Developing a Sustainable Economy in Cameroon

Preface

Preface Our interest in putting together this volume arose from a desire to contribute to the existing knowledge on the economy of Cameroon as much as from our perception of the knowledge gap in the existing literature in providing valuable inputs into the decision making process. The authors draw their policy implications from solid theoretical and empirical analyses of the economy. By 1987 the rapid growth of the economy came to an abrupt halt followed by a sharp decline in the GDP growth. The underlying weakness of the economic policy and the economy was exposed by the external shocks as world commodity prices fell with external terms of trade falling by more than 50 per cent; at the same time Cameroon's oil output started declining. As the US dollar in which Cameroon's exports were denominated depreciated precipitously and Cameroon's real exchange rate appreciated significantly; this considerably affected the country's competitiveness. This was coupled with the poor performance of the public companies and poor provision of public and social services. In the 1990s, the per capita income fell well below the per capita income of the mid 1980s; the poverty level was also much higher than that of the pre mid 1980s. Cameroon sharply reduced public expenditures and agricultural producers' prices, sliced civil servants' salaries and amenities by more than 60 per cent, which was followed by a sharp 50 per cent devaluation of its currency relative to its pegged currency - the French franc. The GDP per capita fell significantly. As growth picked up towards the late 1990s, inequality in income distribution did not tend to decrease. This made the reduction of poverty the country's top development priority. Cameroon's main products are from the agricultural or primary sector, thus underscoring the importance of transforming the economy, with intra and inter sectoral shift of resources from the low level of agricultural productivity to a much higher level of productive activities with significant value added, such that the agricultural sector is able to reduce the labour force while enabling the economy to produce more goods and services with a flexible labour force. The book discusses strategies of making the economy more productive with greater value added of its goods and services. Accordingly, with huge resources forming a solid foundation for Cameroon's growth and sustainable development, its growth cannot be short-lived as it has been in the past. However, as emphasised in the book, this must be based on proper implementation of the right policies. The book stresses the importance of microeconomic policies for allocating resources efficiently as well as macroeconomic policies of price stability, better resource utilisation, growth with equity, equal distribution, and employment with all- xv Preface inclusive participation in the growth process. It is shown that the key factors in development include increased domestic savings, domestic integration with rural infrastructure, proper management of the national resources and human capital development. Accordingly, all these should be guided by strong and well functioning institutions with good accountability to the people, such that the rapid increase in public expenditure is properly utilised in facilitating, promoting, generating, providing and delivering more goods and services in both quantity and quality to the population , as well as continuously creating greater opportunities for Cameroonians. Aloysius Ajab Amin ...