2016 budget silent on Economic Partnership Agreement

The 2016 Budget adopted last week is silent on the fallouts of the Economic Partnership Agreement, EPAs, which Cameroon signed with the European Union, EU, on January 15, 2009.

“I am surprised that the 2016 budget is silent on the huge loss of customs revenue that Cameroon will face from July 22, 2016, which is the deadline for the dismantling of trade barriers,” a senior Economist and specialist in Public Finance, Dr. Ariel Ngnitedem, told The Post.

According to the Economist, the agreement between Cameroon and the EU is not a win-win as the EU authorities claim. He said it has all the characteristics of a win-lose agreement in favour of the EU.

Dr. Ngnitedem said the Cameroonian economy is weak and will have very little to export to the EU market, while the EU, with strong economies, will flood Cameroon with its goods.

Going by him, the balance of trade will be in an all-time deficit for Cameroon because, while the EU will be sending manufactured goods to Cameroon, Cameroon will only be exporting mostly raw materials to EU markets.

Civil society activist cum varsity don, Dr Raymond Ebale, said the EU will make 70 percent gain on every item exported to Cameroon while Cameroon will only make 0.1 percent for every item exported to EU markets.

Going by the terms of the EPAs that government ratified on July 22, 2014, both Cameroon and the EU are hearkening to reciprocal dismantling of trade barriers. In tandem with the agreements, Cameroon is going to start allowing EU goods to enter Cameroon tariff-free from July 22, 2016.

This date marks the end of the two-year transitional period provided for in the agreement. One of the fallouts of the tariff-free trade with the EU, according to economic experts, is that Cameroon is going to lose tremendous sums of custom revenues.

Government signed and ratified EPAs against a backdrop of widespread protests by civil society organisations, including the citizen’s Association for the Defence of Collective Interest, popularly known by its French acronym as ACDIC.

They argued that EPAs was mere economic suicide for President Biya’s country.

For one thing, the EPAs was designed by the EU and 36 African, Caribbean and Pacific, ACP countries. It encourages countries to sign it in economic blocs or Regions. But Cameroon divorced from the CEMAC Region and went solo by signing and ratifying the agreements alone.

“By signing and ratifying the agreements, Cameroon betrayed the policy of Regional Integration of the CEMAC Sub-Region,” says the Permanent Secretary of ACDIC, Yvonne Takang.

She corroborates the claim that Cameroon is in for economic suicide because it stands against 28 industrialised countries in the EU.

Although there are priorities in the EPAs which indicate that the EU will enhance the performance capacity of the Cameroonian economy, critics have dismissed it with the wave of the hand.

Yaounde-based Economist, Babissakana, says the EU is not sincere because it cannot genuinely empower its opponents. Other critics believe that the EU blackmailed Cameroon into ratifying an agreement that does not favour her at all.

The EPAs provides that Cameroon is going to open up to 80 percent of her market tariff-free for the EU.

EPAs negotiations for Central Africa as a bloc started in 2006. Due to major differences between the two parties, the negotiations flopped in 2007 and started again in 2008. Although it is supposed to operate with eight Central African countries, it is only Cameroon, Congo and Gabon that seem interested in EPAs. Besides, even the trio has not agreed to form a synergy for negotiation.

Enter EU Official

A senior EU official in charge of Economic and Trade Affairs, Kathrin Renner, described Cameroon’s ratification of the EPAs as a positive twist for the country.

“At the moment, Cameroon enjoys free access to the EU market for all its products. The agreement foresees a gradual opening of Cameroonian markets for part of the EU products. Indeed, the liberalisation period is for a period of 15 years.

The Government decided who to keep on protecting several of its products, most of them being agricultural products, but also some industrial products such as textile and paints,” said Renner at ACDIC seminar organised in Yaounde recently.

The EU official said liberalised EU imports are mainly industrial machines, vehicles and certain chemicals. Such goods, she went on, are mostly inputs used by Cameroon’s industries. She said the tariff-free deal will not affect agricultural products.

She dismissed views that the loss of customs revenue will plunge Cameroon’s economy into difficulties.

“It is not for tariff revenue that emerging countries have weak economic growth and jobs,” Renner said while quoting a study that was carried out in the CEMAC Region.

“Preliminary results have shown that tariff revenue losses results from EPAs will not be significant because of the way the liberalisation is structured,” she averred.

She said the EU is committed to assist Cameroon and CEMAC Region’s integration in the global market.