Political Economy of Cameroon’s post-Independence … · Web viewThe structural characteristics can be considered from two perspectives: the role of new technologies in the growth

The Political Economy of Cameroon’s Post-Independence Growth Experience

Chapter 16 of volume 2

Georges Koboua, Dominique Njinkeub and Bruno Powo Fossoc

a Department of Economics, University of Yaoundé II, P.O. BOX 7058, Yaoundé, Cameroon. E-mail:

[email protected].

b International Lawyers and Economists Against Poverty (ILEAP), 180 Bloor St-West, suite 904, Toronto,

(Ontario), Canada, M3S 2V6. E-mail: [email protected].

c Institute of Applied Economics, HEC Montréal, 3000 Chemin de la Côte-Sainte-Catherine, Montreal,

(Québec), Canada, H3T 2A7. E-mail: [email protected].

Cameroon Chapter 16

Contents

1. Introduction.....................................................................................................................1

2. Natural resources and economic performance in Cameroon..........................................4

2.1 Analysis of data.........................................................................................................4

2.2 Macroeconomic implications of natural resources: explicit and implicit Dutch

Disease.............................................................................................................................8

3. Economic elements of growth performance.................................................................14

3.1 Macroeconomic determinants of growth.................................................................15

3.2 Microeconomic determinants of growth.....................................................................19

Operation of various markets.........................................................................................19

Behaviour of various agents..........................................................................................22

4. Social and institutional elements of growth performance.............................................26

4.1 Social aspects of growth performance.....................................................................27

Interest groups, rent seeking and coalition building..................................................27

Management of the equilibrium between regional entities........................................34

4.2 Institutional aspects of growth performance............................................................38

Financial repression...................................................................................................39

Financial discipline and the inefficient macroeconomic framework.........................43

5. Conclusion....................................................................................................................46

Appendix: Data definitions and sources............................................................................48

References..........................................................................................................................51

Cameroon Chapter 16

List of Tables

Table 1: Fraction of agricultural area to total area use (in percentage)

Table 2: Primary commodity exports (in millions of USD)

Table 3: Fraction of different segments of population to total population (in percentage)

Table 4: Growth of GDP, inflation, and the real interest rate (in

percentage)

Table 5: Macroeconomic aggregates relative to GDP (in percentage)

Table 6: Contribution of factors to growth in Cameroon

Table 7: Contribution of macroeconomic variables to deviation vis-à-vis

average real GDP per capita

Table 8: Evolution of international and national prices of certain cash

crops (per kg) between 1973 and 1993

Table 9: Distribution of managers of public and state-owned enterprises

in Cameroon by ethnic group (in %).

Table 10: Ministerial positions by ethnic groups between 1960 and 2002

Cameroon Chapter 16

List of Figures

Figure 1: Evolution of terms of trade

Figure 2: Evolution of commodity exports relative to GDP (in percentage)


Figure 4: Evolution of GDP per capita and growth of GDP per capita

Figure 5: Evolution of oil exports and government spending relative to

GDP (in percentage)

Figure 6: Contribution of sectors in GDP

Figure 7: Inflation rate

Figure 8: Evolution of real deposit rate

Cameroon Chapter 16 page 1

1. Introduction

The growth performance of Cameroon, as in other countries, reflects the interaction of

factors like labor and capital, productivity1 and structural characteristics. The structural

characteristics can be considered from two perspectives: the role of new technologies in

the growth process (Gordon 2001) and qualitative aspects such as the functioning of

markets and the regulatory framework. These qualitative aspects assume center stage in

Cameroon. Most markets are underdeveloped, partly due to the institutional rigidities that

can be traced to alternative sources of foreign reserves especially from agriculture and

natural resources, including oil and wood. As such Cameroon’s growth performance

follows that of resource-rich economies; however, availability of more than one resource

base has at times prevented the country from feeling the full effect of shocks and so has

enabled the government to take a lax macroeconomic management approach, with painful

decisions postponed. This overall economic configuration, combined with potentially

volatile social tensions, has prevented the country from growing at its potential level.

For a resource-rich country sound policy is crucial and in the case of Cameroon

the Franc zone institutional arrangements provide the ingredients for an acceptable

macroeconomic framework. But performance has been below potential because of

institutional rigidities that are particularly evident in the case of currency appreciation.

The ethnic and regional tensions also complicate policymaking, putting security

concerns at the center of all successive governments’ policymaking. The 1960s were

influenced by pre-independence rebellion, with significant efforts allocated to peace

building and security. A considerable share of state resources was imputed to security

1 See Solow (1956, 1957).


expenses. Only with the end of the rebellion beginning in the 1970s could the country

really start putting in place its industrial development infrastructures. Public institutions

were designed through a consolidation of the British and French cultures of public

administration with a tension between a strong central government and a balance between

central and lower levels of governments. This also carries over to the legal framework

that borrows from the French civil code and the British common law to produce a hybrid

system that at times has led to different interpretations of the law, hence increasing

uncertainty facing investors.

Although the country has not experienced open conflict, peace building has been a

permanent concern of the government and has led to some economically inefficient

decisions in the interest of peace. This has not stimulated economic growth.

At least four regional groups need to be taken into account in major policy

decisions: the North, the Centre and South, the West, and the English speaking provinces

(North-West and South West). Religion also plays a role. The country is almost equally

divided between the Christians, Muslims and African traditional believers; with Muslims

primarily in the North of the country. Social cohesion obtained through specific

management of the linguistic, geographic and religious entities has driven policymaking

by all governments.

Under each government politicians have exploited these differences to their

advantage, to the point that rent seeking dominates business behaviour (Yates 1996),

particularly in recent periods. As such Cameroon shares the characteristics of resource-

rich countries (Wunder 2005). This is compounded by the possibility of agricultural

revenues compensating the fall in government revenues due to shocks in the price of


natural resources that has introduced lesser variability in overall government revenues.

From 1986-2003, while cocoa and coffee prices were dropping there was an oil and wood

boom that compensated for the loss from agricultural products.

Since independence successive governments have primarily relied on the

relatively rich economic set of opportunities to entertain social cohesion through

redistributive policies. Lack of sound governance structure has turned good intentioned

redistributive policies into rent seeking and corruption. No sustainable long-term

economic strategy was ever developed. The rich resource base and the carefully designed

macroeconomic institutions turned out to retard growth instead of setting the country on a

sound economic growth path.

Post independence economic growth performance in Cameroon is therefore based

on the combination of a resource-rich nature and the social and institution characteristics.

The objective of this paper is to disentangle the process stimulated by the natural

resources on the period 1960-2000, in order to understand the contribution to the growth

process of each of these different components. The rest of the paper is organized as

follow. We first present the main resource-rich characteristics of the economy, and then

analyze the patterns and economic determinants of growth before assessing the role of

social and institutional variables. The final section concludes with lessons for future

economic policy


2. Natural resources and economic performance in Cameroon

Economic performance in the post independence period was driven by the diversified

source of foreign reserves including natural resource and agricultural products. These

sources of foreign reserves are analyzed before we consider their macroeconomic

implications on the overall economy.

2.1 Analysis of data

Time-series annual data for the period 1960-2001 are used for the analysis. The data are

from the Food and Agriculture Organization (FAO), International Financial Statistics

(IFS) released by the International Monetary Fund, World Development Indicators

(WDI) released by World Bank, and OPEC Annual Statistical Bulletin are described

more completely in the appendix.

The analysis is on three sub-periods: 1961-1977; 1978-1985 and 1986-2001.2

During the first phase, the government’s priority was peace building following the pre-

independence rebellion by the Union des Populations du Cameroun (UPC) and the early

1960’s subversion of State security. This period was also characterized by early

2 The breakdown adopted here is dictated by the focus on political economy aspects. There is however

some overlaps with the breakdown followed in other studies. For example, Kobou et al. (2003) use a four

category periodization: (a) the organization phase of productive structures, from 1960 to 1975; (b) the

phase of sustainable growth, from 1976 to 1985; (c) the phase of the economic crisis, from 1986 to 1994;

and (d) the phase of return to growth, from 1995. Ghura (1997) in his study covering the 1963-96 period

also had four categories: (a) pre-oil 1963-77; (b) oil boom 1978-86, (c) recession 1987-93, and (d) post

devaluation 1994-96.


industrialization based on import substitution. The second phase started with oil

production and export in 1978. Two social and political events during this period are

important: the constitutional change of political leadership in 1982, and the political

leadership struggle that led to social tension and a failed military coup in 1984. This

period was marked by major industrial and agro-industrial projects. The third phase, from

1986 to 2001, was characterized by a combination of social tension in the post 1984-coup

period, the introduction of press freedom and multi-party politics in 1990, and the

devaluation of the national currency in 1994.

Cameroon has an area of 475,000 km square. Table 1 shows that agricultural area

represents on average 19% of total area use. The forest area is constant over time, and

represents 77 % of total area use. These results can be explained by the fact that rapid

urbanization due to the oil boom is good for the conservation of the forest (Wunder and

Sunderlin 2004). There is a small evolution of the area used for permanent cultures in the

three sub-periods: 1.38% in 1961-1977, 2.37% in 1978-1985 and 2.62% in 1986-2001.

****Table 1 near here ****

For a commodity-exporting country like Cameroon, movements in the terms of

trade are key determinants of economic performances. We define the terms of trade as the

ratio of imports prices to the prices of its exported goods. As depicted in Figure 13 the

evolution of the terms of trade of Cameroon is very irregular. These are largely caused by

the different shocks that affected the country especially the variations in international

prices of primary agricultural and mineral products, the Dollar to French Franc exchange

3 All the figures and tables of the text are placed in the annex at the end of the document.


rate. Three phases transpire from the trend in the prices of agricultural crops: (1) sudden

fall in the prices between 1977 and 1978, (2) high volatility with a downward trend

between 1989 and 1992 and (3) price increases between 1992 and 1994. These phases are

more pronounced for coffee than cocoa. The price of coffee fell by 40% between 1976

and 1978, while the fall in cocoa's price was only 10%. Between 1992 and 1994 the price

of coffee increased by 120% while that of cocoa increased by only 25%. The first

negative shock spans the late 1970s and 1980s. Overall we have five shocks on mineral

prices: (1) a negative shock in 1979, (2) a positive shock between 1980 and 1986, (3) a

positive shock between 1987 and 1990, (4) a second negative shock between 1991 and

1993, and (5) a third positive shock in 1994.4 In this paper, we focus on the following

shocks: the beginning of oil exports in 1978; the fall of oil prices in 1991; and the

devaluation in 1994.

***Figure 1 near here***

As Table 2 illustrates, exports of major agricultural commodities (coffee and

cocoa) increased from the period 1961-1977 to the period 1978-1985. After the beginning

of the oil exploitation, exports of coffee and cocoa fell drastically to respectively USD

133 and USD 138 millions in 1986-2003 from respectively 161 and 229 in 1961-1977.

Exports of wood, cotton and rubber increased in all the sub-periods, even after the

beginning of oil exports. These products have not been affected by oil exports, unlike

coffee and cocoa. During 1961-1977, the total value of commodities exports was USD

4 See also Collier and Gunning (2005), and Cashin and Pattillo (2000) for different shocks that affected

African countries terms of trade.


187 millions and jumped in 1978-1985 to 1288 due to oil exports and reaching USD 1538

millions in 1986-2003.

****Table 2 near here***

In Figures 2 and 3 we compare the share of all export commodities with the share

of oil exports in GDP. Figure 2 shows that between 1961 and 1978 exports of cocoa and

coffee fluctuated around 5% of GDP. But after the beginning of oil exports in 1978,

there was a significant fall in the exports of these commodities. Even the currency

devaluation in 1994 did not improve the export performance of these commodities. From

the same graph, wood exports grow slowly until 1974 and fall between 1975 and 1987

whereas oil exports increase. Wunder and Sunderlin (2004) argue that oil wealth was not

large enough to reverse forest loss and cause forest area to expand. But after 1989, the

wood exports begin to increase and reach a peak in 1994, the year of currency

devaluation.

***Figure 2 and 3 near here***

The exploitation of oil and other natural resources has social and economic

consequences. As shown in Table 3, urban and non agriculture population increased

rapidly after the discovery of oil whereas rural and agricultural population decreased. The

urban population was 20.41% in 1961-1976, 32.71% in 1978-1985 and 44.19% in 1986 –

2001. The non agriculture population was 19.86% in 1961-1976, 32.81% in 1978-1985


and 41.68% in 1986 –2001. The agricultural and rural populations fall respectively from

80.14% and 79.59% to 67.19% and 67.29% in 1978-1985, and to 58.32% and 55.81% in

1986-2001. The rural-urban migration was caused by rising public sector employment

and increase in urban construction (Devarajan 1999; Benjamin et al 1989). The

macroeconomics effects are presented in the next sub-section.

***Table 3 near here****

2.2 Macroeconomic implications of natural resources: explicit and implicit Dutch

Disease5

In this sub-section, we analyse the effect of oil boom and other resources (e.g. wood) on

income, consumption, saving, investment, and government expenditures. There are two

complementary hypotheses about how prices behave in the presence of a windfall

(Devarajan 1999). One is in case of “Dutch Disease” whereby the price of non-tradables

is expected to rise relative to that of tradables. The second hypothesis is that the price of

non-tradable capital goods rises relative to the price of non-tradable consumer goods. In

the case of Cameroon with many natural resources, we distinguish the case of an explicit

“Dutch Disease” (oil windfall) and an implicit “Dutch Disease” (exports of other

resources like wood when the price of oil declines).

The macroeconomic analysis of Cameroon offers a good opportunity to study the

link between external economic changes and forests. We know that oil economies often

fluctuate due to heavy reliance on a single export commodity with an unstable world

5 See Corden and Neary (1982), and Corden ( 1984).


market price. Wunder and Sunderlin (2004) assume that “on average oil- and mineral-

exporting tropical countries have more forest left and lose them at a slower rate than non

mineral-exporting countries”. In the case of Cameroon, the forest area remains constant

over time.

As illustrated in Figure 2, the exports of wood decrease in oil boom period and

increase in a crisis period. This means that the government uses the revenues of wood

exports during the crisis to offset the loss of oil revenues. For this reason we say that the

wood exports can be an implicit “Dutch Disease”.

Economic growth in Cameroon has been irregular from 1960-2000, and this can

be seen both at the overall macroeconomic level and at the sectoral level. Table 4 and

Figure 4 show that during the first phase, from 1960 to 1977, the economy grew at an

annual average rate of 4.6%. This period was also characterized by early industrialization

based on import substitution. The end of this period coincided with the beginning of oil

exploitation and exports. This period fits with a soft control classification.6

The second phase starts with oil production and exports in 1978, and is followed by

exceptional growth. The economy grew by 6.9%. Investment, consumption, and saving

shares in the GDP increased, and government expenditures decreased in this period (see

Table 5 and Figure 5). GDP per capita reaches a peak of US$ 900 in 1985 (Figure 4).

***Table 4, Table 5, Figure 4, and Figure 5 near here

6 Within this frame, cooperative unions were created, and they played a role in supervising and guiding

farmers: encouraging them to increase production either by distributing inputs to them at subsidised rates,

or by providing them with modern techniques of production.


The peace dividend of the first period, combined with favourable exchange rates

and other macroeconomic policies stimulated this growth process. However, oil

mismanagement could be considered one of the main reasons for the decline in growth

observed during the 1980s. The mid 1980s was inconsistent with sustainable growth. The

period was marked by major industrial and agro-industrial projects. The state massively

subsidized various economic sectors by prioritizing the industrial sector.

When Cameroon formally announced the discovery and exploitation of important

oil wells, the government decided to avoid the Dutch Disease by ensuring that the focus

of economic operators was kept on the pursuit of the green revolution. This was done by

removing oil revenues from the normal budget process and creating a special account

managed directly by the Presidency.

The 1986-2001 period was characterized by a combination of social tension in the

post 1984-coup period, the introduction of press freedom and multi-party politics in 1990.

These social events, combined with appreciating exchange rate and other external shocks

(e.g., the fluctuations of international price of primary agricultural and mineral products),

led to unprecedented growth collapse. Economic growth was reignited with exchange rate

adjustments and the reform of trade and fiscal policy in 1994. This period had a

combination of near state break-down (at the beginning of the period) but thereafter-soft

control. Although the devaluation facilitated positive growth rates, because of ill-

functioning institutions (partly materialized by corruption rankings) the country has not

been able to generate the level of growth that could also reduce poverty.

During this period, GDP grew at 0.53%. The growth decline could be attributed to

a generalized fall in cash crop prices, which also generated a fall in the purchasing power


of farmers and was accompanied by an increase in the costs of their production. Farmers

invested more in food crops, to the extent that agricultural inputs for cash crops were

diverted to food crops, which had become more profitable (Douya 1995). The growth

decline was also due to the failure of the macroeconomic institutions set up around the

CFA agreements to provide for long-term sustainable growth and development. The

intensification of the restructuring of the production machinery and the change in the

monetary parity occurred in 1994.7 The combined effect of devaluation and of an

enabling8 international environment thanks to the rise in cash crop prices contributed to

growth. The economy, particularly the industrial sector, experienced very difficult times,

partly because of State involvement and exposure to external shocks. The industrial

sector was the hardest hit by the adjustment program introduced.9

From the late 1980s, because of resistance to pro-democracy movements,

protracted civil disobedience paralyzed the country with the most virulent being the

“Ghost Towns” that lasted eight months in 1990. The economic and social loss was

significant. Security concerns became even more important. Political and social forces

had an overall ethnic and linguistic configuration. By the 1992 Presidential election, three

main political groups stood out: the English speaking Cameroon and the Bamileke

dominated provinces were primarily members of the Social Democratic Front (SDF), the

North comprised primarily of late President Ahidjo’s loyalists, while the Center, South

and Eastern Provinces were primarily in favour of the ruling party. These could further be

7 On 12 January 1994, the CFA franc was devalued by 50% in terms of the French Franc (FF).

8 The international context was particularly favourable for crops like bananas, timber and cotton.

9 With regard to liberalization in particular, the program exposed the poor competitiveness of the sector,

which had survived before then thanks to diverse protective measures and massive subventions.


categorized into two main groups with the “Anglo-Bami” representing an alliance of

Anglophones and the Bamileke business interests. This coalition was seen as a possible

combination of economic and political domination that could conquer the country from

the Biya and Ahidjo loyalists who in certain circles were believed to have the exclusive

right to rule.

An important question is whether the economy is characterized by a reallocation

of factors of production from low productivity sectors (traditional sectors) to high

productivity sectors (modern sectors), equalising marginal productivity of labour between

sectors. The ratio of labour productivity in non-agricultural sectors to labour productivity

in the agricultural sector is 6.8 throughout the entire period, showing that labour

productivity is thus relatively poor in agriculture. This suggests that the role of

agriculture in the economy partially depends on the quantitative nature of the manpower

employed. In summary, the growth process in Cameroon has not influenced a reallocation

of production factors from low productivity to high productivity sectors.

The Chenery-Syrquin model (1986) underestimates the agricultural GDP share of

Cameroon; it perfectly estimates the GDP of the industrial sector and overestimates the

GDP share in services. This suggests that the decline in the share of the agricultural

sector essentially benefits the service sector. These disparities, however, cannot be

interpreted as a manifestation of the relative performance of the Cameroonian agricultural

sector as compared to the tertiary sector. These results are confirmed by Devarajan

(1999) who shows that the traditional tradable sector’s (agriculture) share in GDP

declined quite substantially during the 1978-1985 period, while construction and services

gained ground.


A summary comparison of the three main sectors suggests that the service sector

has dominated over the entire study period. Hence agriculture, in spite of being the

driving force of the economy, is not the dominant component. Services here are taken at

their primary level that is, with little value added. There are disconnections between

industry and services confirming the low level of integration at least of these two sectors

which is also an indicator of the structural weakness of the Cameroonian economy. The

share of industry increased considerably between 1976 and 1982, probably reflecting “the

oil effect". The scissors-like movement between 1982 and 1991 seems to mark the

passage from agriculture to industry, which lasted only for a short time. Whatever the

case, this movement remains artificial as observed in Figure 6. For a long time industry

received substantial support, probably to the disadvantage of the agricultural sector. Such

supports and oil revenue seem to have restricted the structural transformations of this

sector, as well as the possibility for the sector to make a significant contribution to long-

term development.


For Devarajan (1999), the Dutch Disease and construction boom are both

associated with windfalls in Cameroon. The Dutch Disease was milder than observed in

other countries because a sizeable portion of windfall was saved abroad. Similarly, the

construction boom did not translate into a sharp rise in non-tradable capital goods prices

vis-à-vis consumer goods prices because import prices were rising rapidly at the same


time. Finally, the path of the construction boom was such that construction accelerated

and then slowed, while imports of capital goods started slowly and then speeded-up.

Studying Cameroon, Benjamin et al (1989) provide another explanation for the

expansion of the manufacturing sector by relaxing the assumption of perfect

substitutability between domestically produced and imported manufactured goods. Their

modification in the basic model renders domestic manufactured goods semi-traded. The

increased national income expands domestic manufactured output by raising its relative

price (profitability).

3. Economic elements of growth performance

Economic explanations of growth performance focus on macroeconomic and

microeconomic determinants of growth.

3.1 Macroeconomic determinants of growth

The analysis of factors that influence economic growth in Cameroon relies on two

methodological approaches: growth accounting (Solow 1957; Denison 1967) and

regression analysis. With growth accounting, we focus on the identification of the

origins of economic growth, by examining what growth can be attributed to

accumulation variables (physical and human capital) and to global productivity of

factors.10 The results obtained by applying this methodology (see Table 6) show that

10 This is an important indication of the nature of the growth process in the economy. It allows for

understanding the role-played in the process by all the elements other than the labour and capital factors (it


during the last four decades economic growth in Cameroon was fundamentally driven by

primary factors of production. Thus, for an annual average growth rate of 1.16% of GDP

per capita, the capital ratio registered an annual average growth rate of 1.6% as against

0.29% for human ratio. These results are similar to Amin (2002) who shows that capital

input has been more important than labour input in terms of contribution to economic

growth during the period 1961-1998. The annual average growth rate of the global

productivity of factors is negative, standing at -0.74%. This suggests that the global

productivity of factors exerted on average an unfavorable impact on growth during the

whole period, and it is probably why this economy is still relatively lethargic.

***Table 6 near here***

This global picture, however, conceals the contrasts that appear within the

various sub-periods of the study. In fact, during the first two periods, from 1960 to 1985,

the capital and human ratios contributed 2/3 of the GDP growth per capita; global

productivity of factors contributing the remaining one third. Here, the mobilization of

factors in the process of growth can be linked to the deliberate action of policymakers

whose goal was to provide Cameroon with appropriate infrastructure and production

units that would fit into a large-scale industrialization process. The last period presents a

different picture from the preceding two. Between 1986 and 2000, the capital and labour

ratios increased at an average annual rate of 1.28% but the rate remained low compared

to that previously recorded. The restructuring of the entire economy could explain this

situation. The global productivity of factors weighed heavily on the growth process since

gives us the possibility of measuring the combined weight of institutional and sociological variables).


it evolved at an average annual rate of -3.86% during the period. We should however be

careful with this figure, which, within a context of structural adjustment, can translate all

the new forms of rationalization of the production process, the implementation of which

conditions the return to growth started since 1995. Growth accounting, despite the

possibility it offers for an explanation of growth, is not fully satisfactory because it does

not make it possible to measure the intensity of the relationships between per capita

GDP and others macroeconomics aggregates. We have combined this with a regression

model to give a full picture.

To define the influence of a number of variables on economic growth in

Cameroon, we have analyzed the role played by the macroeconomic framework, then

investment and human capital. In previous empirical studies on Cameroon economic

growth, Amin (2002) shows that the capital and labour inputs are the main factors that

influence economic growth in Cameroon. Mbaku (1993), and Most and Van Den Berg

(1996) show that domestic saving has a stronger impact on economic growth in

Cameroon than foreign aid. Ghura (1997) finds that private investment and government

investment have positive and significant effects on economic growth during the period

1963-1996.

In this paper, we will focus on the variables of “new” growth theories (see e.g.,

Easterly et al 1991; Renelt 1991; Levine and Renelt 1992). The growth rate of the GDP

per capita in Cameroon stood at 1.37 points below the world average over the whole

period. Over the same period, key macroeconomic variables including inflation (inf),11

the black market premium (bmpl), unproductive government expenditure (gxbx),

together reduce the growth rate by 0.16 point as compared to the average (see Table 7).

11 Table 4 and Figure 2.7 describe the evolution of the inflation rate.


The contribution of inflation is slightly positive (0.04), and the same holds for the black

market premium, which shows a relatively more substantial contribution (0.14). The

differences in the variation of Cameroon’s GDP per capita over the sub-periods are

compatible with the overall evolution of Cameroon’s per capita GDP. But it is important

to highlight the relative importance of each of the variables. Though the inflation rate did

not drop during the 1990s, it is astonishing to note that its contribution did not vary

considerably during the various sub-periods. Besides, it was during the 1976-1985

period that its effect on deviation was weak, which confirms some sort of laxity in the

implementation of fiscal policy. The black market premium had a positive contribution

over the whole period, and remained unchanged. The effect of all transactions outside

the financial market displays all the rigidities inherent in this market. In spite of the

restructuring of the whole economy, this phenomenon is still very important.

Government’s unproductive expenditure contributes -0.34 point to the growth rate

deviation. In other words, this expenditure plays a large role in the reduction of growth

imputable to economic policy variables: their evolution in time is synchronous with the

evolution of the contribution of economic policy variables to the deviation of the growth

rate.

***Figure 7 and Table 7 near here***

It was during the 1978-1985 period that Cameroon’s per capita GDP came closest

to the average. In this period, the ratio of investment at international prices to investment

at national prices in the GDP dropped from 0.44 between 1960 and 1977 to 0.41 between


1978 and 1985; this drop seems to confirm the relatively attractive character of

investment over the period. This is not surprising looking at the investment code put in

place, which made it possible to clear certain obstacles to foreign investment. The

slackening noticed afterwards in the deviation of per capita GDP is imputable to the

economic crisis, which set in with a combination of several macroeconomic aggregates

that deteriorated. In particular the drop in investment from 27% in 1985 to less than 11%

in 1993 had a negative impact on growth. Similarly, the share of public investment in

total investments, which represented more than 50% over the preceding periods, dropped

considerably to about 20% during the last period.

The effect of human capital on the growth rate per capita was -0.08 point of the

average during the period under review, but also improved with time. From an average

reduction of 0.13 point between 1960 and 1977, it stood at 0.08 between 1978 and 1985

and at around 0.01 during the third period. It would be difficult to disassociate this

evolution from that of the educational level, which improved in Cameroon during the

same time interval.12

3.2 Microeconomic determinants of growth

We consider two microeconomic growth determinants: the functioning of markets and

the behaviour of households and firms.

12 In fact, the average number of school years for the population of 15 years and above having gone to

secondary school rose from 1.8 year to 2.3 years during the first two periods; it stood at 2.7 years during the

last period.


Operation of various markets.

In Cameroon, markets do not operate properly as a result of numerous government

interventions, which constitute the main source of inefficiency in the goods and services

markets.

Looking first at the product markets, government intervention in agriculture was

relatively high during the first three decades after independence. In this period the

government fixed producer prices for basic products, regulated markets and decided on

distribution and profit margins. An export tax levied on most agricultural products and a

number of import-substitutes were subjected to import duties. For cocoa, coffee and

cotton, prices were fixed each year by presidential decree, on the recommendations of the

National Produce Marketing Board (NPMB). In the cocoa and coffee sectors, the NPMB

established a scale that fixed margins at each stage of the marketing process.13

In this way, the NPMB by securing a stable price for producers and exporters bore

all the risks involved in price fluctuations on world markets.14 However, the pricing

system heavily taxed farmers. The assessment base for cocoa ranged from 24% to 76%

between 1970 and 1985, and from 35% to 76% for coffee during the same period.

Between the 1970s and the first half of the 1990s, the average price of cash crops, on the

13 This scale is used in measuring the “equilibrium price,” which then serves to determine the deductions to

be made on agricultural products. Conversely, whenever world prices exceeded the equilibrium price, the

NPMB levied a tax on exporters equal to that difference. Also, whenever world prices fell below the

equilibrium price, the NPMB subsidized exporters by drawing from the stabilization fund set up during the

years of plenty.

14 There is no set scale for cotton, because the monopoly of SODECOTON over export guaranteed that

cotton costs were deducted from the export price.


international market, stood at 618.6 FCFA, 698.1 FCFA and 885.4 FCFA per kilogram,

respectively for cocoa, Robusta coffee and Arabica coffee (see Table 8). The farm prices

for the same products and in the same order stood at an average of 285.3 FCFA, 288.4

FCFA and 323.4 FCFA respectively. Though this difference represents 17% of market

prices for cocoa, it is very high for Arabica coffee, representing 74%. Only a small

portion of the international price was passed on to the farmer.


Such practices as a whole were ineffective, and did not permit producers to make

any profit whatsoever. In stabilizing its prices at a low level, Cameroon encouraged

farmers to invest less in the production of export commodities compared, for example, to

the Ivory Coast where production tripled over the same period thanks to the practice of

high producer prices (World Bank 1989). Price stabilization is often considered as a

mechanism that helps to protect producers against the fluctuations of an unstable market.

Actually, in the context of Cameroon, this mechanism prevented them from making

profits during the price increases. Whenever prices dropped the stabilization of producer

prices at a fixed and relatively high level eliminated the signal that would have been sent

by the price drop to growers, spurring them to reduce production of those crops affected

and raising the production of other crops whose prices increased.15

15 Between 1981/82 and 1985/86, the running costs of the NPMB increased by 300% while export

commodities stagnated at 200 000 tons, a sign of the magnitude of the dent made by State structures on

farmers, and consequently the high degree of disillusionment.


These interventions and associated inefficiencies apply equally to the labour

market, which did not undergo any significant changes beginning in the 1960s. This

means that it is still characterized by rigidities: significant structural and institutional

rigidities prevail and constrain the growth process (Kobou 1993). In fact the origins of

the rigid view of African labour markets can be traced to concern regarding institutional

wage determination that, it is suggested, derives from the influence of powerful trade

unions and post-colonial progressive government labour regulations (Lindauer and

Roemer 1994).

Institutional rigidities in the labour market include codification of the salary scale

and linking wages to the educational level attained in the conventional training system.16

But as in other Sub-Sahara African countries, the labour movement has not been

particularly strong in Cameroon and, while the country has had two labour regulation

codes, they have typically not been uniformly complied with or actively enforced. Access

to employment is one of the major components of these norms. Employment

opportunities are concentrated in the public sector and informal activities, with a poor

regional and sector-specific allocation.

Behaviour of various agents

The main microeconomic agents considered are firms and households. In Africa firms

and households face a very risky environment, partly from natural causes (climate) and

commodity prices, and partly from the difficulty of enforcing contracts (Collier and

Gunning 1999b).

16 This is the situation that prevailed prior to the 1992 Labour Code reform.


From an agricultural perspective, Cameroon is characterized by a regional

diversity dominated by small size farming. About 1.1 million small-scale farmers

operated on an average of 1.8 hectares; at least 70% of cultivated land has less than 2

hectares occupying 40% of the land; close to 10% of farmed areas are located on 5% of

farms of more than 5 hectares (World Bank 1989). These traditional farms contributed to

90% of agricultural production, and in parallel to the traditional sector, there exists a

modern agricultural sector run by the State and by the private sector. This structure of

production and the environment affect farmers, and the manner in which they react

include the survival strategy, the withdrawal strategy, the risk reduction strategy, the

extensive accumulation strategy and the intensification strategy (Herbel, Bamou and

Mkouonga 2002). The survival strategy was conceived by producers faced by an absolute

precarious situation. A large majority of farms in Cameroon are primitive and

undercapitalized to ensure their survival. In such cases, producers do not use inputs.

Thus, there is over-exploitation of the ecosystem and consequently a fall in their

production capacity. The withdrawal strategy is practiced by farmers who earlier on

raised capital from cash crops like cocoa, coffee and cotton, but who are now vulnerable

to the collapse in the prices of these crops. Because of insufficient income to sustain and

revive their plantations, they then adopted this strategy, which is mostly practiced by

older farmers who are pushed to decrease their production by dwindling family size.17

Well-endowed farmers, having land, implemented the risk reduction strategy and capital

and well versed with market forces.

17 In case it exists, this population may be mobilised in substitution activities likely to compensate for their

diminishing income.


Thus, given their limited ability to absorb risk, farmers diversified. For example

cocoa and coffee growers combined their usual activities with other crops. Most

agricultural households of the Center and Western provinces implemented this strategy,

where mixed farming of cash crops and food crops (cereals and tubers) was already being

practiced. The same was true in the Northern provinces for millet production and cotton

supply (Douya 2001).18 This pattern of diversification is different from the shift in

modern agriculture worldwide towards large, capital intensive farms. Farmers forced by

scarcity of labor on large farmlands apply the extensive accumulation strategy. These

prevail primarily in regions of low population density. The intensification strategy is

common in a situation where there is abundant labor and demographic pressure (the West

or certain areas of the Center). Here, intensive farming can take the form of monoculture

or diversification of crops.19

In manufacturing activities, the environment has influenced the production

process, dominated by low productivity. In particular, legislation remained quite

restrictive until the end of the 1980s. Firms were highly protected, and this weakened

their internal and external competitiveness. Thus Collier and Gunning (1999a) argue that

trade liberalization is a necessary but not sufficient reform to make African manufacture

competitive. The level of protection is estimated to be over 75% and this penalized export

sectors (Milner 1990). This protection was provided through special regimes. In effect, in

Cameroon by 1993 firms enjoying one or more special tax regimes accounted for 99

18 An acceptable explanation is that farmers seek to diversify their sources of income; in this case, millet is

destined for the market rather than for self-consumption.

19 The case of small-scale farmers of Robusta coffee and cocoa producing areas, who diversify their sources

of revenue by creating palm oil plantations, is worth noting.


percents of total sales. The grant of licenses, and fiscal and customs procedures often

necessitated payments, which added to already high transactions costs (Tybout et al

1996). If we add those problems to rent seeking (see section 4.1), we obtain an overall

hostile business environment. It is useful to distinguish between two types of firms: small

businesses and large firms. The challenges facing the small firms are the result of interest

groups dynamics.

The small firms struggle for survival and growth; most of them never reach the

minimum size required and remain in the informal sector. They operate in a rather hostile

environment facing such barriers to entry and growth as credit and insurance market

imperfections, rent seeking by private rackets, predatory regulation and taxation by

government officials. They also face high risks that cannot be insured by the informal

insurance markets since the latter are usually locally-based, and therefore cannot

diversify against region-wide risks. The problem is aggravated by infrastructures that

keep small businesses very specialized and therefore highly vulnerable to risk. Predatory

regulation is also an important barrier. Given that small businesses are dispersed and

weak politically, public policy is more supportive of large firms. The surviving

businesses do not enjoy their monopoly power since the rents are taxed away in bribes.

Rent seeking distorts the incentives for adoption of new technologies and compromises

the growth process.

Large firms are predominantly foreign or state owned, operate with a relatively

large capital base and have access to national and international production and

distribution networks. Their main concern is the ability to restructure in response to

changing external conditions. Existing credit markets have primarily targeted large firms.


At times loans obtained through the informal credit markets and the institutions of micro

credit meet most of the needs of small firms. The family networks are relatively extensive

and often include the family members working abroad. The firm size that can be

supported by such a scheme is low and as such the level of activity to pull Cameroon into

the group of fast growing economies is not reached.

We shall now focus on socio-institutional aspects, which also condition the

economic growth process in Cameroon over the period under study.

4. Social and institutional elements of growth performance

The political economy literature studies the role of collective action processes in resource

allocation and rent distribution. The main concern in our study is the extent to which the

collective action process hinders or promotes growth. Therefore, our focus is on the

collective actions of ethnic-based interest groups or policymaking institutions, and

whether the incentives of economic agents are to invest and to improve productivity in

the long run. Attention will be paid to the role of institutions, and how they hinder or

deter growth-promoting policies. In effect, a commitment agreement that constrains the

policymaker and avoids time-inconsistency is, in theory, available within the CFA zone

Accords. These accords incorporate the main elements for ensuring fiscal and monetary

discipline.20

Two points, namely the social and institutional aspects of growth performances,

will be analyzed.

20 See Allechi and Niamkey (1994); Devarajan and de Melo (1987); and Guillaumont et al (1988) for the

costs and benefits of participating in CFA monetary unions.


4.1 Social aspects of growth performance

In Cameroon, social aspects of growth are related to the desire of ethnic and other social

coalitions to divert resources toward their private interests. In this way, we focus on: (i)

the role of interest groups and coalition building and (ii) the management of regional

equilibrium.

Interest groups, rent seeking and coalition building

To analyze these issues we use the framework of Castanheira and Esfahani (2003), who

identify three groups of agents (the public, lobbying groups and politicians) and three

broad elements that influence their incentives and interactions. These include the sources

of rents, the heterogeneity of interests across socio-economic groups and the institutional

structure within which they interact. This framework can be best illustrated by the

following example, assuming an economy in which the government seeks to allocate a

rent (R) to two groups X and Y.21 Each group is made up of homogeneous, risk neutral ;

groups X and Y comprise respectively n and m members (with n < m). The two groups

will compete in a two-stage game to appropriate the rent R held by the government. In

the first round, both groups determine the probability of obtaining the public good. In this

round, each member of each group is fighting to appropriate the rent for his group, and

the rent seeking effort depends on the value of R and on the number of persons in each

group. As the larger of the two groups gets bigger, the small group spends less on rent

seeking. In the second round of the game, members of the group now compete to

21 See Katz and Tokatlidu (1996) and their analysis of group competition for rents.


appropriate the now private but indivisible good won by the group. The member of the

group that wins keeps all the rent. This group competition for rents in which the winner-

takes-all principle holds fits the political game played in the name of the tribe in

Cameroon (Nitzan 1994).22

In such a game, the asymmetry in group size tends to reduce the waste in rent

seeking. As a matter of fact, the efforts for rent-seeking increases with the size of group

X, and it reaches its maximum when n>m and then decreases as n continues to increase.

The uncertainty on the rent can also limit the effort on rent seeking (Nitzan 1991; 1994).

When groups are risk averse, the waste in rent is relatively limited compared to a case

with risk neutrality (Nitzan 1991; 1994).

Lobbies and interest groups who influence public choices especially characterize

the group structure political economy in Cameroon. The pattern has changed the focus

from Ahidjo to Biya, but overall almost the same tactics have been used. For Bayart

(1985) the whole group dynamic today can be considered as a “process of reciprocal

assimilation and fusion of dominant groups, old and new elites born from colonization

and de-colonization”. Hegemonic alliances have emerged through the multi-ethnic

coalitions that gave birth to the country’s public service, which still serves as its base in

the post independence period. Such coalitions became the framework for redistribution of

rents. Peace and security were also an important policy objective given that a rebellion

started prior to independence, paralyzing a major part of the territory. The first president

“voluntarily” decided to retire in 1982. After serious disagreement with his successor,

22 When in each group there is a mix rent redistributive rule to members, a proportion of the rent could be

distributed on egalitarian basis with the rest allocated according to each member’s relative efforts (Nitzan

1991; 1994).


Paul Biya, loyalists of the first president, primarily (but not exclusively) from his regional

and ethnic base attempted a coup in April 1984. The failed coup provoked a change in

Paul Biya’s approach to government, which increased the need to build an ethnically

based political alliance. His original political message of moralization of public life,

equity, honesty and professionalism in public service was increasingly downplayed.

Such a framework, depending on the period, either has a positive or a negative

impact on economic growth in Cameroon. A public choice framework can help

understand the political economy of the growth outcomes obtained in the country.

According to McGuire and Olson (1996), redistributive democracies predictably tend to

enhance economic performance more effectively than is possible under a stationary

bandit. A policy maker driven by rent extraction is more vulnerable than a democratically

elected one. In order to secure his status against overthrow by competing forces, he is

forced to create a power base. This is done by ensuring support within his preferred

ethnic or tribal group by providing such groups with rents, sometimes in the form of

direct subsidies, but often through complex and costly networks of economic regulation.

He will combine this loyal base with support to groups whose support helps him stay in

power. As a result, he will tolerate rent-seeking outlays by groups that do not constitute

his core support. Recognizing this, outside groups rationally will not seek rents from the

current dictator. To the extent that such anti-establishment rent seeking is effective,

stationary bandits are transformed into roving bandits with potentially harmful

consequences for economic development.

Both Biya and Ahidjo created monopoly by looting the country’s resources.

Ahidjo in five years had subverted pre-independence democracies into autocracies and


consolidated this with policies of overt rent-extraction. Centrifugal forces have threatened

the political viability of the government and have provided ingredients for building

political support that have in turn contributed to reducing the incentives for long-term

development. Ahidjo sought to improve productive capacity in order to raise the stock of

wealth available to support his regime. As such, he limited looting in order to create an

environment in which some economic growth would take place. He created a controlled

economy with minimalist laws designed to protect property rights. These provided the

ingredients of growth, but never created the social infrastructure of public goods

necessary to increase productivity and foster long-term sustainable growth and

development.

Given the pre-independence rebellion, the main objective of the government after

independence was to obtain a consensus on maintaining social order in a situation

characterized by a strong central government co-existing with peripheral and centrifugal

units. Ethnicity, religion or other interest groups could represent such centrifugal units

with significant influence over its members. Mouiche (1997) dubbed this a “fragmented

state”. From this perspective, there was a need to scale down ethnic identities. Ahidjo had

to consolidate central authority by zero-tolerance for any form of demonstrations of

autonomy or ethnic (regional) solidarity. However, the policy of national unity was more

than words as it allowed him to accumulate political capital.

The pre-independence political scene was dominated by many political parties and

associations headed by individuals from Beti tribes in French speaking Cameroon. This

ethnic group also dominated the civil service and as such constituted a real threat to

president Ahidjo’s authority. The latter solved the problem by wooing the Beti parties


and associations into merging with his own party, "Union Camerounaise,"23 appointing

them to administrative or ministerial positions in the government. Ahidjo’s hand picked

successor, a Beti, has kept the hegemony of this tribe in public administration (see Table

9) producing as much as 39.6% of General Managers (GM) or Deputy General Managers

(DGM) in public and state-owned enterprises.24 The number of Beti holding these

positions is twice that of the Bamileke and eight times that of the Northerners, highly

represented in the total population (29.7%), but which hold only 5.4% of positions of

responsibility.


The Bamileke (in the West) in May 1955 initiated a guerilla war against the

colonial powers alongside the Bassa (in the Littoral and Center). Ahidjo first resorted to

force and when this failed he developed a strategy based on assimilation and

manipulation. Because of their business acumen, Ahidjo encouraged the Bamileke to

engage in business activities. As a result, the Bamileke had a dominant position in

23 That is how the one party State came into being and helped monopolize the political scene. This party is

exclusively support machinery for the regime and is a structure to stabilize and consolidate State hegemony

(Sindjoun 2002).

24 The distribution here highlights ethnic lobbies counted since the democratic opening in 1990. The Beti

group is made up of people of the South, East and Center provinces, excluding the Bassa associated with

the Sawa, in the Littoral province; the Bamileke comprise people of the West province to whom the

Bamoun people should be added. The Anglophone group include people of English culture, meaning the

people of the South West and North West provinces, while the Northerners consist of people of the three

Northern provinces, notably the North, Adamawa and Far North Provinces.


business to the point that some suggested that national cohesion would be threatened if

they also had a prominent role on the political scene. Under Ahidjo, unwritten rules

recognized a tripartite distribution of roles: the Beti controlling the public administration

and the State apparatus; the Bamileke running the economy; and the Northerners (the

ethnic group of the Head of State, Ahmadou Ahidjo) controlling political space in

coalition with the Beti in public administration and with Bamileke business interests. For

peaceful cohesion, Ahidjo avoided excessive pressures on village structures of the West.

But in return of not having a bourgeoisie independent of the State, he opted for economic

independence from the world (Bayart 1985) combined with a liberal system behind

closed doors to ensure he controlled everybody; economic development at all cost was

not the overarching objective. The relatively good economic performance in our first

period is partially related to this three-way “distribution”, which is thought to have had a

neutralizing effect on the centrifugal forces. This in turn had a positive impact on growth.

When Biya came to power in 1982, the status quo left by Ahidjo was maintained

for some time. Although Biya entered with the declared intention of opening up, the same

centrifugal forces have produced a regime not significantly different from Ahidjo’s.

Biya’s regime would more fit that of roving bandit in an environment of anarchy. For

McGuire and Olson (1996) the roving bandit does not exhibit a stable and encompassing

interest in the domain over which he rules and there is little incentive to invest in

improving future productive capacity. The main difference between the two regimes is

that Ahidjo did have a set of policies for wealth accumulation and redistribution; whereas

Biya’s regime had no apparent long-term planning.


Meanwhile, through incremental but important changes, Biya modified the power

structure in favor of his ethnic group. The consequence of this transformation has serious

consequences on growth. Ahidjo had retired (some say temporarily)25 from administrative

control of the country but remained the Chair of the party. His sympathizers staged a

military coup in April 1984 that failed. The failed coup pushed Biya to steadily retreat

from the public sphere and other interests groups, resorting heavily to an ethnic identity

under the pressure of his clansmen, who believed it was their own time to control the

country’s resources. The power reallocation meant taking away from the Northerners

some of the control of the public administration while the grip of the Bamilekes on the

economy was a source of worry. The worry of the Beti was also motivated by the fact

that the Bamileke had also become the dominant group in higher education and

candidates to public service jobs. The previous structure used by Ahidjo to control the

centrifugal forces became increasingly loose.

Biya used all sorts of tactics including directed credits in commercial banks, and

the ratio of delinquent debt increased. By the time of Ahidjo’s resignation, the insolvent

debt ratio stood at 5.6%, but reached 13.7% in 1985 and 37.7% in 1988 (Tchamanbe

2001).26 In addition, explicit efforts were made to attract foreign non-French interests. In

the early 1990s pressure mounted for political opening. The previous climate carefully

crafted and controlled by Ahidjo had become conflict prone. This affected the efficiency

25 The fact that Ahmadou Ahidjo preserved his control over the single party added more pressure to the

political atmosphere and created doubt on his desire to retire from active political life (Bandolo1986).

26 An examination of the real situation of some banks shows that this category of credits represents at least

62% of credits of banks undergoing liquidation in 1988 including the Cameroon Bank, the Cameroon

Development Bank, Societé Camerounaise de Banque and the Banque de Paris et des Pays Bas.


of public administration. The state also had to freeze hiring and wages in the public

sector. Given the importance of the parastatal sector in the economy, the limited state

resources had spillovers on the rest of the economy. The combination of all these led to a

contraction of the overall economy. This further added to social tension given the

growing unemployment and in turn pushed the economy further into recession.

Management of the equilibrium between regional entities

Ahidjo, who used it to build new power base, initiated the policy of regional balance.

Revenue derived from oil and kept outside the regular budget process was extensively

used for discretionary allocation of major projects and rents. The economy is organized

around liberal principles, but balanced development and social justice also play a role. As

for social justice, it aims at equitably redistributing the fruits of development amongst the

various groups and therefore giving each citizen equal chance within the framework of

national solidarity.27 The doctrine of balanced development in this framework is the idea

that the same attention should be given to the different sectors of economic activity, to

the different regions and towns, and to men and to women. Erected into a norm to

legitimate the State by Ahidjo, this policy would be pursued by his successor, with a few

variations. This is evident from the comparisons of the main characteristics of the various

governments under Ahidjo and Biya.

Regional dimensions in economic and social policies were also considered by the

Ahidjo regime as a useful mechanism of peace and social cohesion that would provide for

long-term economic development. The government constitutes the ideal structure for the

27 It is more a question of distributive justice than commutative justice, which supposes the putting in place

of a set of reforms.


realization of regional balance; this was abused by both regimes. Since the country

experienced sustained growth under Ahidjo, the policy was largely accepted. For good

and bad reasons, it is believed that while this is not a proclaimed public policy, the

second president has used and abused this regional dimension in public policy. One way

is frequent cabinet reshuffles, but also a mechanism for increasingly rewarding his

clansmen and friends. Biya used an average of 40.8 Ministers between 1983 and 2002,

compared to an average of 26.9 between 1960 and 1982; Beti remain dominant (see

Table 10). Though the Sawa were relatively under-represented in the population, they

obtained nine ministerial positions under Ahidjo; this role was tripled under Biya. This

can largely be explained by the fact that the multiparty politics era saw a multitude of

opposition parties in the Littoral province, the region of origin of the Sawa people and

where the main industrial base of the country is located. Simultaneously not much was

done to stimulate economic activities in that region as it was felt that it would primarily

benefit the opposition power base.


All in all, the argument for social cohesion was really a quid pro quo for power

and resource sharing between the ruling elites and representatives of the various interest

groups, not in the interest of economic development but to consolidate political power.

The number of ministerial positions increases even though the Ministers do not fulfill any

specific function. The democratic process initiated at the beginning of the 1990s further

strengthened the link between the title of minister and the ethnic origin of the holder. This


minister speaks for his region of origin, even if his nomination ignores the fact that he or

she does not necessarily incarnate the aspirations of the local population concerned. Thus,

in the absence of legitimacy in a particular region, an individual is propelled into being

the spokesperson of the region. In a system where politics is conceived and lived as a

competition between the various segments of the society for the allocation of national

resources (Moukoko Mbonjo 1993), the distribution of political positions for wielders of

power appears as one of the means of controlling the civil society. Paul Biya resorts to

substantive law, notably Decree 7/9/83, to institute quotas per province in competitive

entrance examinations. Such a policy stance is not without its own problems, including

non-optimal allocation of resources. This is illustrated for example through access to

employment in the public service, where the opacity in terms of information, which

characterizes this process, follows the patrimonial logic (Medart 1991) on which the

Cameroonian State is founded.28 Mostly less qualified jobs are used to facilitate loyalty to

the senior officials of the central administration, and therefore appear as a loyalty support

(Mbembe 1995). Like in other developing countries, the public sector has been the

dominant employer. It has been used to create employment rather to deliver services, and

this reduces productivity. Each minister has thus been able to recruit people from his

village or his ethnic group; in some cases, he has used his influence to make appropriate

positioning through the mediation of networks to which he/she belongs (Kobou 1999).

Cameroon during the 1980s created 30,000 low-skilled jobs, all of which can be

attributed to the policy of redistributing the guaranteed income (Hugon 1999). The

proliferation of unnecessary positions poses the problem of disguised unemployment

28 Also, social institutions (families, friends, clans, tribes) play a major role thereof, which means that those

with the appropriate profile do not always occupy positions.


within the administration and consequently that of efficiency, all constituting an

important impediment to growth.

These practices are also in order in the political system. Especially during the first

three decades after independence, there was strong overlap between the single party and

the State, and osmosis amongst the officials of this party and those of the administration.

Access to resources is even conditioned by membership in one and/or other of these two

spheres. Membership in the ruling party could at times be an important asset for social

status.26 All these practices have annihilated the State’s capacity to anticipate problems,

as it is obliged to manage the economy solely to preserve social peace. Though the quest

for social peace is important to growth, it must be sought rationally so as not to lead to

State malfunctioning, owing to the size of these practices which lead to inertia for the

economy as a whole. In particular, politicking constitutes a dominating factor in the

economy of Cameroon, and the propensity not to consider competence in filling job

vacancies is increasing; rather, the individual’s capacity to mobilize support in a given

region has become the prime factor. This practice serves to perpetrate the reign of the

powers that be. In conclusion, it is worth emphasizing that the various practices were not

the only negative influence on the economy. The role of intervention, which is at the

centre of the various national development policies experimented since independence in

Cameroon, can also help understand the problems faced by growth in the country.

26 The contract between the individual and the party is based on the search of an ideal about which we are

convinced and of which we have strong convictions. It is only a game of calculations at the centre of which

we find mainly material interests.


Considering that management of social cohesion is a constraint that exerts some

influence over Cameroonian growth,29 measuring the influence of the institutional frame

is worthwhile.

4.2 Institutional aspects of growth performance

The institutional framework in the macroeconomic sphere constitutes another constraint

that the authorities had to contend with at the same time as they developed growth

strategies. This is particularly important with respect to monetary and exchange rate

policies and fiscal discipline. The growth-market nexus depends on the existing incentive

structure. The growth financial market nexus comes through savings processes, the

interface between savers and borrowers, and the reallocation of resources when their

current uses are no longer the most profitable. In particular the savers-borrowers interface

is important and depends on the level of development of the banking sector and other

financial intermediaries. The main functions of this interface include the screening of

firms, identification of profitable investment opportunities and monitoring of borrowers.

Another equally important dimension is the possibility of reallocating resources to more

29 The quest for social cohesion has being of major concern to Cameroonian authorities since independence.

Social cohesion has a growth dividend as it leads to political stability, which contributed positively to

growth. The political instability index contributed in taking up Cameroon’s growth that is by 0.15 point (a

little more than the African average contribution which is 0.12 point). Its evolution has relatively differed

with time: after a contribution of 0.13 point shortly after independence, a long period of stability (the ruling

political regime ruled the country with an iron hand reinforcing by that social peace and relative stability

that growth enjoys) set in with a 0.20 point improvement as compared to the average growth rate.


profitable opportunities. Contract enforcement, disclose of business information to

outside investors, and property rights are the main elements of efficient financial markets.

Financial repression

In the immediately post independence years, funds derived from former colonial

institutions were exclusively allotted to business companies, as well as to mining

enterprises owned by foreign financial interests. Deciding that this posed serious

problems for the financing of the economy as a whole, the government deemed necessary

State control of financial activities. The government estimated that in the absence of any

intervention the financial systems were not in a position to provide the necessary support

to the process of industrialization, the implementation of which required the availability

of low cost capital. That is why from the beginning of the 1970s there was excessive

intervention by the State in banks, which is accompanied by a financial repression

characterized by an administered policy of interest rates and a sector-specific orientation

sustained by credits through preferential rates. Concerning the policy of administered

interest rates, the State policy during the 1970s and 1980s consisted in maintaining them

at a very low level. As such, from 1974 to 1988, interest rates were only modified once,

increasing from 4% to 4.5% between these two dates. Likewise, the preferential discount

rates that obtained during this period as a favourable rate applicable to prioritized sectors

were only modified once every three years; the normal discount rates could be changed

only every two years. Control of the different rates obviously has consequences on the

process of growth, since the offering of low or negative interest rates provoked the flight

of financial resources from banking circuits and the country (see Table 4 and Figure 8).


On this last point, a World Bank report (1986) on the Cameroon banking system reveals

that the large rates differential between Cameroon and the international finance scene,

that of Paris in particular, considerably hinders the mobilization and carrying over of

financial savings, such as those of large firms that prefer to invest on foreign financial

markets, where the rates are clearly more profitable.


With regard to credit orientations, the policy adopted by the government is

essentially sector-oriented, characterized by the fixing of global rediscount ceilings for

commercial banks and individual ceilings for enterprises. In this way, through the

rediscount operations mechanism, banks are required to grant some assistance at

preferential rates and assure the funding of priority sectors30 without any consideration of

profits. Such a policy provoked distortions in the allocation of resources and favoured the

increase of unsound lending. Even if these two policies had devastating effects on long-

term growth, they nevertheless had a positive effect on Cameroon’s economic growth,

particularly during 1978-1985. During this period of growth, four new banks were

created31 with a substantial increase of capability to allocate credit in the economy. A

drop in credits allotted to the economy was recorded during the period of economic crisis,

which is explained by the absence of projects worth funding, of course, but also by the

30 Priority sectors were: agriculture, small and medium enterprises (SMEs), public enterprises, small and

medium industries (SMIs), the social habitat, and others.

31 The four banks are: Banque de Paris et des Pays-Bas, Boston Bank Cameroon, Bank of Credit and

Commerce Cameroon, Bank of America.


exhausting of banking resources, with the latter remaining the tributary of public deposits

and foreign transfers, which is undermined by the unfavourable world environment of the

epoch, hence the slowdown in growth. Beyond that, the policy of financial and economic

liberalization initiated on 16 October 1990 was translated by a suppression of

administered interest rates. With the 1994 devaluation, the lending rates of the BEAC

increased to contain inflationary pressures, before dropping rapidly (this rate stood at 14

% in March 1994 and attained 7.75 in December 1994). The borrowing rates of

commercial banks remained very high due to their high operational cost. Reliable

borrowers were discouraged by high interest rates, a fact that undermined the growth

process.

Cameroon continued to influence monetary policy particularly through two

channels: one relating to its relations with the BEAC, the other regarding the funding of

elections. In connection to its relations with the BEAC, the intervention of the State of

Cameroon is translated by the appropriation of the monetary policy governed by the

supervisory authority of the BEAC. Thus, the latter has very little independence in

relation to the government of Cameroon,32 and the government even elected to frequently

ignore or reject the demands of monetary authorities (Stasavage 1996). Medhora (1995)

also notes that in the BEAC region, the Cameroonian share of seigniorage has greatly

increased in recent years. Besides, from the beginning of the 1970s, the governors of the

BEAC were always plagued by tense relations with Cameroon, and during the 1994-1995

period President Paul Biya even refused to grant audience to the governor of this august

institution. Cameroonian behaviour could be tolerated in as much as the uneven

32 In a multi-country analysis of monetary policy in Africa, Savvides (1998) finds that only Cameroon was

unable to pursue an independent monetary policy.


distribution of seats at the Board of Governors provided it with an undeniable advantage33

so that it is capable of blocking important decisions. Fouda (1997) illustrates the

existence of a political/monetary cycle in Cameroon. This cycle shows that

macroeconomic aggregates were manipulated for a prolonged stay in power by

successive governments of the country. There is an increase in liquidity prior to every

election (7-8 months before parliamentary elections and 8 months before the presidential

election), and there is a downturn in liquidity 5 months after elections, both parliamentary

and presidential. The main causes are the need to gain national popularity and to satisfy

the international community. The existence of the monetary/political cycle equally

highlights the lack of independence of the Central Bank.

A third form of intervention originates from the privileged political relationship

with France that has in particular undermined the fiscal discipline built into the CFA

Accords. For example, in 1987 when the French Treasury was hoping that credit

restrictions would oblige Cameroon to redress its budgetary balance, the government

could go directly through the French President to secure an increase in French assistance

that postponed budget stabilization. The government of Cameroon also gained from the

pressure exerted by France at the level of the Bretton Woods institutions, the end result

being that a group of French political and civil service officials worked against the

interest of their own government agency charged with implementing the aid

conditionality (Stasavage 1996).

33 The BEAC has a Board of Governors, with the seats distributed as follows: Cameroon (4 seats), France

(3 seats), Gabon (2 seats); the other states (a seat each).


Financial discipline and the inefficient macroeconomic framework

The exchange rate can be used to facilitate the convergence of inflation and the rate of

currency depreciation, thereby fostering high return on investment and securing

international competitiveness. The real exchange rate facilitates optimal resource

allocation provided adequate institutional arrangements and other factors such as

competitive and rent-free economies, sound financial institutions, strengthened trade

policies and human capital accumulation. The specific arrangements of the CFA Accords

have assured currency convertibility, to the point that the CFA became the reserve

currency for neighbouring countries in the 1980s and early 1990s. During the first period

the built-in restraints on fiscal and monetary policies coupled with currency convertibility

were the driving forces behind the growth outcomes obtained. These were unfortunately

due to external factors to the zone. For example until the late 1970s the French Franc was

relatively weak, was depreciated, and frequently devalued vis-à-vis the US dollar.

Because of this depreciation via the FF, the real exchange was not overvalued despite the

worsening terms of trade. In all, the country performed well.

Beginning in 1985 the French franc started to appreciate vis-à-vis the US dollar

while the deterioration of terms of trade continued. To make things worse the currencies

of neighbouring countries, including Nigeria, were also depreciating. This further eroded

competitiveness and partly explains the growth collapse. The sluggish performance since

the mid-1980s’ is partly the result of an inappropriately valued currency that constrained

growth. The inertia of the CFA Accords prevented the adjustment required to restore

competitiveness (Elbadawi and Madj 1996). The long-run economic stability and - hence

credibility - has been instrumental in providing a favourable climate for domestic


investment and savings. As a result while the CFA accords may not provide the needed

framework for adjusting to short term shocks it is quite useful for long run economic

growth.

Shifting monetary and exchange rate policy decisions to the supranational level

increases the likelihood of spill-over effects of national conditions. Coordination failure

in an environment with multiple decision makers led to externalities that deterred rather

than promoted long-term growth. One area where this is possible is fiscal policy and its

inflationary effects. Sound financial institutions are necessary to secure financial

discipline. The key features of sound commercial banking are not currently in place. The

CFA Accords also provide for prudent deficit financing, namely the 20 percent ceiling

rule aiming at preventing deficit monetization by member countries. Growth can be

constrained by the inertia of the system that has led to too much of a focus on monetary

stability at the cost of serving as an agent of overall economic development. As noted by

Elbadawi and Majd (1996) “Notwithstanding the increasing demand pressure for central

bank refinancing of the commercial banks’ meagre portfolios and the pressing need for

monetary financing of the government deficit, the two central banks appear to have opted

for their commitment to financial stability at the expense of their responsibilities as

lenders of last resort.”

In practice the independence of central bank governors from political interference

in the BEAC is constrained by the decision making process and the effective power of the

governor in setting and/or implementing policy. Key management positions at the BEAC

-from the governor to departmental heads- are allocated to State members and France.

National considerations prevail in daily management of the bank and this undermines the


bank's operation. The BEAC is only nominally independent; it operates as agents of fiscal

authorities with substantial refinancing of politically directed or government-inspired

bank lending. The confusion of ownership and control responsibilities implies that the

central banking aspects of the Indispensable Institutional Framework (IFF) are lacking in

the BEAC. The CFA Accords also provide for prudent deficit financing. The rigidity of

the institutional framework established for monetary and banking arrangements have

given policy-makers a false sense of security. These rules did not guarantee an IIF. To

the contrary; these rigidities induced an evolution of banking practice, which violated the

IIF by subordinating both commercial and central banking to fiscal pressures. Changes in

exchange rate can impact nominal and real economic variables, with effects on all

economic agents. The effectiveness of an exchange rate regime can be assessed by the

ability to adjust to shocks from domestic and foreign sources. A framework for assessing

the trade-off between output growth (or other real variables) and inflation arises from the

literature on the political economy of inflation (Persson and Tabellini 1990; Devarajan

and Rodrik 1992). Counterfactual analysis by Devarajan and Rodrik (1992) showed that

CFA regime selection since the 1980s has been costly in terms of employment and

growth and allowing for some flexibility and a higher level of inflation would have

provided for better growth performances.

Despite the apparent modern and competitive structure, the Franc zone in general

and the BEAC in particular lack flexibility; Honohan and Vittas (1996) characterize the

institutional arrangement as a fatally rigid one. In fact, the Franc zone shows both the

benefits and the costs of external restraint (Collier and Gunning 1999c). The growth

collapse of the post 1985 period is in large part due to the rigidity in the macroeconomic


institutional setting. It is worth assessing how the country adjusted to external shocks

without the possibility of using exchange rate policy. The Cameroonian economy

depends for export revenue on a limited number of agricultural or mineral goods whose

prices have been very volatile. Price volatility in these export commodities can be seen as

positive or negative shocks which can be temporary or permanent; unfortunately the

perception of the nature of the shocks has often been incorrect with short terms positive

shocks interpreted as being permanent and forming the basis for long-term investment.

5. Conclusion

The low growth outcomes observed in Cameroon can be traced to contracting problems

among the players in the economy. Inefficiency is primarily due to the fact that

policymakers represent only narrow interests, which are pursued in the name of a larger

group. The centrifugal forces among the three main groups of the country have prevented

the formulation and implementation of policies that can secure long-term economic

growth.

The country suffered from different kind of shocks, but without a major negative

one. The key problem is weak policy formulation capacity. The authorities failed to

adequately appraise the nature of the shocks, hence bad options were chosen. Current

performance is partly the legacy of these past policy failures (Blandford et a. 1994). To

avoid the Dutch Disease, the authorities keep most of the oil revenues in a special foreign

account not directly included in public finance accounting. Some identify this decision as

a channel for shifting oil revenues to private bank accounts.


The average growth performance also reflects macroeconomic instability. One

such aggregate is the exchange rate, which can facilitate the achievement of desired

adjustment in relative prices. Stability in the exchange rate is a good indicator and policy

arrangements that can lead to desired level for the real exchange rate without rigid and

costly commitment are preferable. Inflation can be generated by an expansionary

monetary policy or fiscal deficit. A commitment technology is necessary for the public to

believe the current policy stance. Such a technology should prevent increases of revenues

or tax cuts beyond certain levels.

Fiscal discipline should pay particular attention to monetary financing of deficits

by financial institutions. The CFA commitment technology, the 20% fiscal rule, has not

prevented deficit. A central issue here is whether the list of policy instruments available

is satisfactory. Recent discussions, especially preceding the 1994 devaluation, suggest

that while the reform focusing on the introduction of flexibility and sound financial

institutions is the priority, a framework conducive to faster decisions on currency

devaluation is called for.


Appendix: Data definitions and sources

In this appendix we describe our data sources and key steps in the analysis of our data.

The sources of the data are from the Food and Agriculture Organization (FAO) (see

www.faostat.fao.org), the International Financial Statistics (IFS) (CD Rom 2003)

released by the International Monetary Funds, the World Development Indicators (WDI)

(CD Rom 2005) released by World Bank and the OPEC Annual Statistical Bulletin (see

www.opec.org).

1) Cocoa, coffee, wood, banana, cotton, rubber, tea, tobacco, groundnut, and oil palm

Cocoa is the cocoa beans exports; Coffee is the coffee green exports; Wood is the forest

products exports; Cotton is the cotton lint exports; Rubber is the rubber natural dry

exports; Tobacco is tobacco leaves exports; and oil palm is palm kernels exports. All the

data for these products are taken from FAO and are in thousands of US dollars. We

multiplied them by thousand to obtain the value in US millions dollars.

2) Oil exports and price

The oil exports are in thousands of barrels per day (source: OPEC). To obtain the value

of oil exports in millions of US dollars per year, we multiplied the quantities exported by

the price per barrel (source: OPEC), by 1000 and by 365.

http://www.opec.org/


3) GDP, Government expenditures, investment, exports, imports and saving

GDP is the gross domestic product in US dollars (source: WDI). Government

expenditures are the general government final consumption expenditure in US dollars

(source: WDI). Investment is the gross fixed capital formation in US dollars (source:

WDI). Consumption is the final consumption expenditure in US dollars (source: WDI).

Savings is the gross domestic savings (% of GDP) (source: WDI). Exports and imports

are respectively exports and imports of goods and services in US dollars (source: WDI).

4) Terms of trade

The terms of trade are defined as the ratio of implicit price deflator for imports to implicit

price deflator for exports, with deflators computed as ratios of current-price imports and

exports to base-year-price imports and exports (source: WDI).

5) Contributions of sectors to GDP

The contribution of sectors to GDP is the manufacture value added, services value added,

industry value added and agriculture value added in percentage of GDP (source: WDI).

6) Real deposit interest rate

The real deposit interest rate is the nominal deposit interest rate (source: IFS) minus the

inflation rate. The inflation rate is calculated by using the consumption price index

(source: WDI).


7) Land Use

The data for total land area, agricultural area, permanent crops area, Forests and

woodland are taken from FAO data base. The data are in 1000 Ha.

8) Population

The data for total population, agricultural population, non-agricultural population, rural

population and urban population are taken from FAO data base.


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Table 1: Fraction of agricultural area to total area use (in percentage)

Period Agricultural Area

Permanent Crops Area

Forestry Area

1961-1977 17.16 1.38 77.14

1978-1985 19.29 2.37 77.14

1986-2001* 19.71 2.62 77.14

1961-2001* 18.60 2.07 77.14*Data for forestry area end in 1994.Source: FAO.


Table 2: Primary commodity exports (in millions of USD)

Period Oil Cocoa Coffee Banana Cotton Wood Rubber Tea Tobacco Groundnut Palm Oil Total

1961-1977 - 61.83 70.33 5.21 9.97 27.36 5.71 0.34 1.37 2.43 2.65 187.22

1978-1985* 748.66 160.85 228.53 3.53 29.15 100.89 8.48 1.10 5.09 0.48 1.67 1288.43

1986-2003 842.52 133.46 138.08 39.18 70.71 284.16 28.22 0.47 1.23 0.08 0.26 1538.37

1961-2003** 819. 06 110.24 127.89 19.12 38.97 148.54 15.65 0.53 2.01 1.08 1.47 1282.55*1980-1985 for oil; **1980-2003 for oilSources: FAO, OPEC.


Table 3: Fraction of different segments of population to total population (in percentage)

Period Agricultural Population

Non Agricultural Population

Rural Population Urban Population

1961-1977 80.14 19.86 79.59 20.411978-1985 67.19 32.81 67.29 32.711986-2001 58.32 41.68 55.81 44.191961-2001 68.60 31.40 67.35 32.65Source: FAO.


Table 4: Growth of GDP, inflation, and the real interest rate (in percentage)

Period GDP GDP per Capita Inflation Real Deposit Rate

Real Lending Rate

1961-1977* 4.61 2.11 8.97 NA NA

1978-1985 6.88 4.05 9.99 -3.15 2.74

1986-2001 0.53 -2.06 4.20 2.26 13.98

1961-2001** 3.39 0.79 6.97 0.62 10.56

* 1968-1977 for inflation** 1968-2001 for inflation; 1978-2001 for deposit and lending rates.Source: WDI, IFS.


Table 5: Macroeconomic aggregates relative to GDP (in percentage)

Period Gov’t Exp. Investment Final Consumption

Gross Domestic Savings

1961-1977 8.13 18.84 82.68 14.721978-1985 7.31 29.73 68.86 25.191986-2001 9.89 18.74 75.22 19.501961-2001 8.72 21.78 76.98 19.07Source: WDI.


Table 6: Contribution of factors to growth in Cameroon

Notes: bgno represents the real GDP per capita; bclo represent the contribution of capital per head; bcho is the contribution of education per head; and bcro is the contribution of global productivity of factors.Source: Authors’ construction from data provided by O’Connell and Ndulu (2000).

Sub-Period bgno bclo bcho bcro

1960-1977 1,41 1,40 0,22 -0,22

1978-1985 7,66 3,17 0,47 4,01

1986-2000 -2,58 1,00 0,28 -3,86

Mean 1,16 1,61 0,29 -0,74


Table 7: Contribution of macroeconomic variables to deviation vis-à-vis average real GDP per capita

Sub-period

Deviation vis-à-vis of average of

sample

pinMacroeconomic framework Total

Contribution

infl bmpl gxbx

1960-1977 0.03 0.18 0.04 0.13 -0.37 -0.20

1978-1985 0.75 0.18 0.03 0.15 -0.34 -0.17

1986-2000 -4.45 0.13 0.04 0.15 -0.33 -0.14

Average -1.37 0.15 0.04 0.14 -0.34 -0.16

Notes: infl represents the inflation rate; bmpl represents the black market premium; gxbx is the unproductive government expenditure as a ratio to GDP; and pin represents the political instability index.Source: Authors’ construction from data provided by O’Connell and Ndulu (2000).


Table 8: Evolution of international and national prices of certain cash crops (per kg) between 1973 and 1993

Period cpint cpnat rpint rpnat apint apnat

1973-1977 500.10 182.80 528.02 201.00 632.34 210.20

1978-1985 768.30 277.00 884.60 300.00 1045.80 315.50

1986-1993 469.00 316.20 514.00 293.10 752.00 356.20Notes: cpint, rpint and apint represent the international prices of cocoa, Robusta coffee and Arabica coffee respectively; cpnat, rpnat and apnat represent the national prices of the same crops. Source: Authors’ construction from data provided by ministry of planning.


Table 9: Distribution of managers of public and state-owned enterprises in Cameroon by ethnic group (in %)

Region General Managers

Deputy General Managers Total Influence of ethnic

groups34

Beti 39.2 46.2 39.6 24.1

Sawa 7.8 15.5 10.8 14.0

Northerners 6.1 3.3 5.4 29.7

Anglophones 12.1 7.4 10.5 19.6

Bamileke 16.7 20.2 18.3 12.6

Expatriates 18.2 7.4 15.5

Total 100 100 100 100

Source: Impact Tribune (1993): La Démocratie Africaine, Otage du Tribalisme?

34 There are no data on the influence of the various ethnic groups. Also, we have made a gross approximation of the influence of each group, by supposing that it corresponds, in relation to its total population, to its regional representation (by so doing, we rely on the fact that the administrative break up of Cameroon conforms with the ethnic reality of the country) (Changer le Cameroun 1990).


Table 10: Ministerial positions by ethnic groups between 1960 and 2002

Ethnic GroupsAHIDJO

(1970-1982)

BIYA

(1983-2002)Relative increase

Betis 8.7 14.1 1.6

Sawas 1.9 5.8 3.1

Northerners 5.6 8.7 1.6

Anglophones 5.9 6.7 1.1

Bamilekes 4.9 5.6 1.1

Average ministerial team 26.9 40.8 1.5

Average group per

ministerial team5.4 8.2 1.5

Source: Table compiled by authors from data collected at the ministry of territorial administration.


Figure 1: Evolution of terms of trade

Terms of Trade

1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 20040.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

Sources: Authors calculations with WDI data.



Oil and Wood Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILWOOD

Oil and Cof f ee Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILCOFFEE

Oil and Cocoa Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILCOCOA

Oil and Cotton Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILCOTTON

Oil and Banana Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILBANANA

Oil and Tea Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILTEA

Oil and Tobacco Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILTOBACCO

Oil and Palm Oil Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILOIL_PALM

Sources: OPEC, FAO and WDI.



Oil and Rubber Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILRUBBER

Oil and Groundnut Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19980

2

4

6

8

10

12

14

16OILGROUNDNUT

Oil and Agriculture Products Exports (in percent of GDP)

1962 1968 1974 1980 1986 1992 19982

4

6

8

10

12

14

16

OILAGRICULTURE

Sources: OPEC, FAO and WDI.


Figure 4: Evolution of GDP per capita and growth of GDP per capita

GDP per Capita (Constant 2000 US $)

1961 1968 1975 1982 1989 1996400

500

600

700

800

900

Growth of GDP

1961 1968 1975 1982 1989 1996-15

-10

-5

0

5

10

15

20

Source: WDI, World Bank.


Figure 5: Evolution of oil exports and Government Spending Relative to GDP (in percentage)

Oil Exports and Government Expenditures (% of GDP)

1962 1968 1974 1980 1986 1992 19984

6

8

10

12

14

16OILEXPENDITURES

Sources: OPEC, WDI.


Figure 6: Contribution of sectors in GDP

Contribution of Sectors Relative to GDP (in percent)

1961 1968 1975 1982 1989 19968

16

24

32

40

48

56AGRICULTUREINDUSTRYMANUFACTURESERVICES

Source: WDI, World Bank.


Figure 7: Inflation Rate

Inflation Rate

1961 1968 1975 1982 1989 1996-5

0

5

10

15

20

25

30

35

Source: WDI, World Bank


Figure 8: Evolution of real deposit rate

Real Deposit Rate

1975 1979 1983 1987 1991 1995 1999-25

-20

-15

-10

-5

0

5

10

15

Source: IFS, IMF.

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Political Economy of Cameroon’s post-Independence … · Web viewThe structural characteristics can be considered from two perspectives: the role of new technologies in the growth