Developing a Sustainable Economy in Cameroon

1 - Introduction: Conceptual Issues and Overview

1 Introduction: Conceptual Issues and Overview Aloysius Ajab Amin Introduction Cameroon is blessed with enormous resources. Its huge resource endowments include: (i) natural resources, with mineral reserves, pastures and forest, fertile soil, arable land, water, a good climate, plentiful sunshine and rainfall, and a sea coast with natural harbours; (ii) human resources, with one of the highest levels of education in the continent; and (iii) a very rich, highly diversified cultural heritage. The first category of assets can also be classified to include institutional, financial and infrastructural assets both publicly and privately provided, such as communications and transport, schools and health infrastructure. Natural assets include natural and physical capital. All these greatly affect the living conditions of the population. Growth in per capita income or output is generally an outcome of positive changes in endowments – broadly defined as capital that includes physical capital in the traditional factors of production, machines and materials-processing inventory as well as intangible capital including human capital. Human capital incorporates human knowledge and capacity-strengthening through investments in education with training, health care and research and development (R&D). However, only tangible capital is included in national accounts, with investment regarded as additional to capital. The health of an economy is determined by its labour supply. The educational system produces an educated and skilled labour force. Given its natural and human resource base, Cameroon has a sound and solid foundation for sustainable economic development, a development that can easily meet all the needs of the population and much beyond. An industrious and willing labour force backed by enormous natural resources provides the ingredients for economic success. Cameroon’s economic system brings together the country’s resources, technology and entrepreneurial and managerial skills to meet the human needs of the population through production, distribution and consumption of goods and services. 4 Developing a Sustainable Economy in Cameroon Thus, the management of the economy is critical in ensuring that resources are efficiently and productively utilized, with a key role of financial institutions in ensuring that producers and entrepreneurs have access to the funds needed for appropriate investments. The country has experienced periods of high economic growth (see Table 1.1 below), an indication that with the right set of development policies or strategies Cameroon can attain a broad-based development. For the period 1967– 78, the gross domestic product (GDP) grew at more than 5.7 per cent annually. In the last quarter of the 1970s, which also witnessed favourable terms of trade, income significantly increased at about 10.2 per cent annually until the mid-1980s. Population growth rate was 2.8 per cent yearly. Private consumption increased by 5.4 per cent. Government finances and savings were significantly high. At this time Cameroon’s economic performance was likened to that of the fast-growing East Asian countries. But the Cameroonian economy collapsed in 1986, after two decades of supposed good performance. This reverse posed great challenges to the policy- and decisionmakers . One wonders how a country with such a huge resource base could have so easily slipped into such a devastating crisis. What then could be done, using its vast potential, to put the country on a path of sustainable development? These are basic common issues, which need to be addressed within the country’s own context, yet also taking exogenous factors into consideration. The main objective of this book, which is based on rigorous research, is to debate and discuss solutions to some of Cameroon’s problems and, further, to provide inputs into the decision-making process for improved economic performance and development. The book contains 20 chapters, subdivided into five parts, and including general introductory and concluding chapters, as will be described in the last section of this Introduction. The Cameroonian economy sustained a high economic performance during the period 1961–86, a growth that was predominantly the result of expansion in the agricultural sector, with a strong boost from the petroleum sub-sector towards the end of the 1970s. Petroleum increased its share of GDP to 18 per cent, reducing that of agriculture from 42.3 per cent in 1962 to 33.4 per cent in 1991. The agricultural sector, which has very high potentials for increased productivity, is typified by smallholder production with low productivity per capita. The industrial sector is dominated by firms with high value-added production activities while the primary sector is characterized by agricultural activities. The tertiary sector, mainly the service sector, has both large and small firms where...