Business in Cameroon | In Cameroon, inflation is rising while disposable income is stagnating. This is the conclusion of the National Institute of Statistics (INS) that studied the pace of inflation in the country between 2016 and 2021. In a note published on February 23, 2021, the public institute informs that “price levels have increased by 9.2% in five years,” while wages have stagnated. So, households’ purchasing power has been dropping, but the rate of that drop was not quantified by the INS.
This said inflation was driven by rising prices of food (+12.5%), clothing and footwear (+10.6%), housing, water, gas, electricity, and other fuels (+8.4%), restaurants, and hotels (+12.8%), and transport (+6.4%). Food prices contributed the most to that inflation with 4% contributing to the 9.2% price rise while ahead of clothing and footwear, housing, water, gas, electricity, and other fuels as well as restaurants and hotels contributed only 1% each.
Food prices rose so much over the last five years because mainly of bread and cereals (+17.4%), vegetables (+17.4%), fish and seafood (+12.7%), and meat (+7.8%), which are mainly imported.
Incidentally, the price levels of imported food products rose by 20.9% over the period but, overall, the cumulative inflation was supported by an increase in the price of local products. Indeed, over the past five years, the price of local products rose by 9% adding 6.7 percentage points to the overall inflation. Inflation of local products in 5 years amounts to 9% and contributes 6.7 percentage points to the total inflation (9.2%).
At the same time, the price of imported products rose by 10.4% but contributed just 2.5% percentage points to total inflation.
In other words, import restrictions, soaring shipping costs, and the international energy crisis are having less impact on the overall price level than the security crisis in the Northwest and Southwest regions, climate change, and disruptions caused to the local supply chain by the coronavirus pandemic.
According to the INS, those problems reduced the supply of local products, causing their price level to rise by 6.7 percentage points.