Part I
A. The Cameroon Economy Under the First Republic (1960 - 1982)
From 1958 to 1982, while President Ahmadou Ahidjo was in power, Cameroon was considered as one of the most economically stable countries in Africa. The country enjoyed a period of sustained economic growth in GDP lasting nearly twenty years. The golden years of economic development was the period from 1974 to 1980 during which the country benefited from the commodities boom which saw the prices of its primary commodities (coffee, cocoa, cotton) rise to historic levels. In order to diversify the export base, cotton production was promoted in the Sahel Region of the Northern provinces, while palm and rubber plantations were established in the Littoral and South West Provinces. These investments added to the vast estates of palms, rubber, tea which were developed in the CDC some of which dated to the German occupation of Cameroon.
The proclamation of the Green Revolution during the 1970s also enabled Cameroon to awaken to the call to achieve food self-sufficiency. The success of the Green Revolution enabled Cameroon not only to feed itself but also to become a net exporter of food to other countries in the UDEAC region.
Although the economic base was agriculture, a solid foundation for industrial development was also laid which enabled the industrial sector to become a significant contributor to GDP. By 1985, SYDUSTRICAM, was reporting combined revenues of FCFA 534.8 billion and total employment of 57,715 workers, earning a total wage bill of FCFA 31.6 billion.
The country was characterized by stable and prudent economic management, a high level of investment and capital formation, sound public finance policies reflected by a balanced budget, a balance of payments surplus and dynamic and liquid banking system. Development was essentially financed by local resources through the development budget, without incurring budget deficits. The result was a low level of external indebtedness. By 1982, debt service was consuming only 12% of export earnings, Cameroon was still able to program the servicing of its external debt into the development budget and at the same time maintain the discipline of a balanced budget.
The Main Achievements of the 1st Republic
The government of the first republic succeeded in laying the foundation of a solid economy by providing the basic infrastructure for a country poised for growth. The external loans were mobilized to finance critical infrastructure for the Cameroonian economy such as:
- The construction of the Trans-Cameroon Railway from Douala to Ngoundere (903km) which provided the vital link between the Northern Provinces with Yoaunde and the port of Douala
the rail network also included extension of the line to Nkongsamba and a spur from Mbanga to Kumba
Regifercam now operates a network of 1104km of rail with 61 diesel locomotives and 1385 wagons
- The construction of the Ngaoundere / Maroua road axis in order to connect the Northern Provinces and Chad with the rail head in Ngoundere
- The creation of Cameroon Airlines in 1971 and the acquisition of a fleet of aircraft including the Boeing 747 Combi with the financing of the EXIMBANK of the United States and put into service in April 1981
- The construction of an oil refinery in Victoria with a capacity of 41,000 bb/day and the creation of SONARA in 1981.
- The creation of Cameroon Shipping Lines in 1974 and the acquisition of six cargo ships
Camship and the Shippers Council have restructured and are continuing to enable Cameroon to play a role in the field of maritime transport
- The creation of Cameroon Sugar Company (CAMSUCO) (28,000 T/y) in 1975 to produce sugar in Bandjock to satisfy part of the country’s needs
this was followed by the creation of another sugar estate under SOSUCAM (26,000 T/y)
- The creation of HEVECAM in 1975 and the development of rubber over 15,000 hectares of land in Kribi
in 1995 it produced and exported 26,145 tons of rubber
- The creation of SODECOTON in 1974 to promote the production of cotton in the Northern Provinces of Cameroon
Sodecoton now produces around 175,000 tons of cotton, 8900 tons of refined oil
- The conclusion of financing arrangements and the award of contracts for the construction of the Douala / Yaounde road axis in 1981 and the Yaounde /Bafoussam /Bamenda road axis
- The construction of a refinery with a 1.0 million tonne capacity in Cape Limbo in Victoria which was inaugurated on May 16, 1981
- The conclusion of negotiations for the establishment of a television system for Cameroon
- The expansion of the capacity of hydroelectric installations in Edea to 263 MW, the construction of additional generating units in Song-LouLou and the construction of a hydro-agricultural dam at Lagdo on the Benoue River with a 72 MW power station
- The installation of an aluminum smelting plant in Edea (ALUCAM) in 1953 which is now a major exporter of aluminum metal
- The construction of international airports in Douala and Garoua.
- The commissioning of the Cellucam paper project in Edea was an achievement only in the sense that it demonstrated the extent to which the country could attract capital with its credit rating. This project however, is the only white elephant which is identified with the government of President Ahidjo. It is unfortunate however that following an explosion which took place in the plant in March 1982, the paper plant with 126,000 T capacity which cost FCFA 90 billion was crippled.
The level of external business confidence was high and rising. The external confidence as measured by private non-guaranteed debt (PNGD) as a percentage of total external debt showed that in 1982 the external business confidence ratio was 15%. In 1981 for instance, according to the Chamber of Commerce, 281 new companies were created in Cameroon with 108 in trading, 78 in industry, 60 in financial services, 20 in construction and 15 in agro-industry. Cameroon is one of the rare African countries to have attained food self-sufficiency and having one of the highest literacy levels on the whole continent.
Cameroon also enjoyed a high level of independence and sovereignty in its economic decision-making. With its sovereignty ratio having stabilized at a multiple of 3, the Cameroon government was able to make important decisions guided only by the best interest of the country rather than yielding to pressure from abroad.
Finally, there was a close correlation between the economic development of the country and the promotion of national identity by the strengthening of national unity in spite of ethnic, regional and linguistic diversity.
The end of the reign of President Ahmadou Ahidjo left Cameroon on a sound financial footing. He resigned in the middle of the 5th five-year development plan (1981-86) under which the economy was projected to grow at the rate of 7% p.a. with the GDP projected to reach FCFA 2,000 billion ($7.1 billion) by 1986.
Cameroon became an oil producing country in 1976 when the first oil wells in Rio del Rey were officially put into production. By 1982 oil was already the largest source of revenue for the government budget. However, one of the most important mistakes which was committed by the Ahidjo regime was that he failed to introduce a system of transparent accounting for oil revenues. While accepting his concern for not budgeting all the oil revenues, in creating the Compte Hors Budget, which was not specifically covered by the finance law, he failed to bring an important component of fiscal revenues under the control of parliament. This set the stage for the abuses which occurred during the Second Republic in the management of oil revenues and eventually wrecked the economy.
Concealing Oil Revenues from the Cameroonian People! The Creation of the Compte Hors Budget was the Greatest Mistake of the 1st Republic!
Next: SDF National Economic Salvation Programme (NESPROG) - 2
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