What is the currency used in Cameroon?

Brief Overview of Cameroon

Cameroon is a country located in Central Africa, bordered by Nigeria, Chad, Central African Republic, Equatorial Guinea, Gabon, and the Atlantic Ocean. It is a culturally diverse country with over 200 different ethnic groups and languages. Cameroon has a population of more than 25 million people and is known for its natural resources such as oil, gas, minerals, and agriculture. The country has a developing economy and is striving towards becoming a middle-income country by the year 2035.

History of Currency in Cameroon

Cameroon became a German protectorate in 1884 and was later divided between France and Britain after World War I. The French-ruled part became Cameroon’s Republic in 1960, and the following year, the country adopted the CFA (Communauté Financière Africaine) franc as its official currency. The CFA franc was created in 1945 and was initially used by the French colonies in Africa as a way to facilitate trade. After Cameroon’s independence, it joined the CFA franc zone, which included other West and Central African countries.

The Franc CFA: Cameroon’s Currency

The CFA franc is the official currency of Cameroon and is used alongside the West African CFA franc in the CFA franc zone. It is issued by the Central African States Bank (BEAC), which is based in Yaoundé, Cameroon’s capital city. The CFA franc is pegged to the euro, and its exchange rate is fixed at 1 euro to 655.957 CFA francs.

The Role of the Central African States Bank

The Central African States Bank is responsible for issuing and regulating the CFA franc in Cameroon and other countries in the CFA franc zone. It was established in 1972 and is jointly owned by the six member states of the Economic and Monetary Community of Central Africa (CEMAC), which include Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea, and Gabon. The BEAC oversees the monetary policy of the CFA franc zone, and its objective is to maintain the stability of the currency and promote economic growth.

Banknotes and Coins in Cameroon

The CFA franc is available in both banknotes and coins. Banknotes come in denominations of 500, 1000, 2000, 5000, and 10,000 CFA francs, while coins come in denominations of 1, 2, 5, 10, 25, 50, 100, and 500 CFA francs. The banknotes feature prominent figures in Cameroon’s history, including King Njoya, who was a leader of the Bamum Kingdom, and Ruben Um Nyobé, who was a nationalist leader and advocate for independence.

The Exchange Rate of the Franc CFA

As mentioned earlier, the CFA franc is pegged to the euro, and its exchange rate is fixed at 1 euro to 655.957 CFA francs. This means that the value of the CFA franc is determined by the value of the euro. The exchange rate of the CFA franc to other currencies such as the US dollar and British pound varies depending on the fluctuations of the euro.

Where to Exchange Currency in Cameroon

Currency exchange services are available at banks, hotels, and bureaux de change in Cameroon. Tourists are advised to exchange their currency at official exchange bureaus or banks to avoid falling victim to counterfeit money or scams. It is also recommended to carry cash in small denominations as some businesses may not accept high-value banknotes.

Cost of Living in Cameroon

The cost of living in Cameroon is relatively low compared to other African countries. According to Numbeo, a cost of living database, the cost of living in Cameroon is 50.26% lower than in the United States. Food, housing, and transportation are the primary expenses for most Cameroonians.

Digital Payments in Cameroon

Digital payments are becoming increasingly popular in Cameroon, especially among younger generations. Mobile money services such as MTN Mobile Money, Orange Money, and Express Union Mobile are widely used for bill payments, money transfers, and online shopping. However, many Cameroonians still rely on cash for everyday transactions.

Impact of COVID-19 on Cameroon’s Currency

The COVID-19 pandemic has had a significant impact on Cameroon’s currency and economy. The country’s GDP is expected to contract by 1.2% in 2020, mainly due to the effects of the pandemic. The BEAC has taken measures to mitigate the economic impact of COVID-19 by lowering interest rates, injecting liquidity into the banking system, and providing support to businesses affected by the pandemic.

Conclusion: Importance of Cameroon’s Currency

The CFA franc plays a crucial role in Cameroon’s economy and is used for daily transactions, international trade, and investment. Its stability and fixed exchange rate with the euro make it an attractive currency for investors and businesses operating in the CFA franc zone. Though Cameroon’s economy faces challenges due to the COVID-19 pandemic, the country remains committed to its goal of becoming a middle-income country by 2035.

References and Further Reading

Central African States Bank (BEAC). (n.d.). Retrieved from https://www.beac.int/
Numbeo. (2020). Cost of Living in Cameroon. Retrieved from https://www.numbeo.com/cost-of-living/country_result.jsp?country=Cameroon