Cameroon's economy is based on a diversified and self-sufficient agriculture supplemented by substantial petroleum production and a sizable manufacturing sector. Coffee and cocoa are Cameroon's principal agricultural exports, along with cork, wood, and cotton. Cameroon in 2002 stood as number six in the world among cocoa producers, and is the eighth largest producer of coffee. Petroleum, basic manufactures, and machinery and transport equipment provide additional export revenues. The government is trying to stimulate more timber processing. Construction is a growth sector.
The economy suffered since the 1986 declines in the prices for oil, cocoa, coffee, and cotton, as well as the appreciation of the CFA franc, which contributed to the erosion of GDP by more than 60%. Some economic reforms were then initiated, but the government was unable to meet the financial and economic reform goals of several IMF standby programs.
In January 1994, France devalued the CFA franc, causing its value to drop in half overnight. Immediately, prices for almost all imported goods soared, including prices for food and essential drugs. The devaluation encouraged new investment, particularly in oil, and discouraged the use of hard currency reserves to buy products that could be grown domestically. Cameroon's real GDP increased by 3.3% in 1994–95, an improvement from the decline of 4.3% in 1993–94. The 2001 real growth rate of the GDP was around 5%.
An IMF agreement was signed in 1997, an Enhanced Structural Adjustment Facility (ESAF) program which concluded in 2000. In 1999, the ESAF was replaced by the Poverty Reduction and Growth Facility (PRGF), under which Cameroon was to receive assistance for three years (beginning in 2000). The IMF is pressing for reforms in the areas of budget transparency and privatization. Cameroon is attracting some foreign investment: French and South African companies have bought previously state-owned enterprises, including banks and railroads. The $4 billion, 670-mile-long (1,070 km) Chad-Cameroon petroleum pipeline, which was underway in 2003, could potentially increase revenues dramatically. Production is estimated to be 225,000 barrels per day.