For a long period, Cameroon’s economic expansion was generated by the oil sector, which was then the most dynamic sector of the country’s economy.
At mid-point in the execution of the 2005 budget, oil exports had earned 135,800 million CFA F compared to 107,000 million CFA F at end May 2004, which represents a 27% increase over a year.
The sharp rise in crude prices on the world market is a booster to the sector, despite the gradual depletion of oil deposits.
Many businesses operate in the sector, including the production of crude petroleum oils, the main export product, as well as the sale of fuel and lubricants and production of crude oil.
A more attractive legislative framework
Cameroon implemented a number of measures aimed at making the contract and fiscal framework more attractive to oil companies, with a view to reviving exploration and encouraging the development of low-yield oil fields (with an estimated 3 million tonnes of oil reserves) as a means of compensating for dwindling production.
Thus two types of petroleum contracts can be signed: the concession contract (CC) or the production-sharing contract (PSC).
SONARA, the country’s lone oil refinery, sells 65% of its production locally.
Gas, an opportunity to be seized
It has been known for over twenty years that Cameroon possesses 160,000 million cubic metres of proven gas reserves in the Rio del Rey and Kribi basins. Unfortunately, these reserves are undeveloped for reasons of profitability and absence of markets.
The load shedding that the country has been facing since 2002 due to a persistent shortage of electric power may provide a great opportunity for the development of existing gas deposits.
Rich and promising subsoil
The mining sector in Cameroon is governed by a law to lay down the the Mining Code which was enacted in April 2001, thus repealing the 1964 law with had become inconsistent with the country’s economic realities.
Cameroon’s mining resources are still exploited using artisan methods, whereas the country’s subsoil is replete with minerals such as gold, bauxite, cobalt, iron, etc.
The Government has a medium-term plan to develop the mining sector. Measures to that end have been initiated, an example of which is the law to lay down the Mining Code, which was enacted in 2001.
This Code seeks to develop Cameroon’s crude mineral products to make earnings which compensate for the declining oil production. It seeks to incentivize investors by granting them, during the mine construction phase, exemption from taxes and duties on materials, inputs and equipment required for production purposes. Simultaneously, it seeks to safeguard the interests of the 10,000 or so artisan miners in the sector by making provision for them to be registered and to set up micro-enterprises.