Cameroon cuts 70% eu import tariffs under ape agreement

The decision, outlined in a statement by Cameroonian Finance Minister Louis Paul Motazé, follows the economic partnership agreement (APE) framework between Yaoundé, the European Union (EU), and the United Kingdom. This move targets the third category of goods deemed vital for public revenue due to their customs duty contributions. The phased reduction will see a 10% annual decrease in tariffs, culminating in the complete elimination of duties by 2030.

Key sectors affected include commercial vehicles, fuels, cement, paints, and industrial packaging originating from the EU and the UK. This adjustment follows an already accelerated schedule for the first two categories. Since August 4, 2023, goods in the second category—ranging from plaster and clinker to trucks, trailers, and generators—enter Cameroon duty-free. Meanwhile, the first category, covering pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, has enjoyed similar exemptions since August 4, 2019.

Cameroon’s fiscal impact remains manageable despite tariff cuts

Initial concerns about the APE agreement triggering a severe budget shortfall have proven unfounded. Official data shows cumulative customs revenue losses of approximately 103 billion FCFA over a decade, averaging just over 10 billion FCFA annually. While substantial, this figure remains manageable within the broader economic context.

Remarkably, Cameroon’s total customs revenue surpassed 1,000 billion FCFA for the first time in 2023. This growth, seemingly contradictory amid declining EU import duties, stems from a shift in trade flows. Diversification toward Asian markets, particularly Asia, has offset the tariff erosion from European imports by broadening the tax base.

China emerges as unexpected winner of APE preferences

The irony lies in how the tariff advantages granted to European goods failed to curb China’s commercial dominance. Since 2013, China has held the top position as both Cameroon’s largest client and supplier, with its influence continuing to grow. The 2024 Competitiveness Report from Cameroon’s Ministry of Economy highlights this trend in detail.

In the machinery and equipment segment, China’s market share surged from 23.8% in 2016 to 52.5% in 2024, a gain of 28.7 percentage points over eight years. Meanwhile, the EU’s share plummeted from 50.1% to 29.3% in 2023, before slightly recovering to 32.3% in 2024—a decline of nearly 20 points. This sharp contrast questions the effectiveness of preferential EU tariffs against China’s aggressive pricing strategies.

APE benefits concentrated among a few major players

An analysis of APE preferential tariff recipients reveals stark structural imbalances. By December 31, 2023, fewer than 5% of the 1,021 companies utilizing the APE tariff captured roughly 75% of the fiscal benefits. The disparity extends to company size, with large enterprises securing 80% of the gains, leaving just 20% for small and medium-sized businesses. This imbalance reflects both Cameroon’s formal import structure and the varying capacities of businesses to navigate preferential customs procedures.

The Competitiveness Committee notes that an analysis of the top 50 companies using APE preferential tariffs shows a strong concentration in industrial and commercial sectors. With full tariff elimination slated for 2030, policymakers now face a critical choice: balancing historical ties with Europe against China’s dominant economic influence. Discussions on revising the APE framework are already underway.