By Richard Valdmanis

DAKAR, Aug 26 (Reuters) - Plunging oil revenues could stoke
unrest ahead of Cameroon's 2011 elections by hindering social
spending and raising public frustration over the slow pace of
reforms in the impoverished central African state.

Oil output in a country that depends on petroleum for half
of export revenues is on track for a 33 percent drop between
2008 and 2011 as mature fields fall into decline, and lower oil
prices have compounded the impact on the treasury.

"The main question is whether the government is able to keep
the socio-economic risks that come with dwindling oil revenues
at bay," said Rolake Akinola of Eurasia Group.

"With declining revenues, the avenues for social spending,
as well as for cronyism and patronage to manage political
dissent, dwindle," she said.

Cameroon is among central Africa's oldest energy producers
and is widely viewed as among the region's most stable
countries. But public disenchantment with long-serving President
Paul Biya is on the rise over his plans to stand in 2011 polls.

Internal conflict in the country would be a setback for
regional democracy and unsettle billions of dollars' worth of
energy and mining investments that Biya's administration hopes
will rejuvenate its laggard economy in the coming years.

Economic growth is seen rising from 2 percent last year to
around 2.6 percent this year and just over 3 percent in 2011,
lagging the region as a whole and barely keeping pace with the
annual rise in the population.

Oil production has dropped to about 66,000 barrels per day
from above 80,000 bpd in 2008 and more than 180,000 bpd in the
1980s -- marking the steepest percentage decline among the
continent's energy producers -- with revenues to the state
treasury on track to slide more than a third over two years.

Simon Tamfu, exploration manager at Cameroon's state oil
company SNH, said production would likely decline further to
55,000 bpd in 2011 before the startup of new fields pushes
output back up in 2012.

SOURCE OF TENSION

While the government's use of revenues from the oil industry
is hard to quantify, analysts said the decline would likely
affect the regime's ability to subsidise food and fuel for a
population dogged by poverty.

Cameroon boosted its 2010 budget 11.4 percent over 2009 to
2.570 trillion CFA francs ($4.96 billion) but has come under
pressure from the IMF to reevaluate spending and cut subsidies,
in part because of "overstated oil production".

Cameroonian "authorities viewed staff advice as difficult to
implement in the current social and political context", the IMF
said in a report issued last month.

"It is certainly possible that the decline in oil revenues
will mean a paring back of public spending, stoking political
tensions ahead of the elections," said Lisa Lewin of Business
Monitor International.

"Dissatisfaction with the current government is already on
the rise," she said, citing rioting that broke out in 2008 when
food and fuel prices increased.

Biya, 77, came to power in Cameroon in 1982 and has held
sway since. In 2008, he orchestrated a constitutional re-jig
removing term limits that set off violent protests but allowed
him to stand for the elections expected next year.

Biya's government has announced plans to triple electricity
generation by 2020 in an effort to open the door to huge mining
developments vital to diversifying the economy, but experts are
sceptical the power projects will happen on time.

"Unfortunately, the country is facing a number of
challenges, which if not dealt with as quickly as possible could
undermine all these bright perspectives," said Babissakana (Eds:
correct as one name), head of the Prescriptor economic think
tank in Yaounde.

"I am thinking of bad governance, endemic corruption and
growing unemployment," he said. Cameroon is in 146th place on
Berlin-based anti-graft watchdog Transparency International's
ranking of efforts by 180 countries to combat corruption.

Major resource companies including oil giant Total and miner
Rio Tinto are active in Cameroon.
(Additional reporting by Tansa Musa in Yaounde; editing by
Alison Williams)