Surging taxes shrink share of log exports

Cameroon recorded exports of 1.7 million cubic meters of wood and woodwork in 2022, generating an estimated revenue of CFA314 billion, up 7.8% year-on-year, according to a recent report by the National Institute of Statistics (INS). The report highlights a significant shift in the country’s forestry exports, focusing more on processed wood products over logs, in line with government policies aimed at encouraging local processing.

Logs represented a minor portion of the total exports, with only 746 cubic meters exported in 2022. This brought in more than CFA77 billion, accounting for less than 25% of the total export value. Year-on-year, log shipments fell by 22% from 958.3 cubic meters in 2021, when revenues exceeded CFA98 billion (prices do vary depending on the species exported, ed). This decline can be attributed to the Cameroonian government’s decision to impose higher taxes on these products to encourage second-stage processing.

Over six years, from 2017 to 2023, Cameroon gradually increased the export duty on logs from 17.5% to 60%. These increases, outlined in the country’s finance laws, equate to a 343% relative increase in log export taxation. In the 2024 finance law, the export duty was raised further from 60% to 75% of the FOB value of the wood species, a move likely to discourage log exporters.

Sawn wood exports, which have also seen an export duty increase of 165% between 2016 and 2023, remain marginal compared to the total volume. However, the INS report notes significant exports of veneers, a product of more advanced processing than simple sawing, with 57,850 cubic meters sold internationally in 2022, a 15% year-on-year increase. These exports generated CFA24.4 billion in 2022, up from CFA21.8 billion in 2021.

The Cameroonian authorities’ decision to heavily tax logs and, to a lesser extent, sawn wood, precedes the Central African Economic and Monetary Community’s (CEMAC) directive to ban log exports to foster local wood processing. Initially set to start on January 1, 2022, and then pushed to January 1, 2023, the ban’s implementation has been postponed to 2028. However, each member state is tasked with gradually implementing the ban starting January 1, 2025, signaling a significant shift towards enhancing local wood processing capabilities.

Leave a Reply

Your email address will not be published. Required fields are marked *