cameroon economic update no.6, july2013

8/22/2019 Cameroon Economic Update No.6, July2013

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Cameroon eConomiC Update

Twa Geate Equt

A Special Focus on Health

July 2013


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2013 International Bank or Reconstruction and Development/The World Bank

1818 H Street NW, Washington DC 20433

Telephone: 202-473-1000; Internet: www.worldbank.org

Some rights reserved

This work is a product o the sta o The World Bank with external contributions. Note that The World Bank

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not warrant that the use o the content contained in the work will not inringe on the rights o third parties.

The risk o claims resulting rom such inringement rests solely with you.

The ndings, interpretations, and conclusions expressed in this work do not necessarily relect the views o

The World Bank, its Board o Executive Directors, or the Governments they represent. The World Bank does not

guarantee the accuracy o the data included in this work. The boundaries, colors, denominations, and other

inormation shown on any map in this work do not imply any judgment on the part o The World Bank concerning

the legal status o any territory or the endorsement or acceptance o such boundaries.

Nothing herein shall constitute or be considered to be a limitation upon or waiver o the privileges and immunities

o The World Bank, all o which are specically reserved.

Photo credits:

Raju Singh/World Bank - Cover: Middle photo

Edmond Bagde Dingamhoudou/World Bank - Cover: Let & Right photos; pages vii, 1 & 25.


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table of Contents

AbbrEiATions And Acronyms .......................................................................................... v

AcKnoWLEdGEmEnTs ........................................................................................................... v

inTrodUcTion .......................................................................................................................... 1

rEcEnT Economic dEELopmEnTs ....................................................................................3

Growth ........................................................................................................................................................3

Inflation .......................................................................................................................................................4

Fiscal Performance ....................................................................................................................................5

Outlook for 2013.........................................................................................................................................6

Options for Going Forward ........................................................................................................................ 7

HEALTH in cAmEroon........................................................................................................... 15Introduction ................................................................................................................................................ 15

Cameroons Health Prole ........................................................................................................................ 15

Resource Allocation ...................................................................................................................................19

Options for Going Forward ...................................................................................................................... 25

rEFErEncEs ........................................................................................................................... 29


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abbreviations and aCronyms

BEAC Banque des tats dArique Centrale (Central Bank o Central Arican States)

CAR Central Arican Republic

CEMAC Communaut conomique et Montaire de lArique Centrale

(Economic and Monetary Community o Central Arica)CFAF CFA Franc

CPI Consumer Price Index

CU Customs Union

DHS Demographic Health Survey

DRC Democratic Republic o Congo

ECCAS Economic Community o Central Arican States

ECOWAS Economic Community o West Arican States

GDP Gross Domestic ProductHMIS Health Management Inormation System

IMF International Monetary Fund

LPG Liqueed Petroleum Gas

MICS Multiple Indicator Cluster Survey

MOH Ministry o Health

OPSF Oil Price Stabilization Fund

RBF Results-Based Financing

SAM Social Accounting Matrix

SNH Socit Nationale des Hydrocarbures (national oil company)

SONARA Socit Nationale de Rafnage (national renery)

US$ United States Dollar

VAT Value Added Tax

WEO World Economic Outlook

WHO World Health Organization

y-o-y Year-on-year


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aCKnoWledGements

The Cameroon Economic Updates are produced by

a Team led by Raju Jan Singh. Abel Bove and Paul

Jacob Robyn prepared the chapter on health under

the supervision o Gaston Sorgho. For this purpose,

the Team has built upon the recently-completed

Country Health Status Report or Cameroon. Franck

Adoho, Thomas Dickenson, Carlo del Ninno, and

Christian Zamo carried out the work on uel subsidies.

OtherTeam members include Simon Dietrich, Sylvie

Ndze, and Manuella Lea Palmioli.

Comments received rom Ulrich Bartsch, Jrome

Bezzina, Dominic Haazen, Santiago Herrera,

Faustin-Ange Koyasse, Katherine Manchester, Ha Thi

Hong Nguyen, Hannah Nielsen, Dominique Njinkeu,

Cia Sjetnan, and Erik von Uexkull are grateully

acknowledged. Greg Binkert (Country Director or

Cameroon), Mark Thomas (Sector Manager), and

Olivier Godron (Country Program Coordinator)

provided guidance and advice, and have been an

invaluable source o encouragement.

The Team has also greatly beneted rom consultations

with Cameroons key policy makers and analysts, who

provided important insights, in particular the ollowing

institutions: the BEAC, the Technical Monitoring

Committee (CTS), the Ministry o Economy and

Planning, the Ministry o Finance, and the National

Institute o Statistics. The Team is also grateul to their

colleagues at the International Monetary Fund.


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Cameroon eConomiC Update 1

introdUCtion

With these Cameroon Economic Updates, the World

Bank is pursuing a program o short and requent

reports analyzing the trends and constraints in

Cameroons economic development. Each issue,

produced bi-annually, provides an update o recent

economic developments, as well as a special ocus

on a topical issue.

The Cameroon Economic Updates aim to share

knowledge and stimulate debate among those

interested in improving the economic management

o Cameroon and unleashing its enormous potential.

The notes thereby oer another voice on economic

issues in Cameroon, and an additional platorm

or engagement, learning and exchange. This sixth

issue o the Cameroon Economic Updates is entitled

Towards Greater Equity A Special Focus on Health.

There has been little improvement in Cameroons

health indicators over the past two decades. The

under-ve child mortality rate has only been reduced

slightly, while lie expectancy has, in act, declined.

The burden o health care nancing is largely born by

households, and risk-pooling mechanisms are quasi-

inexistent. Furthermore, the limited public resources

allocated to health do not seem to be deployed

where they are most needed. As a result, substantial

disparities exist in health outcomes between rural and

urban areas, as well as across socio-economic groups.

The introduction o program budgeting in 2013

should improve the efciency o public spending. Line

ministries will have now more lexibility in preparing

and executing their budgets, but will also be held

accountable or results. In addition, an eective

data collection and management system would help

decision-makers monitor health outcomes more

regularly and ensure that budgetary allocations are

based on needs and perormance. Cameroon could

also begin taking steps towards an extension o

prepayment and risk-pooling mechanisms, such as

mutual health organization and mandatory ormal

sector insurance. By reducing individual costs, such

policies would increase access to health services or

the poor and protect them rom spending shocks due

to health emergencies.

A results-based approach in health, which provides

unding based on results and rewards perormance

through additional budgetary allocations and

bonuses, is currently being piloted in Cameroon.

The preliminary results o this approach are

encouraging. An extension o this initiative may be an

option to improve health services and outcomes, and

ensure greater coverage o health services.


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reCent eConomiC developments

Growth

In spite o slow economic growth worldwide, recent

estimates conirm that Cameroons economy

continued to gain momentum in 2012 (Figure 1).

Growth is estimated to have reached 4.4 percent

in 2012 (compared with 4.2 percent in 2011) on the

back o continued strong perormance both in oil and

non-oil activities. Credit to the economy has, however,

been subdued, rising by 2.6 percent.

As in 2011, the tertiary sector was the main driver

o growth, expanding by more than 5 percent, with

transports, communications and nancial services

being particularly dynamic. In the primary sector,

economic growth was mainly driven by industrial

and export-oriented agriculture, especially by the

production o coee, cotton and rubber (Figure 2).

Cotton production, or instance, is estimated to have

expanded by more than a third ollowing the return

o armers to the sector coupled by an expansion o

production areas.

Problems related to electricity production and

delays in the oil sector have dampened, however,

economic perormance and pushed growth to

the lower end o our projection range. Activities in

electricity, gas, and water slowed down in 2012,

expanding by a mere 0.4 percent (compared with

3.6 percent in 2011) because o low rainall and

delays in the operations o the new gas-ired power

plant in Kribi. Worsening electricity shortalls have,in turn, hampered the aluminum sector: estimated

exports were down by a third in 2012.

In the oil sector, as expected, the downward trend

in production observed over the past years was

reversed in 2012 and oil production expanded to

22.4 million barrels, compared to 21.6 million barrels

the year beore (Figure 3). This reversal also allowed

an expansion in oil exports, narrowing the countrys

external trade deicit rom 2.3 percent o GDP in

2011 to 1.6 percent o GDP in 2012. The pick-up in

oil production was, however, lower than projected

fiGUre 1: sc Cu

Gdp Gwh, 200712(n rcnt)

2007

Primary Sector Secondary Sector (excl . oi l)

2008 2009 2010 2011 2012

6

4

2

0

2

GDP Growth

Oil

Tertiary Sector

Sources: Cameroonian authorities and Bank Staf calculations.

fiGUre 2: ex pc, 2012(y-o-y rcnt chng n volum )

40

30

20

10

0

10

20

30

40

Aluminum Cocoa Logsand woodproducts

Bananas Coffee Cotton



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Cameroon eConomiC Update4

(at 3.5 percent instead o 5.1 percent) because o

operating delays in new elds.

Economic growth remains nevertheless disappointing

in Cameroon. Poor inrastructure, an unavorable

business environment, and weak governance

continue to hamper economic activity and make

it diicult to reach the growth rates needed to

reduce poverty in a sustainable manner. The rates

o economic growth observed over the recent

past have not been ast enough to deliver tangible

improvements in the living conditions or the average

Cameroonian. Overall, poverty rates in Cameroon

have virtually stagnated between 2001 and 2007,

and disparities between regions have widened, as

pointed out in previous issues o our Cameroon

Economic Update. Meanwhile, many other Arican

countries have managed to reduce their poverty

rates, sometimes quite signicantly (Figure 4).

Ination

The pace o inlation slowed down in 2012, remaining

below the 3 percent regional convergence criterion

(Figure 5). The overall price level increased by

2.5 percent in December (y-o-y) compared to

2.7 percent over the same period the year beore.

fiGUre 4: ruc p, sc

Cu, e 2000-l 2000,(n rcnt o oulton)

Cameroon

Tanzania

Burkina

Faso

Benin

Swaziland

Zambia

Mali

Botswana

Rwanda

16

14

12

10

8

6

4

2

0


fiGUre 5: sc pc: 200612(y-o-y chng n rcnt)

Total (Headline) CPIFood Price Index

4

2

0

2

4

6

8

10

12

14

Ap

r-

06

Au

g-

06

De

c-

06

Ap

r-

07

Au

g-

07

De

c-

07

Ap

r-

08

Au

g-

08

De

c-

08

Ap

r-

09

Au

g-

09

De

c-

09

Ap

r-

10

Au

g-

10

De

c-

10

Ap

r-

11

Au

g-

11

De

c-

11

Ap

r-

12

Au

g-

12

De

c-

12


fiGUre 3: o puc 20022012(n mo rrl)

Source: SNH.

4

9

24

19

14

29

39

44

34

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


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reCent eConomiC developments 5

Inlation was mainly driven by pressures on ood

prices, peaking at 4.5 percent (y-o-y) in May, but

subsiding ollowing improved ood distribution

and strong harvests. The stability o retail prices

or petroleum products has also contributed to

containing inlationary pressures.

The rise in prices is, however, unevenly spread across

the countrys territory (Figure 6). In 2012, inlation

was lowest in Yaound and Douala, the two main

cities, with rates at 1.0 and 2.1 percent on average,

respectively. Price pressures were the highest in

Maroua (Far North) at 5.5 percent. These price

pressures were partly the result o the widespread

loods in the region in August and September which

caused substantial material destruction, including

homes, agricultural land (rice ields primarily),

and killed an important number o livestock. Thedierence in inlation rates may also indicate poor

inrastructure, especially in the North, making it

expensive to transport goods.

Fiscal Performance

On the iscal side, the latest estimations or 2012

are consistent with the projections presented in

the January 2013 issue o the Cameroon Economic

Update (see Table 1). On a cash basis, the overall

2012 deicit (including grants and beore payment

obligations) is estimated to be lower than budgeted,

primarily as a result o higher oil revenues caused

by stronger-than-expected international oil prices.

Estimated total spending was in line with the

budget, with slight slippages in current spending

compensated by lower capital outlays in the last

quarter o the year. As a result, the non-oil primary

deicit is estimated to have shrunk by almost two

percentage points o non-oil GDP, going rom

8.6 percent o non-oil GDP in 2011 to 6.7 percent o

non-oil GDP in 2012.

fiGUre 6: ag i mj C(n rcnt)

0

1

2

3

4

5

6

Yaound

Douala

Bua

National

Ngaoundr

Garoua

Bertoua

Ebolowa

Bamenda

Bafoussam

Maroua


table 1: fc pc, 201112(n rcnt o Gdp)

2011Est. 2012Budget 2012Jan Proj. 2012Est.

revenue and Gant 18.8 17.8 18.9 18.9

Oil Revenue 5.3 4.4 5.1 5.4

Non-oil Revenue 13.0 12.9 13.2 13.1

Grants 0.5 0.5 0.5 0.4

Ttal spending 21.8 20.0 19.7 20.0

Current Spending 15.4 13.8 13.5 14.1

Capital Spending 6.4 6.2 6.2 5.9

oveall balance 3.0 2.2 0.8 1.1

Payment Obligations 0.5 0.2 0.2 0.9

oveall balance n a cah ai 3.5 2.4 1.0 2.0



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These narrower scal decits on a cash basis relect,

however, a continued accumulation o new payment

obligations (particularly related to uel subsidies).

These payment obligations the stock o which is

estimated to have reached about 5 percent o GDP

at end 2012 will continue to put pressure on the

Governments cash position. SONARA, the national

oil renery, as well as uel importers, aces revenue

shortalls stemming rom the Governments policy

o reezing retail prices or petroleum products.

As mentioned in previous issues o our Economic

Update, the budgeted amount or compensating

or these costs alls short o the likely actual gures:

in 2012 an estimated CFAF 450 billion (3.5 percent

o GDP) was needed instead o the CFAF 170 billion

that was budgeted. Despite the cancellation o

substantial levels o unpaid taxes, an accumulation

o new payment obligations to SONARA reaching

0.3 percent o GDP could not be prevented in 2012.

Outlook for 2013

With the construction o large inrastructure projectsand continued eorts to improve agricultural

productivity, the economic momentum observed

in 2012 is expected to carry over into 2013. The

production at the Kribi gas station (216 MW) is

expected to reduce power bottlenecks. In addition,

the arrival o a new operator in the telecommunication

sector is expected to oster investment and activity in

this sector. Furthermore, the oil sector is projected to

continue its recovery, with production estimated to

increase by a urther 15 percent in 2013. This wouldpush overall economic growth to about 5 percent

in 2013.

Uncertainty, however, will likely continue to surround

developments in advanced economies, making

any economic projections particularly challenging.

According to the most recent release rom the

European Commission, condence remains weak in

the Eurozone and will continue to weigh on investment

and big-ticket consumption decisions (Figure 7). The

regular quarterly surveys o proessional orecasters,

carried out by the European Central Bank, capture

this growing gloom. The average 2013 growth orecast

or the Eurozone has declined over the past quarters,indicating now the expectations o a continued

economic contraction (Figure 8).

More worrisome, the latest vintages o the IMFs World

Economic Outlook indicate continuous downward

revisions or projected imports or Cameroons

main export markets, with demand in many markets

expected to decline in 2013 (Figure 9). Import

volumes are now expected to decrease in Spain and

Italy the irst and ith largest export markets or

Cameroon by about 5 percent and 3.5 percent,

respectively. Furthermore, the pick-up in the economy

fiGUre 8: eu-Z 2013 Gdp Gwh m

p pjc(n rcnt)

1

0.5

0

0.5

1

1.5

2

2.5

2010 2011 2012 2013

Fourth Quarter 2012

First Quarter 2013

Second Quarter 2013

Sources: Survey o Proessional Forecasters, European Central Bank.

fiGUre 7: eu-z ecc s

ic, 201013(inx 100 = 2000)

80

85

90

95

110

105

100

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

Dec-12

Feb-13

Apr-13

Source: European Commission.


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expected in the Netherlands and France six months

ago has given way to a prospect even gloomier than

a year ago. Although remaining in posit ive territory,

even projections or demand in China have been

subject to downward revisions.

Concerning scal perormance, on the basis o the

rst quarter, the projections or 2013 would indicatea wider overall iscal deicit in Cameroon than in

2012. Budgeted revenues are based on ambitious

expectations or the countrys economic growth

and or international prices or crude, and thereby

are subject to downside risks. Furthermore, the

cost o uel subsidies remains under budgeted,

which undermines transparency, and will weigh

again on the cash position and execution o the

budget. A continued reeze o retail petroleum prices

would require an estimated CFAF 430 billion (about

3 percent o GDP), but only CFAF 220 billion have

been budgeted. Upcoming local elections could add

urther pressure on spending, as could the resolution

o the situation o some nancially troubled banks and

nancial losses expected rom certain state-owned

enterprises.

Options for going forward

Against this backdrop, eorts to increase the

Cameroonian economys resilience to shocks should

be strengthened, possibly through increased trade

diversiication, prudent debt management, and

increased eiciency in public spending. The latter

would include an examination o the various possible

options to reduce the budgetary burden caused by

subsidies, especially those or petroleum products.

Diversiying trade partners

W i t h h i g h - i n c o m e c o u n t r i e s c o n t i n u i n g t o

restructure, rebalance, and restore their iscal

policies to a sustainable path, export prospects to

table 2: fc pc, 2013(n Cfaf llon)

2013Budget

2013Q1

2013Est.

revenue and Gant 2649 586 2582

Oil Revenue 705 100 711

Non-oil Revenue 1878 486 1815

Grants 66 0 56

Ttal spending 2971 468 3078

Current Spending 2014 366 2207

Capital Spending 957 102 871

oveall balance 322 118 496

Arrears 26 44 44

oveall balance n a cah ai 348 74 540


fiGUre 9: 2013 i vu pjc,

m tg p(vrton n rcnt)

6 4 2 0 2 4 6 8 10 12

Italy

France

China

Netherlands

Spain

WEO Apr-2012 WEO Sep-2012 WEO Apr-2013

Source: International Monetary Fund.


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Cameroons traditional markets will remain limited.

In this environment, Cameroon could think about

diversiying its export markets even urther away rom

its traditional partners. A more diversiied product

base, as well as more diversiied markets, would

increase the resilience o the economy and reduce

its vulnerability to external shocks.

More than hal o developing country trade is now

with other developing countries (up rom 37 percent

in 2001). Even excluding Chinas exports to other

developing countries and its imports rom them, trade

between the remaining developing countries has also

outpaced trade with high-income countries by a wide

margin over the last decade. Interestingly, the rapid

expansion o intra-developing country trade relects

more than just trade in commodities, with the value

o developing-country exports o manuactures rising

at about the same rate as the value o commodities

as a whole.

As already pointed out in last years July issue o

ou r Cameroon Economic Update, Cameroon is

ideally positioned to take advantage o the economicopportunities oered by greater trade. Due to its

strategic location neighboring Nigeria, the Democratic

Republic o Congo (DRC), and Gabon, and potential

crossing point to the landlocked countries o Central

Arica (Chad and the CAR), Cameroon is a natural

hub or the region with the port o Douala as the main

entrance.

In addition, the country is diverse with a geography

that ranges rom Sahelian semi-desert in the norththrough grassland to equatorial orest in the south,

avoring varied economic and agricultural activities.

Furthermore, Cameroon is endowed with signicant

natural resources, including oil, high value timber

species, and agricultural products (coee, cotton,

cocoa). Untapped resources include natural gas,

bauxite, diamonds, gold, iron, and cobalt.

Seizing trade opportunities in the regional context

could provide a good learning ground or becoming

competitive on the world scene. The region seems to

oer promising markets or Cameroonian products,

especially agricultural ones, and may be easier to

enter, as their standards would be closer to those o

Cameroon. In this regard, the CEMAC Customs Union

(CU) should become a reality through the adoption

o a harmonized tari nomenclature, standards,

common customs regulations, and a regional

payment system. Beyond CEMAC, there would be a

need to acilitate trade between CEMAC countries and

the DRC, as well as the rest o the ECCAS.1 Cameroon

could also capitalize on the trading potential with

the vast consumer market in Nigeria and, through

Nigeria, access the entire ECOWAS regional market.2

Traders in Cameroon are still aced, however, with

burdensome procedures or both exports and

imports. It takes or instance 12 documents to import

a commodity and 11 documents to export one in

Cameroon as compared to an average o about 6 to

8 in a sample o emerging economies. Port efciency

needs to be improved. Dwell time at Douala the

amount o time a shipment waits at the port was

18.6 days in 2010, compared to an average dwell

time o our days in Durban (South Arica), 11 days

in Mombassa (Kenya) and 14 days in Dar es Salaam

(Tanzania). Movements o reight inland should also

be made easier and cheaper. This would require, in

addition to better roads, a more competitive transport

sector and ewer roadblocks.

Prudent debt management

The most recent joint IMF-World Bank low-income

country debt sustainability analysis indicates thatCameroons risk o debt distress remains low, opening

the possibility or some limited non-concessional

1 CEMAC reers to the Economic and Monetary Community o

Central Arica. Member countries include Cameroon, Chad, the

Central Arican Republic, Equatorial Guinea, Gabon, and the

Republic o Congo. ECCAS (the Economic Community o Central

Arican States) is a wider grouping o Central Arican States and

includes, in addition to the CEMAC countries, Angola, Burundi,

the Democratic Republic o Congo, Rwanda, and Sao Tome and

Principe.

2 ECOWAS (the Economic Community o West Arican States)includes Benin, Burkina Faso, Cape Verde, Cte dIvoire, Gambia,

Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria,

Senegal, Sierra Leone and Togo.


18/40


borrowing. In this context, the authorities are actively

using the room provided by the countrys low level

o public debt to tap non-traditional creditors and

the nascent domestic capital market by issuing a

Government bond and Treasury bills (Figure 10).

These provide alternative sources o inancing or

the budget, complementing any possible shortall in

scal savings.

Tapping the emerging domestic capital market could,

however, also be a source o vulnerability. In this

regard, eorts to create a liquid secondary market

or Government bonds would help sustain investors

interest in uture bond issues. Improvements in scal

reporting would also oster investors conidence,

since it will make the Governments iscal position

more transparent. Furthermore, stronger project

selection and preparation would contribute to

ensuring that the proceeds o new borrowing wouldbe put at the most productive use.

As the Government is turning to non-traditional

creditors and non-concessional external borrowing,

its debt management capacity would also need to

be strengthened, building on recent achievements.

The ongoing crisis in advanced economies oers in

this regard both opportunities and challenges. Banks

in advanced economies seem to be increasingly

interested in Cameroons economy, attracted by itseconomic growth and low debt levels. At the same

time, the nancial conditions attached to these loans

may not always be attractive or the country or be

easily analyzed.

The National Committee or Debt Management hasbecome ully operational and its Technical Committee

is meeting regularly to discuss technical issues on

debt management. The authorities are strengthening

their analytical capacity to better analyze oreign

lending proposals and are making progress in the

preparation o a Medium-Term Debt Management

Strategy. Protection against operational risks has

also improved with a more rigorous and secure debt

recording system, ensuring sae backups o the

databases. However, the legal ramework governingdebt management could be claried and institutional

responsibilities centralized.

More efective public spending

Cameroon could also try to increase the value o

the public money it spends. In many areas, public

spending does not seem to be going where it

could have the highest impact. Per student public

investment in primary education does not seem to be

driven by the needs o classrooms, or instance (i.e.

the number o students by classrooms). According

to the data rom the project logbook (Jo ur na l

des projets), the departments where the number

o pupils per classroom was the highest in 2011

fiGUre 10: puc d, 200412(n rcnt o Gdp)

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009 2010 2011 2012


fiGUre 11: puc i p

euc (2012) . nu su(2011)

0

0 80 120 140604020

Number of students per classroom

100 160

6

4

2

8

12

14

10



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received the least investment per pupil the ollowing

year (Figure 11).3 As we will see in the next chapter, a

similar observation can be made in the health sector.

Reducing the fiscal burdeno uel subsidies

The composition o public spending could also be

examined to enhance its eiciency. In this regard,

the increasingly signiicant burden represented by

subsidies, particularly uel subsidies, is a source o

concern. The costs in terms o GDP related to the

3The project logbook covers public investment by project. Only3050 percent o the total investment o budget (deconcentrated

and decentralized spending, as well as some centralized

expenditure) can be mapped geographically.

fiGUre 13: C fu su sc

Cu, 2012(n rcnt o Gdp)

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Cameroon Congo Chad EquatorialGuinea

Gabon Averageoil-exporters

Sources : CEMAC member countries and IMF Staf estimations.

fiGUre 15: du fu su

(xc. k) ic Gu

lc(n rcnt)

Urban Rural

0

20

40

60

50

30

10

2Thepoorest

3 4 5 6 7 8 9 Therichest


fiGUre 14: du fu su

lc(n rcnt)

Urban Rural

0

20

60

40

100

80

Fuel (minus kerosene) Kerosene


fiGUre 12: C fu su, 20082012(n rcnt o Gdp)

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

.

2008 2009 2010 2011 2012

Sources: Cameroonian authorities, IMF Staf estimations.

decision to reeze retail uel prices have steadily

increased and are the highest in the region (Figures 12

and 13), putting pressure on other budgetary items

that may be more conducive to growth or shared

prosperity.

Subsidies on petroleum products (excluding

kerosene) benet mainly the richest segment o the

urban population: the richest 10 percent (Figures 14

and 15). By contrast, subsidies on kerosene, used

mostly or lighting, avor more the rural areas and

are less biased, although the richest still benet the

most rom this policy (Figure 16). Even in terms o

peoples income (estimated by their consumption),

uel subsidies do not avor the poorest segments


20/40


o Cameroons population, representing only about

2 percent o their income (Figure 17).

Transport, public administration and orestry are the

most important consumers o petroleum products

and thus the largest beneiciaries in absolute

terms o the reeze in uel prices (Figure 18). The

transport sector accounts or 30 percent o total

intermediary uel consumption (i.e. uel not directly

used by consumers or exported), while the public

administration and orestry each account or about

15 percent. Agriculture, although representing a

large share o economic activity and employment,

is only a marginal consumer o uel even when

the transport o agriculture products is taken into

account (1.3 percent o total intermediary uel

consumption).

The need or these subsidies, as well as the various

possible options to reduce the budgetary burden they

represent, should be openly and candidly discussed.

As highlighted by other countries experience (Box 1),

a comprehensive and careully planned approach

is essential. The context and constraints to reorm

should be appropriately analyzed and understood

beore making any decisions on the sequencing,

timing, and extent o price changes. Consultations

with stakeholders and the population at large should

also be undertaken to determine an acceptable and

sufcient package o compensatory measures and

avoid surprises.

In this regard, interviews and discussions with ocal

groups undertaken in Cameroon on the subject o uelsubsidies have revealed a very low level o knowledge

on the issue. This would suggest that a signiicant

eort is still required to communicate both the cost

and benets o the current subsidy policies, and the

importance o reorm, notably in terms o scal space

available or public investments. A phasing out o uel

subsidies would create the scal space or urgently

needed investments in other sectors. Reallocating the

CFAF 430 billion (3 percent o GDP and 17 percent o

total Government revenue) projected to be spent onuel subsidies in 2013 to sectors such as education or

health could signicantly improve the living conditions

fiGUre 16: du K su

ic Gu lc(n rcnt)

Urban Rural

0

2

6

8

4

10

12

2Thepoorest


Sources:Cameroonian authorities and Bank Staf calculations.

fiGUre 17: fu su sh

Cu ic Gu(n rcnt)

0

1

2

3

4

5

2Thepoorest



fiGUre 18: fu Cu sc(n rcnt o totl ntrmry ul conumton)

Fishing2%

Forestry

14%

Transport

30%

Agriculture

1%

Other

37%

Public

Administration

16%



21/40


bx 1: rg fu su - sc C su

Indonesia (1997-2005)

Context: Reorming uel subsidies has been a persistent policy challenge in Indonesia. Indonesia has attempted to

tackle subsidy reorm a number o times to improve the scal position and achieve other policy objectives such as

improving energy efciency and protecting the environment.

Reforms since 1997: The rst two attempts o cutting subsidies in 19 98 and 2003 were unsuccessul. Drastic cuts

instead o a gradual approach, poor communication and general dissatisaction with the Government led to violent

protests and the measures were nally rolled back. Concerned over the increasing scal pressure rom uel subsidies,

the Government undertook two large uel price increases in 2005. As a result, the price o diesel uel doubled and that

o kerosene nearly tripled. Protests again took place in opposition to the reorm, but with less intensity than beore. The

Government was led by President Yudhoyono who was rst elected in 2004 and won a convincing reelection in 2009.

Mitigating measures: The 2005 reorms were accompanied by unconditional cash transers or the poor which

covered 19.2 million households (35 percent o the population). Other measures included the health insurance or thepoor program, school operational assistance program, and expanded rural inrastructure support project. A number

o analyses have credited the reduced intensity o protests in 2005 to the creation o these welare programs.

Lessons: A rapid reduction in subsidies can generate opposition to reorm, while a popular Government and a clear

communication strategy increase the likelihood o success. Targeted cash transers have proved to be eective and

popular mitigating measures.

Philippines (1996)

Context: The Philippines are a net oil importer. Until the late 1990s, the downstream oil sector was heavily regulated,

resulting in price subsidies o uel products when international oil prices rose. The Oil Price Stabilization Fund (OPSF)

stabilized domestic prices o uel products by collecting or paying out the dierence between regulated domestic pricesand actual import costs. Increases in domestic prices were politically difcult to implement. As a result, the national

Government had to replenish regularly the OPSF.

Reforms: Initially, the political environment was not conducive to a uel subsidies reorm, because President Ramos

had won the election only by a small margin and his party was a minority in both chambers o Congress. Nevertheless,

a public communication campaign began at an early stage and included a nationwide road-show to inorm the public

o the problems o oil price subsidies. While the presidents party was a minority in Congress, he set up a coordination

body between the executive and the two chambers o Congress and used it to prioritize the oil deregulation bill and

orge consensus on it. In 1996, the Government passed the law to abolish the OPSF and allow the prices to move

reely. The industry remains liberalized today and movements in international oil prices have been passed through

onto domestic prices.

Mitigating measures: The 1996 law included a transition period during which uel product prices were adjusted monthly

using an automatic pricing mechanism. During this period, the Government provided transers to the OPSF to absorb

price increases in excess o a threshold. More recently, the authorities announced several measures to mitigate the

impact o the ood and uel crisis in mid-2008. The Government launched a package o pro-poor spending programs

that are nanced by windall VAT revenue rom high oil prices. The policy package included electricity subsidies or

indigent amilies, college scholarships or low-income students, and subsidized loans to convert engines o public

transportation to less costly LPGs. In addition, the Government distributed subsidized rice to low-income amilies and

started a conditional cash transer program.

Lessons: The Philippines experience underscores the importance o planning, persistence, and a good communication

plan in achieving a successul outcome. The survival o the reorm to date can be attributed due to its comprehensiveness

and mitigating measures or the poor during the 2008 uel price hike which helped maintain popular support.

Source: International Monetary Fund (2013a).


22/40


o Cameroons people, its human capital, and its

productivity. The eect on the overall price level would

also be limited.

An increase in uel prices could have direct and

indirect eects on the cost o living or households.

Directly, households are aected through their own

consumption o gasoline or kerosene. Indirectly, they

are also aected since petroleum products are used

as intermediary products in many sectors and their

higher price will eed into the price o the nal good

produced by these sectors.

To capture both these eects, the interdependence o

sectors needs to be taken into account and a Social

Accounting Matrix (SAM) multiplier analysis has

been used or this purpose. A SAM is an input-output

table, representing the transactions being carried

out between sectors or a given year. It describes

all the income received and expenditures made by

households and various sectors, thus capturing the

linkages within the economy.

Using this ramework, the hypothetical eect on

prices o several scenarios or uel price reorm can

be simulated or il lustrative purposes. Removing all

uel subsidies, or instance, would imply an increase

o 43 percent, 55 percent, and 105 percent or

gasoline, diesel, and kerosene, respectively, and lead

to a one-time adjustment o about 3 percent in the

overall price level (Figure 19). The highest increases

fiGUre 20: ag t pc: a G

C, 2007

(n Us cnt r tkm)

0 5 10 15

Africa: Mombasa-Kampala

Africa: Douala-NDjamena

Africa: Lome-Ouagadougou

Africa: Durban-Lusaka

China

United States

Brazil

Pakistan

West EuropeLong Distance (France)

Source: World Bank.

would be observed in transport, shing, and orestry

(7.5 percent, 7 percent and 5.2 percent, respectively).

The eects o alternative scenarios could be worked

out. Assuming these same increases as above or all

petroleum products except kerosene would suggest a

one-time overall price adjustment o about 2 percent.

Because subsidies or kerosene do not account or the

bulk o the scal costs, excluding them rom a price

adjustment would not erode much the potential scal

savings o this action. This scenario would generate

scal savings o about CFAF 350 billion (2.7 percent

o GDP). Yet another example where the prices or all

petroleum products except again kerosene would rise

by CFAF 150 would lead to a one-time overall price

adjustment o only 1.1 percent, but save the budget

about CFA 210 billion (1.6 percent o GDP).

These one-time price adjustments could be urther

contained through accompanying measures. The

price structure or petroleum products contains or

instance a number o taxes that could be revisited

and simpliied. Furthermore, as mentioned in last

years July issue o the Cameroon Economic Update,

over-regulation plagues the transport systems in

Cameroon. Transport prices charged to shippers tend

to be disconnected rom the actual vehicle operating

costs. The system seeks to protect existing transport

fiGUres 19: pc Chg puc(n rcnt)

0

1

2

3

4

5

6

7

8

Transport Machinemaintenance

Waterand

sanitation

Vehiclemaintenance

Agricultureproducts

ForestryFishing Overallpricelevel



23/40


operators at the expense o encouraging competition.

Inefcient operators and aging truck leets are thus

kept aloat, pushing down the quality o road transport

services to the lowest level possible, since there is

no incentive to oer better services. As a result, the

average transport price on the Douala-NDjamena

corridor, or instance, is about 11 cents per ton Km:

almost double than that o China, three times higher

than in Brazil, and more than ve times higher than in

Pakistan (Figure 20).4

4 Teravaninthorn and Raballand (2009).


24/40


HealtH in Cameroon

Introduction

Over the past two decades, Cameroon has achieved

one o the smallest reductions in the under-ve child

mortality rate in the world and lie expectancy has even

declined. The burden o health care nancing is largely

born by households and risk-pooling mechanisms

are quasi-inexistent. The limited public resources

allocated to health do not seem to be deployed where

they are the most needed. As a result, substantial

disparities exist in health outcomes between rural and

urban areas, as well as across socio-economic groups,

thereby perpetuating poverty and vulnerability.

In light o the aim o making Cameroon an emerging

economy, the lack o progress in health outcomes

should be a source o concern. The role o human

capital has been recognized as being indispensable

to economic growth. Good health raises human capital

and thereore the economic productivity o individuals

and, thereby, the economic growth rate o the country

as a whole. Better health increases workorce

productivity, whether skilled or unskilled, by improving

general physical and mental capacities, such as vigor,

cognitive unctioning and reasoning ability, and by

reducing illness and incapacity. Furthermore, good

health helps improve levels o education by increasing

levels o schooling and scholastic perormance.

Without a labor orce with the minimum levels o

education and health, an economy is not able to

sustain an appropriate and continuous growth path.

The availability o appropriate and timely data on

health is problematic in Cameroon. No annualreport on health statistics has been produced in

over a decade. This does not mean that there is no

data on health generated in Cameroon, but there is

little standardization, collection, consolidation, and

analysis. Health centers routinely ll in reports to the

district authorities which are ofcially in charge o data

collection, planning, and monitoring and evaluation. In

addition, donors and the regional MOH administration

regularly request reports on health activities. This

routine data is, however, rarely compiled at the

national level. As a result, Government and donors

rely on ad hoc and punctual surveys such as national

household survey or Demographic and Health

Surveys (DHSs) to assess and measure outcomes in

Cameroons health sector.

This chapter draws on the recently-completed

Country Health Status Report or Cameroon and is

able to describe Cameroons health prole, discuss

the resources allocated to health (inancial and

staing), and suggest some options going orward.

The introduction o program budgeting in 2013 should

improve the efciency o public spending, narrowing

the gap between needs and budgetary allocations.

In addition, a more eective data collection and

management system would be called or; prepayment

and risk-pooling mechanisms such as mutual health

organization and mandatory ormal sector insurance

may need to be extended; and approaches rewarding

perormance currently being piloted in Cameroon

could be rolled out urther.

Cameroons Health Prole

Over the last two decades, there has been littlechange in Cameroons health indicators. The

under-ve child mortality rate has slightly improved.


25/40


About 16 more children out o every 1,000 survive

their rst ve years in Cameroon than two decades

ago. This slight progress pales, however, compared

to an average o 65 additional children surviving in

Sub-Saharan Arica (Figure 21). Lie expectancy in

Cameroon has even declined since 1990 by about two

years, while countries in Sub-Saharan Arica have on

average gained about ve years (Figure 22).

As a result, Cameroons health indicators lag behind

those o the rest o Sub-Saharan Arica and behind

those observed in countries to which Cameroon is

economically comparable (Figures 23 and 24). For

instance, Cameroon has one o the highest under-ve

child mortality rates in the world (122 deaths per

1,000 live births), exceeding the average in developing

Sub-Saharan Arica (108 deaths per 1,000 live births)

with malaria, pneumonia and diarrhea being the main

causes o death. Similarly, its maternal mortality ratio

is also higher than the average or Sub-Saharan Arica

and has increased substantially over the past decade.

The ratio is slightly higher than those observed in

countries such as Liberia and Sudan, and even higher

than neighboring CAR and Chad. Pregnancy and

fiGUre 21: Chg U-5 Ch m

r, 19902010(r 1,000 lv rth)

90

80

70

60

50

40

30

20

10

0

CAR

Cameroon

Burundi

Ghana

Lowermiddle

income

BurkinaFaso

Low

income

Sub-

Saharan

Africa

Senegal

Benin

Nigeria

Sources: World Development Indicators, Bank Staf calculations.

fiGUre 22: Chg l excc

bh, 19902010

(n yr)

4

2

0

2

4

6

8

Cam

eroon

CAR

Coted'Ivoire

B

urundi

Sub-S

aharan

Africa

S

enegal

Nigeria

Lower

middle

income

Low

income

Burkin

aFaso

Benin

Ghana

Sources: World Development Indicators, Bank Staf calculations.

fiGUre 23: U-5 Ch m, 2011(r 1,000 lv rth)

0

20

40

60

80

100

120

140

Cameroon

Sub-SaharanAfrica

(developingonly)

Low

income

countries

Lowermiddle

incomecountries

Middleincome

countries

Source: World Development Indicators.

fiGUre 24: m m, 2010(r 100,000 lv rth)

0

100

300

200

400

500

600

700

800

Cameroon

Sub-SaharanAfrica

(dev

elopingonly)

Low

income

countries

Lowermiddle

inco

mecountries

M

iddleincome

countries



26/40

HealtH in Cameroon 17

childbirth remain signicant risk actors or mortality:

One woman dies every two hours rom complications

rom pregnancy or childbirth, and one pregnancy out

o 127 is atal.

Within Cameroon, substantial disparities exist in

health outcomes between rural and urban areas and

across socio-economic groups. According to data

rom DHS, progress has been made between 2004

and 2011 in reducing inant mortality rates both in

rural and urban areas, and across income levels

(Figures 25 and 26). Reductions in under-ve child

mortality rates have been most pronounced in the

middle quintiles. Indicators o malnutrition (height

and weight or age) also suggest that the nutritional

status o the population has overall improved since

2004, although the share o children signiicantly

below the average has increased in the poorest

quintile (Figure 27). Despite this progress, mortality

levels remain substantially higher, however, among

the poor and in the rural areas (Figures 28 and 29).

For instance, the under-ive child mortality rate in

households in the poorest quintile (i.e. the poorest

20 percent o households) is more than twice as high

as that observed in households in the richest quintile.

At the regional level, a similar story can be told.

Signicant progress has been made to reduce inant

and under-ve child mortality in many regions, but

major geographic discrepancies remain (Figures 30

and 31). The greatest reductions in chi ld mortality

were observed in the East (90 per 1,000 live births)

fiGUre 25: Chg i m r

lc, 20042011(r 1,000 lv rth)

Urban Rural

30

20

10

0Infant Mortality Under 5 Mortality

Sources: DHS-MICS (2011), DHS (2004), Bank Staf calculations.

fiGUre 26: eu U 5 mr sc-cc su, 200411(r 1,000 lv rth)

30

20

10

5

15

25

35

0The poorest Q2 Q3 Q4 The richest


fiGUre 27: Chg mu, 200411

sc-cc su(n rcnt low -2se)

10

5

0

10

5

Height-for-age Weight-for-height Weight-for-age

Poorest quintile Second Middle Fourth Richest quintile


fiGUre 28: i m r blc, 2011(r 1,000 lv rth)

0

50

100

150

200

Infant Mortality Under 5 Mortality

Urban Rural

Sources: DHS-MICS (2011), Bank Staf calculations.


27/40


and the South (50 per 1,000 live births), while the rate

hardly changed in Douala5. Child mortality remains

nevertheless extremely high in the poorest parts o

the country, such as the North or the Far North, where

close to 20 percent o the children born die beore

their ith birthday (191 deaths and 168 deaths per

1,000 live births in the North and the Fart North,

respectively).

5 Changes in under-ve mortality rates between 2004 and 2011

may be over-estimated or the Eastern region because o sample

size constraints in that region in the 2011 DHS-MICS.

fiGUre 31: U 5 m rg, 2011(r 1,000 lv rth)

0

50

100

150

200

250

North-W

est

Douala

Yaound

East

West

South

Littoral(excl

Douala)

Centre(excl

Yaound

)

South-W

est

Adamawa

FarNorth

North


fiGUre 30: Chg U-5 Ch m

rg, 200411(r 1,000 lv rth)

100

60

20

40

80

0

20

East

South

Yaound

North-West

West

FarNorth

South-West

North

Littoral(excl.

Douala)

Adamawa

Douala

Centre(excl.

Yaound)


Similar observations can be made in terms o

utilization o health services. While the use o pre-natal

health service is close to 100 percent or the richest

quintile o the population, it is below 60 percent or

the poorest. The richer you are, the more likely you

are to beneit rom delivery assisted by a qualiied

proessional (nurse and/or doctor). The poorest are

more likely to be assisted by a riend or a traditional

midwie. Coverage or assisted deliveries among therichest quintile is almost ive times higher to that

observed in the poorest quintile (Figure 32).

Geographically, the Northern Regions have the ewest

assisted deliveries (Figure 33). Between the two most

recent DHS surveys (2004 and 2011), the percentage

fiGUre 32: a d

sc-cc su, 2011(n rcnt)

0

20

40

60

80

100

Poorest

quintile

Second Middle Fourth Richest

quintile

Source: DHS-MICS (2011).

fiGUre 29: U 5 m r

sc-cc su, 2011(r 1,000 lv rth)

0

50

100

150

200

The poorest Q2 Q3 Q4 The richest



28/40


preventing individuals rom alling into poverty as the

result o catastrophic unplanned medical expenses,

and protecting and improving the health status o

populations by ensuring inancial access to these

essential services.

The way health care is inanced aects the overall

perormance o health systems. Direct purchasing

o health services when needed by an individual

(user ee) is a driver o inequity, as it depends on

this individuals wealth. This eect can be mitigated,

however, through prepayment mechanisms such

as health insurance, pooling the risk at the level o a

group o contributors. Alternatively, public spending

inanced by general taxation and external support

could und the delivery o health services and acilitate

cross-subsidization rom the wealthy to the poor.

In light o the poor results in health indicators,Cameroon overall spends quite a lot compared

to Sub-Saharan Arican countries (Figure 35).

o childbirth deliveries that were assisted by a health

proessional increased on average rom 61.7 percent

to 63.6 percent. In the Far North, however, only

21.8 percent o births were attended by skilled

personnel, compared to 93 percent in the Littoral and

91.6 percent in the West.

Substantial dierences in maternal mortality also

show that pregnancy-related deaths are substantially

higher in rural than in urban areas. Women and

newborns in poor and rural communities have a

higher risk o death and higher chances o early

childbirth (young people aged 10 to 24 in these

segments o the population have a 33 percent

pregnancy rate). Similarly, as shown in Figure 34,

the proportion o children aged 1223 months with

ull immunization varies rom 30.9 percent in the FarNorth to 82.5 percent in the North West.

Resource Allocation

Why are there such great variations in health

outcomes across geographic locations and socio-

economic status? An ef cient and well-perorming

health system should ensure that individuals have

access to eective preventive and curative healthcare. A good health care inancing strategy would

thus aim at reducing inequalities in access to services,

fiGUre 33: a d

rg, 2011(n rcnt)

0

20

40

60

80

100

Douala

West

Littoral(excl.

Douala)

North-West

Yaound

South

South-West

Center(excl.

Yaound)

East

Adamawa

North

FarNorth

Source: DHS-MIS (2011).

fiGUre 34: pcg ch g

1223 h u cc, 2011

Bua

Douala

Ebolowa

Bertoua

Bafoussam

Bamenda

Ngaoundr

Garoua

Maroua

YAOUND

N I G E R I A

C H A D

C E N T R A L A F R I C A NR E P U B L I C

C O N G OG A B O NEQUATORIAL

GUINEA

EQUATORIALGUINEA

N O R D -

O U E S T

S U D -

O U E S TO U E S T

L I T T O R A L

C E N T R E

S U D

E S T

A D A M A O U A

N O R D

E X T R E M E

N O R D

Bua

Douala

Ebolowa

Bertoua

Bafoussam

Bamenda

Ngaoundr

Garoua

Maroua

YAOUND

N O R D -

O U E S T

S U D -

O U E S TO U E S T

L I T T O R A L

C E N T R E

S U D

E S T

A D A M A O U A

N O R D

E X T R E M E

N O R D

N I G E R I A

C H A D

C E N T R A L A F R I C A NR E P U B L I C

C O N G OG A B O NEQUATORIAL

GUINEA

EQUATORIALGUINEA

Bno

u

Vina

Djr

em

Sanaga

Kade

i

Boumba

DjaKom

Nyong

Mbam

Mbu

Faro

Lom

Wouri

Gulf o f

Guinea

LakeChad

10E 12E 14E 16E

12E

10E8E

14E 16E

2N

4N

6N

8N

10N

12N

2N

4N

6N

8N

10N

12N

0 40 80 120

0 40 80 120 Miles

160 Kilometers

JUNE 2013

30.9 EXTREMENORD35.2 SUD

38.1 NORD

47.3 EST

51.6 CENTRE(EXCLUDINGYAOUND)

53.7 ADAMAOUA

63.7 OUEST

66.3 LITTORAL (EXCLUDINGDOUALA)

75.2 SUD-OUEST

82.5 NORD-OUEST

PROVINCECAPITALS

NATIONAL CAPITAL

PROVINCEBOUNDARIES

INTERNATIONAL BOUNDARIES

This mapwas producedby the MapDesignUnitofThe WorldBank.The boundaries,colors,denominations andanyother informationshownonthis mapdo notimply,onthe partofThe WorldBankGroup,anyjudgmentonthe legalstatus ofanyterritory,oranyendorsementoracceptance ofsuch boundaries.

GSDPMMap DesignUnit

CAMEROON

VACCINATIONS, 2011


29/40


Cameroon spends US$61 per person on health,

above the average or Sub-Saharan Arica excluding

South Arica (US$ 51), and in line with countries

such Senegal and Nigeria. These numbers include

spending in health sector rom Government, external

donors, and private sources (i.e. out-o-pocket

payments rom beneciaries).

Public spending in the health sector in Cameroon

is, however, low. While public resources allocated to

health have progressively increased over the past

ten years, they remain one o the lowest in Arica

in terms o GDP (Figure 36) at 1.5 percent o GDP.

Relative to the total budget o the Government, the

share allocated to the health sector in Cameroon

also alls below the average o Sub-Saharan Arican

countries and has only recently moved above theaverage o CEMAC countries (Figure 37). The budget

share allocated to health in Cameroon also alls short

o the WHO recommendation o 10 percent, as well

as o its Abuja commitment. The Government o

Cameroon pledged in 2001 in Abuja, along with other

members o the Arican Union, to allocate 15 percent

o its annual budget to the health sector. In spite o

this, public spending or health over the last decade

has never exceeded 9 percent o the total budget.

As a result, out o the US$61 per Cameroonian spent

on health in 2010, the Government contributed

only US$ 17 (i.e. 28 percent o which US$ 8 were

provided by international donors). Compared to

other CEMAC countries, Cameroon has been or the

last decade the country that has allocated the lowest

share o its public spending to health (Figure 38). The

cost o health care is thus largely borne by households

and Cameroon has one o the highest levels o direct

payments rom the users (out-o-pocket) relative to

total health expenditure in all o Sub-Saharan Arica.

Out o 37 countries in Arica with available data or

2009, Cameroon had the th highest level o out-o-

pocket spending relative to total spending (Figure 39).

fiGUre 37: puc Hh exu,

200110

(n rcnt o bugt)

4

6

8

10

12

14

16

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Abuja commitment WHO target Sub-Saharan Africa

CEMAC Cameroon


fiGUre 35: Hh exu, 2010(n Us$ r ct)

0

20

10

40

30

60

50

80

70

DRC

Ethiopia

CAR

Burundi

Mozambique

Gambia

Chad

Benin

Kenya

BurkinaFaso

Senegal

Cameroon

Nigeria

Ghana

CotedIvoire

Sub-

Saharan

Africa*

Source:World Development Indicators.* excluding South Arica, Somalia and Zimbabwe.

fiGUre 36: puc Hh exu,

sc Cu, 2010(n rcnt o Gdp)

0.0

1.0

0.5

2.0

1.5

2.5

3.5

3.0

4.0

4.5

Cameroon

Nigeria

Kenya

Gabon

CAR

Benin

Ethiopia

Sub-

Saharan

Africa

Low

&middle

income

Ghana

Burundi

Senegal

Mozambique

BurkinaFaso



30/40


Usually when user ees are charged, all patients

pay the same price regardless o their capacity to

pay. Consequently, the risk o nancial catastrophe

and impoverishment is high. When prepayment

mechanisms are not available and patients pay at the

point o service, the sick bear all o the nancial risks

associated with paying or care. The user must decide

i he can aord to receive care, and oten or poorhouseholds this means choosing between paying or

health services and paying or other essentials, such

as ood or education. Oten households are orced to

sell household goods or livestock in order to cover

the cost o health services. According to the 2011

Cameroon Demographic and Health Survey-Multiple

Indicator Cluster Survey (DHS-MICS), among

households who sought any type o health care, the

poorest income quintile was eight times more likely

to cover medical expenditures through the sale o

household goods than the richest quintile (Figure 40).

One way to reduce reliance on direct payments is to

encourage risk-pooling and prepayment methods toinance health care. Risk-pooling mechanisms are,

however, quasi non-existent in Cameroon. In 2006,

there were 120 micro-insurance schemes covering

approximately one percent o Cameroons population.

Since then, Cameroon has put in place a Strategic

Plan or the Promotion and the Development o

fiGUre 38: puc Hh sg, sc

Cu, 1995-2012(n rcnt o totl hlth xntur)

0

20

40

60

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Low & middle income Sub-Saharan Africa

Cameroon CEMAC


fiGUre 40: suc Huh Hh

C fcg, 2011(n rcnt)

0

80

60

40

20

The richest Fourth Middle Second The poorest

Salary/liquid funds

Savings

Loan (with & without interest)

Sale of goods or animals


fiGUre 39: ou--ck Hh exu, 2009(n rcnt o totl hlth xntur)

0

20

10

40

30

60

50

80

70

90

Namibia

Botswana

EquatorialGuinea

Mozambique

SouthAfrica

Lesotho

Djibouti

Rwanda

C

apeVerde

Zimbabwe

Liberia

Senegal

Zambia

Bu

rkinaFaso

Burundi

Ghana

Av

erageSSA

Niger

Benin

Guin

ea-Bissau

Ethiopia

Tchad

Congo

Kenya

Mali

Gabon

Uganda

Eritrea

CAR

Togo

Cameroon

Sudan

C

ted'Ivoire

SierraLeone

Guinea



31/40


Mutual Health Insurance (20052015), which

aims to cover 40 percent o the population by 2015

through mutual health insurance schemes, but little

progress has been made with only one percent o

the population being covered in 2010. Here, also,

important regional disparities can be observed, with

health insurance coverage in the North-West about

thirty times higher than in the East (Figure 41).

Even when public resources are allocated, available

data suggest that they may not be deployed where

they are most needed. According to the data rom the

DHS and rom the project logbook, or instance, public

investments do not seem to be related to the needs

o the population. Regions where under-ive child

mortality was high in 2004, or instance, received on

average less investment in health in per capita terms

during 201012 (Figure 42).6 The same observation

can be made with regards to assisted deliveries:

regions with lower rates o assisted deliveries in

2008 received, on average, less public unding in

subsequent years (Figure 43).

A similar story unolds regarding health personnel.

Cameroon enjoys one o the highest densiti es onurses and doctors in Sub-Saharan Arica (Figure 44).

With 1.9 doctors per 10,000 people, or instance,

Cameroon is signiicantly above the average o

1.3 doctors per 10,000 people in Sub-Saharan Arica.

The country has also almost twice as many doctors

as the minimum recommended by the WHO (1 doctor

per 10,000 people). The main issue regarding

6 These numbers take also into account each regions area torecognize that providing a given service to a population sparsely

scattered will cost more than i the population was more densely

concentrated.

fiGUre 41: Hh iuc Cg, 2009(n rcnt o oulton)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

North-West

Adamawa

South-West

West

Littoral

South

Centre

FarNorth

North

East

Total

Sources: Etude Diagnostique des Mutulles de Sante au Cameroun

(2010), Bank Staf calculations.

fiGUre 42: puc i Hh

(g 2010-12) . Ch m (2004)

rg

Adamawa

Center

EastFar North

Littoral

North

North-West

West

South

South-West

0

0.01

0.02

0.03

0.04

0.05

0.06

50 70 90 110 130 150 170 190 210 230

Under 5 Child Mortality (per 1,000 live births)


Several actors contribute to the low coverage and

sustainability o these schemes. Inormation and

awareness among the beneciary populations are not

widespread. Membership is low and in turn revenue

collection is limited. Relations with contracted health

care providers are poor. In addition, inancial and

technical support as well as leadership rom the

associated ministries tends to be limited.

Longer-term plans or expanding prepayment and

incorporating community and micro-insurance

into the broader pool are also important. Pools that

protect the health needs o only a small number o

people are not viable in the long run. A ew episodes

o expensive illness will wipe them out. Multiple pools,

each with their own administrations and inormation

systems, are also inefcient and make it difcult to

achieve equity. Usually, one o the pools will provide

high beneits to relatively wealthy people, who will

not want to cross-subsidize the costs o poorer, less

healthy people.


32/40


human resources in the health sector is thus not the

numbers, but their distribution across the country.

The distribution o health proessionals is highly

urban-ocused and varies signiicantly by region

(Figures 45 and 46). The majority o physicians inthe country are based in urban areas and more than

hal o Cameroons health workorce is employed in

three administrative regions: the Center, Littoral and

the West, which are home to the three largest cities

in Cameroon (Yaound, Douala, and Baoussam).

The Center Region (including Yaound), home to only

18 percent o the population, accounts or almost

40 percent o the physicians. On the other hand, the

Far North, which is also home to 18 percent o the

population, has only eight percent o physicians. In

addition, absenteeism in Cameroon is a problem,

especially in rural remote areas, and contributes tothe migration o health personnel towards urban

centers. Data rom a recent World Bank study (2012a)

showed that only 32 percent, 45 percent and 58 percent

o health acilities in the South-West, North-West and

East regions, respectively, operated with ull sta on

the day o the survey.

fiGUre 44: phc d, sc Cu, 2009(r 10,000 ol)

Physicians density (per 10,000 population) WHO recommendation (minimum)

0

2

4

6

8

10

Liberia

S

ierraLeone

Malawi

Niger

Ethiopia

Rwanda

M

ozambique

Burundi

Chad

Guinea-

Bissau

Mali

Lesotho

Eritrea

Togo

Zambia

Senegal

Benin

BurkinaFaso

CAR

Ghana

Congo

Guinea

DR

C

Uganda

Average

SSA

Kenya

C

ted'Ivoire

Zimbabwe

Cameroon

Gabon

Botswana

Namibia

CapeVerde

S

outhA

frica


fiGUre 43: puc i Hh

(g 2010-12) . a d

(2008) rg

Adamawa

Far North East Center

Littoral

North

North-West

West

South

South-West

0

0.01

0.02

0.03

0.04

0.05

0.06

1009080706050403020100

Assisted Deliveries (in percent of total)


fiGUre 45: Hh s rg

du, 2011(n rcnt o totl)

0

20

10

40

30

50

Center

Littoral

West

FarNorth

SouthWest

North

North-West

East

Adamawa

South

Nurses Doctors

Source: Cameroon Health Workorce Census (2011).


33/40


Incentives or health sta to work in diicult

environments or to perorm are limited. Even though

bonuses to health sta are provided, they are based

on skills (i.e. training) and vary based on grade and

years o services rather than perormance. Similarly,

there are limited career options or opportunities

or career development working in rural areas. In

act, being ar rom urban centers tends to have a

negative impact on promotion opportunities. Overall,

health sta are thereore better o working in urban

centers, where living conditions are better, salary

and premium identical, and the chances o being

promoted higher relative to sta in rural areas.

Financial incentives are, however, not the only driver

o motivation. A recent survey o health proessionals

conducted in the Center, North and East Regions o

Cameroon showed that an increase o 50 percent

in salaries was not as important as good working

conditions, i.e. the availability o equipment and

material (Figure 48).7 Were health workers, doctors

and nurses to be given appropriate equipment and

supply o medicine, they would be more than twice

more likely to choose a rural posting than without this

incentive. Rewarding working in difcult conditions

by accessing training and oering opportunities to

progress career-wise is also an important actor o

motivation to ensure retention and service delivery

in remote areas.

7 The survey covered 351 health proessionals (doctors and

nurses) and medical students.

fiGUre 47: U 5 Ch m r (2004)

. Hh p d (2011)

North-West Far North

Adamawa North

South-West East

West

South

Littoral

Center

4

6

8

10

12

14

16

18

90 110 130 150 170 190 210

Under 5 Child Mortality Rate (per 1,000 live births, 2004)


fiGUre 48: pc ru J pg(o rto)

0

0.5

1

1.5

2

2.5

Infrastructure

50%B

onus

Career

Development

Lodging

Urban

Transfer

25%B

onus

Accessibility


fiGUre 46: nu dc

rg, 2011(r 10,000 ol)

0

0.5

1

1.5

2

2.5

North-West

FarNorth

Adamawa

North

South-West

East

West

South

Littoral

Center

Public Private

Sources: Cameroon Health Workorce Census (2011), Bank Stafcalculations.

Furthermore, the distribution o health workers does

not seem to ollow health needs. Looking at the inant

mortality rates across regions in 2004 and the density

o health workers (measured as a ratio to population)

in 2011, density is the lowest in the regions where

health outcomes are the poorest (Figure 47). The

North, Far North and Adamawa Regions had the

highest inant mortality rates in the country, but some

o the lowest densities o health workers.


34/40


Options for Going Forward

Program Budgeting

The introduction o program budgeting starting in

2013 should improve efciency o public spending.

The new approach places the line ministries at the

center o the budget cycle. These ministries will have

now more lexibility in preparing and executing their

budgets, but will also be held accountable or results.

As such, program budgeting addresses many o the

critical short-comings that have aected the countrys

public expenditure management in the past: excessivecentralization o the budget processes, leading to low

budget execution and poor strategic allocation o

resources; and poor value-or-money and quality o

service delivery.

Production and use o highquality data

In this new budget environment, one major

challenge or Cameroon will be to ensure that

resource allocation in the health sector is evidence-

based. Setting up an eective data collection and

management system would be critical to help

decision-makers monitor health outcomes more

regularly, and ensure that budgetary allocations

are based on needs and perormance. Data to

be collected would have to be prioritized and

standards provided or, to ensure that the additional

data collected by external actors are comparable

and usable. A well-designed unctioning health

management inormation system (HMIS) would not

only enable the Ministry o Public Health to design

evidence-based policy and be reactive to unoreseen

shocks (e.g. capturing early signs o epidemic), but

also assess implemented policies.


35/40


bx 2: m Hh e d: ru-b fcg

What is Results-based nancing?Results-Based Financing (RBF) is an instrument that links nancing to pre-determined results, with payment made

only upon verication that the agreed-upon results have actually been delivered. RBF or health reers to any program

that transers money or goods to either patients when they take health-related actions (such as having their children

immunized) or to healthcare providers, when they achieve perormance targets (such as immunizing a certain percentage

o children in a given area).

What Makes Results-based Financing different?

Traditionally unding or health has been directed toward inputssalaries, construction, training, equipment. Improved

health was assumed to ollow, but this has not always happened. Despite billions o dollars over the last dec ade, many

countries in Arica are still alling short, particularly in areas that require a unctioning health system. Sub-Saharan

Arica, or instance, has the highest rate o maternal deaths in the world with an average o about 900 deaths per

100,000 live births. Child deaths and malnutrition are also serious problems.

The undamental issue is the poor perormance o the public health care system, including low levels o physical access

in some places; poor quality o care; a lack o adequate incentive structures or health workers; weak management;

and inadequate data o sufcient quality to monitor and evaluate progress. Individuals must demand services; health

workers must be motivated to deliver adequate care; and the institutions they work or must be encouraged to make

the systemic changes required to achieve health goals. RBF lips the whole equation on its head, starting with the

resultmore children immunized, or exampleand letting health workers and managers on the ground decide how

to achieve them.

The Potential of RBF

A number o developing country experiences strongly suggest that RBF can work. There are currently three countries

(Rwanda, Burundi and Sierra Leone) with nationwide programs and 14 countries with ongoing pilots. These programs help

improve health; strengthen health systems; spur innovation, creativity and country ownership; and encourage reorms

that coner authority and lexibility to local service-delivery levels, ostering problem-solving where it is most n eeded.

When poor patients or households have been oered nancial or material rewards or adopting health-promoting

practices, they respond and health indicators improve. Similarly, when health workers and acilities are given bonuses

upon achieving targets, those targets tend to be met. Results-based nancing has also been shown to help to increase

patient demand or health services.

In addition to improving health, results-based nancing can also contribute to strengthening a countrys health

inormation system. Because accurate monitoring and evaluation o RBF schemes require the development o robust

health inormation and management systems, incorporating the RBF concept, even into donor unds aimed at specic

diseases, reinorces eorts to improve the timeliness, credibility and accuracy o national reporting and monitoring,

thus contributing to improving the overall capacity o a countrys health system.

Source: L. Morgan (2012)

In Rwanda, Burundi and Burkina Faso, or example,

the Ministries o Health are able to maintain an

up-to-date HMIS thanks to the use o incentives and

sanctions or the generation and use o HMIS data

at the health acility, district and sub-national levels.

Health acilities receive poor perormance points

and even inancial sanctions i they do not submit

their monthly HMIS report on time. Management o

acility-level data is a key criterion in the evaluation

o the perormance o managers.

Risk-sharing mechanisms and accessor the poor

Cameroon could take steps towards designing

policies that oster access by the poor to health-

enhancing services and protect the poor rom

catastrophic health spending. The extension o

prepayment and risk-pooling mechanisms such

as mutual health organizations, mandatory ormal

sector insurance and potentially cross-subsidization


36/40


between the two could contribute to reducing

nancial risks associated with illness.

Second, the introduction o pro-poor inancing

mechanisms, such as conditional and unconditional

cash transers and vouchers or health services, could

improve equity and eiciency by increasing public

investments in health while reducing private spending

by the poor. The introduction o voucher-type

systems such as kits obsttricaux to subsidize the

monitoring o pregnancy are currently being piloted

in the Far North, North, Adamawa and East regions.

Getting the incentives right

The national health workorce should be distributed

in a manner that responds to the severe geographic

imbalances in health outcomes in Cameroon and

improve coverage o essential health services. The

question is how to ensure health personnel will

stay in rural areas. In this regard, health workorce

retention policies should include a combination o

both monetary and non-inancial incentives. The

package could include the provision and maintenance

o supplies and equipment or the delivery o a

clearly deined set o basic services, in addition to

salary bonuses or rural postings. Implementation o

this policy may be mo

cameroon economic update no.6, july2013

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