Scenario planning must price policy risk

Start with a dated snapshot of what a particular product can actually sell through a particular route. The planning record should identify the garment, bill of materials, manufacturing location, buyer, delivery term, payment term and importer. Separate confirmed orders from enquiries and productive capacity from available capacity. A route should enter committed production only when its evidence and resources support the promise being made. This is GFT's recommended planning discipline, rather than a claim that domestic or regional sales are automatically safe.

For Cameroon, the United States preference route demonstrates why legal status must precede probability. The Congressional Research Service report dated 14 August 2026 lists Cameroon among countries ineligible for AGOA for calendar year 2026. USTR records that the termination took effect on 1 January 2020. The later September legislation extends programme provisions through 2028; it does not itself redesignate Cameroon.[S01][S02][S35]

Accordingly, assign zero AGOA-dependent revenue to the committed case while that exclusion applies. Do not multiply hypothetical preferential orders by management's confidence in a diplomatic improvement. That would turn an unavailable treatment into spendable income. A separately verified United States sale under applicable non-preferential treatment could be assessed on its own economics; exclusion from the preference is not a prohibition on all trade. Keep that distinction visible in the model and the commercial narrative.[S01]

For the EU, Access2Markets describes Cameroon's preferential access and requires compliance with origin rules and proof. GFT recommends recognising an export order only after the relevant product file and importer review support the intended treatment, alongside ordinary buyer and credit approval. This is a planning gate, not a claim that an importer's approval binds customs.[S09]

For regional routes, require evidence for the particular destination and shipment. The South African government's March 2026 AfCFTA update reports adoption of the outstanding automotive, clothing and textile origin rules, while separately describing tariff schedules, gazetting and implementation. GFT therefore recommends testing the operative schedule and procedure before assigning a preferential rate to a Cameroonian garment.[S20]

The base case should be demanding without being artificially pessimistic. An unresolved preferential claim can be modelled at the verified non-preferential cost if the buyer accepts the resulting price and the route remains lawful and workable. If the alternative charge is unknown, mark the route unresolved. Do not fill the cell with the desired rate merely to make the workbook calculate. An unknown input is a research task with an owner and a commitment deadline.

Keep sales and capacity consistent. A financial case cannot exclude an uncertain export order while its production plan quietly reserves dedicated equipment for it. Reconcile the approved order book with fabric purchases, labour plans, line allocation and financing. Where the upside requires a distinctive product or machine, state how that asset would be used if the upside never arrives. Shared equipment may preserve flexibility, but only if alternative products and demand have been tested.

13.2 A frozen case needs a reconciliation rule

Use an assumption ledger to separate what is observed, contracted, interpreted and assumed. A buyer order is evidence of a commitment subject to its terms. A broker estimate is a cost input awaiting reconciliation. A supplier declaration supports a particular material record. None should be promoted into another category merely because the forecast needs certainty. GFT recommends a short explanation beside every material assumption so the next reviewer can reproduce the decision.

Reconcile the frozen case against actual commitments at each release meeting. Identify orders added, quantities changed, prices amended and payments deferred. An unchanged forecast total can conceal a different and riskier mix of products. Show changes by order and route before rolling them into the factory total. If the base case depends on collecting a disputed receivable, expose that dependency in the cash view rather than treating the receipt as ordinary sales growth.

GFT recommends calculating route contribution as the cash selling price less the costs attributable to fulfilling the order, with the accounting boundary stated. Identify production, freight, insurance, non-recoverable border charges, evidence preparation, financing and expected contractual service costs. Avoid calling this operating profit when fixed factory costs, depreciation, tax or other overheads remain outside it. Use the same boundary when comparing routes.

The Cameroon National Shippers' Council summary places cotton and polyester fabrics, ready-to-wear clothing and accessories among examples in the 40 percent maximum CET band. It also distinguishes CET duties from national taxes. Treat that summary as a screening warning, not a substitute for the applicable tariff-line annex and transaction treatment. An input and a competing finished garment can both face duties, so protection alone cannot establish factory margin.[S25]

Build separate shock fields for lost preference, changed input duty, origin failure, documentary delay, freight disruption and buyer concessions. Preference loss changes treatment even if production records remain accurate. Origin failure concerns whether the particular goods qualify. A missing document may be remediable without changing the underlying production history. These distinctions should determine who investigates and which quantities are held. They should not be collapsed into an unexplained contingency percentage.

Avoid stacking mutually exclusive duties or charging the same loss twice. If origin failure causes the loss of preferential treatment, the resulting duty is normally represented once in the constructed scenario, subject to verified legal treatment. A separate document-repair cost can be added because it purchases a different activity. Buyer compensation and reduced selling price must likewise be reconciled: a credit already deducted from revenue cannot also remain in a service-cost reserve.

Use linked adverse cases as well as isolated sensitivities. In an illustrative causal sequence, a supplier record fails, a preference claim is held, clearance takes longer and the buyer requests a concession. Each consequence needs its own assumed timing and value. The model should show the mechanism connecting them rather than multiplying independent shock probabilities. The purpose is to expose vulnerability, not to present an unsupported statistical loss forecast.

Consider an illustrative shipment of 10,000 garments, assuming an additional recoverable import-tax payment of XAF 500 per garment. The immediate cash requirement is XAF 5 million, calculated as 10,000 multiplied by 500. This example assumes full eventual recovery solely to explain timing. It establishes neither a Cameroon tax rate nor any company's right to recover tax. A delayed-recovery case should move the receipt date; a denied-recovery case should also recognise the permanent cost.

An illustrative adverse origin case that adds XAF 1,800 duty per garment creates XAF 18 million of additional duty cash for the same shipment. Combined with the illustrative XAF 5 million recoverable-tax payment, the incremental cash need is XAF 23 million before financing, collection delays or other offsets. Use this sum only when both payments genuinely fall within the same funding window; otherwise calculate the peak from dated balances.

A buyer may legally bear a border charge while the supplier still suffers a commercial consequence. Test requests for discounts, refusal to reorder and delivery changes separately from the direct duty payment. Do not assume contractual allocation makes the producer indifferent. Conversely, do not assign every buyer cost to the factory without a contract or an explicit scenario assumption. A useful stress test makes the economic incidence visible without rewriting the agreed terms.

13.5 Scenario severity should be explained before likelihood

Do not assign numerical probabilities unless the basis can be inspected. A management judgement can still be useful, but label it as judgement and show how changing it affects the decision. GFT recommends first establishing whether the factory can survive each coherent adverse case. An expected contribution calculated across cases should never substitute for the funding needed in the case that actually occurs.

Where conditional probabilities are proposed, identify the conditioning event. The chance of a document delay given a missing record is different from the chance of a delay across all shipments. If the sample mixes products, routes or legal periods, preserve those differences before estimating a frequency. Without suitable observations, use named scenarios and bounded commitments. This avoids turning a precise spreadsheet output into an unsupported claim about risk.