last year, I pointed fingers at the coronavirus pandemic, but I don’t know what to blame this year because we are suffering,” Benta said.
Some traders blame Price Hikes On numerous Control Posts
Ahead of end of year feasts, consumers in Kumba say there is a drastic increase in prices of some products.
The Senior Divisional officer for Meme Division, Chamberlin Ntou’ou Ndong, alongside the Divisional Delegate of Trade, Jeanette Mbokwe, toured the various markets within the Divisional headquarter, Kumba, to see the situation for themselves.
After his tour, the SDO remarked: “It is with joy that we realised that food is much available but facing small difficulty in terms of prices, where traders are complaining that, to bring food like fresh tomatoes and from Foumbot, they have like 50 control posts where they have to settle before passing with their goods.”
The traders told the SDO that the situation is not helping them. In response, the SDO promised to work with other colleagues to see what can be done. “I am going to work with my colleague in Fako to see how to facilitate this domain.
Meanwhile, the Divisional Delegate of Trade, Jeanette Mbokwe, explained that their visit was aimed at understanding the situation of the markets, their preparedness towards the festive period. “We are here to be sure that there is no scarcity of any product,” she said.
Government helpless as citizens suffer
Quizzed on actions her delegation could take against the price hikes, she said: “As you heard from the traders themselves, the prices of some products are really high and, with the reasons they gave, there is little or nothing we can do. They explain that the prices are increased as a result of the cost they incur in the course of transporting the goods from the purchase point to Kumba, a situation made worse by numerous controls. In as much as we are there for consumer protection, at the same time we have to ensure the supplier is protected. This means that we cannot impose on the suppliers to sell lower than their cost prices. However, we are there to ensure that these prices are not exaggerated.”
At the market, items like vegetable oil, rice, fresh tomatoes have witnessed sharp price increases. For some products which are out of stock, consumers believe that the retailers are creating a scarcity.
Consumers have been however advised to keep away from what they cannot afford and go for what their means can permit.
Evidently, the government seems helpless and clueless to control the rising inflation and poverty. It is also not ready to accept the simple fact that its neoliberal economic policies, IMF-imposed conditions, corruption in the execution of public contract and the war in the South-West and North-west Regions are causing this high inflation and poverty.
Rene Emmanuel Sadi, minister of communication and government spokesman has continued to blame the media for reporting the situation out of control.
The regime of President Paul Biya is clearly not ready to give up their ‘blame the others’ strategy, and face the reality.
The CPDM government now ought to realise that cursing the media for their ‘corrupt’ practices is no substitute for controlling the ongoing high inflation that is punishing people so directly. The reality is that the government has been harvesting loans here and there to construction facilities to host the African Nations Cup (AFCON) from January 9 to February 6, 2022 with the harshest and toughest conditionalities.
Now the government is implementing these conditionalities in letter and spirit. The IMF and other partners are happy but the poor are paying the ultimate price of these conditionalities and neoliberal policies. Heartless technocrats and elitist rulers have no idea how their economic policies are hurting millions of poor people and even parts of the middle class.
The government is not ready to accept that it is following the same economic policies that have brought us to the current state. Debt continues to rise; inflation is painfully high; unemployment is increasing; and the cost of living is rising.
The government is continuing with the policy of imposing indirect taxes to increase revenue – going as far as placing a tax on njangi. Indirect taxes always contribute to high inflation and increase the burden on the poor masses.
The elite and ruling classes fiercely resist direct taxes and progressive tax policies. The top 10 percent of the population owns most of the wealth and means of production (industries, land and services) so they must pay most of the taxes. A welfare state imposes higher taxes on the rich and on Big Business and spends it on the poor so as to provide them free health, education, decent housing, transport and other cheaper services and utilities.
But in the CPDM model of welfare state championed by ageing Paul Biya, the majority of 10 percent well-off population is still out of the tax net. Middle-class high wage earners are the ones who pay taxes. So the easy way to increase revenues is to continue with these retrogressive tax policies.
The taxes and surcharges on electricity, gas and petrol to get extra revenues pushed Cameroonians into the streets in February 2008. This government is following the same policy and may get the same results.