Cameroon to further cut fuel subsidy in 2025

Fuel pump prices across Cameroon are set to rise again next year as the government plans further subsidy cuts in line with International Monetary Fund recommendations.

The IMF had urged the Central African nation for years to cut fuel subsidies. This would be the third cut since Yaounde began taking action early last year.

The latest move would slash the subsidy by more than 90% to 15 billion CFA francs ($24 million) from 263 billion CFA francs ($424 million) according to a draft finance bill for 2025 tabled on Sunday.

The move is likely to please investors, who have long called for reforms, but will face opposition from consumers already struggling with the rising cost of living in Cameroon.

Inflationary pressure

Jean Cedric Kouam, Director of Economic Affairs at Yaounde-based Nkafu Policy Institute, said the higher fuel prices could add to inflationary pressure in the near term but might yield long term benefits.

“While the reduction in fuel subsidies may pose short-term challenges for consumers and businesses, it could also yield long-term advantages by enabling the government to use resources more effectively and promoting more sustainable energy consumption practices,” Kouam told Reuters on Monday.

Last year, the government rolled out measures to ease the impact of higher fuel prices, including increasing civil service wages, increasing the minimum wage and capping the cost of household gas.

It wasn't clear whether fresh measures would be introduced next year.

Economy expected to grow

Prime Minister Joseph Dion Ngute said in a Sunday evening address to the national assembly that Cameroon's economy was expected to grow by 4.1% next year, an increase from 3.8% las t year, driven by the agriculture, mining and forestry sectors.

He also said inflation would fall to 4% from 5%.

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