Cameroon Plans to Raise Energy Subsidies to 340B CFA Francs

AFRICAN BUSINESS AND ECONOMYJuly 8, 2026 at 3:19 PM UTC

TLDR

Cameroon plans to increase energy subsidy budget to 340 billion CFA francs in 2027, maintaining fuel and electricity prices under state support despite IMF calls for reform.
Energy subsidies expected to rise in 2028 and 2029, forming more than a quarter of total government transfers and subsidies, reflecting tension between fiscal reform and cost of living.
IMF suggests moving towards automatic fuel price adjustments and targeted support for poorer households to balance subsidies' impact on infrastructure, health, education, and public finances.

Cameroon plans to increase its energy subsidy budget to 340 billion CFA francs in 2027, reversing years of cuts and keeping fuel and electricity prices under state support.

The amount is 30 billion CFA francs higher than the 310 billion CFA francs planned for 2026, according to the country’s 2027-2029 Medium-Term Economic and Budgetary Programming Document. The plan comes despite repeated calls from the International Monetary Fund for a reform of fuel pricing.

The increase is part of a wider rise in government transfers and subsidies. These are projected at 1,246.6 billion CFA francs in 2027, compared with 1,202.2 billion CFA francs in 2026. Energy subsidies will account for more than a quarter of the total and are expected to keep rising in 2028 and 2029.

Cameroon had reduced fuel subsidies after the bill reached almost 1 trillion CFA francs in 2022. Petroleum subsidies fell to 640 billion CFA francs in 2023 and 263.3 billion CFA francs in 2024. The 2025 finance law cut the provision for fuel subsidies to 15 billion CFA francs.

The new plan also reflects pressure in the electricity sector. Low-voltage tariffs have been frozen since 2012, even as production, supply and operating costs have increased. The government is expected to compensate operators for part of the gap between costs and electricity sales, with payments estimated at 79 billion CFA francs in 2025 and 39 billion CFA francs in 2026.

Key Takeaways

Cameroon’s subsidy increase shows the tension between fiscal reform and the cost of living. The IMF wants the country to move toward automatic fuel price adjustments and targeted support for poorer households. The government is taking a slower path because fuel and electricity costs affect transport, food prices, businesses and household budgets. The 2027 increase does not return subsidies to the levels seen during the energy price shock, but it shows that the state is still using the budget to absorb part of the cost. For investors and lenders, the concern is that subsidies can take money away from infrastructure, health, education and debt service. They also make public finances more exposed to oil price swings. For households and companies, subsidies can limit price shocks in the short term, but they can also delay reforms in energy supply and pricing. The electricity issue is central. If tariffs stay frozen while costs rise, the state must keep paying compensation or risk arrears to operators. Cameroon’s challenge is to protect consumers while building a pricing system that is clearer, cheaper for the budget and more credible for financial partners.

Cameroon