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Testing the causality between Export Diversification, External Debt and Economic Growth in Cameroon using the Vector-Autoregrasive Analysis


GN Forgha
CM Sama

Abstract

This study aims at evaluating the links between export diversification, external debts, labour productivity, domestic investment and economic growth in Cameroon between 1980 and 2014 under the precondition that current data predict future events more than previous data. This work is therefore motivated on the ground that Cameroon economy which is highly diversified in natural resources, ,population, cultural, economic and political institutions remains underdeveloped while Ethiopia and East Asian nations with comparatively few resources are making news in their trends of growth and development in the globe. To achieve the desired objectives of this study, the Vector-Autogressive (VAR) technique is employed on the bases of its dynamism to stimulate the expected policies for the study of this nature. The findings are in agreement with the prior theoretical expectations and works of others especially in the Asian economies. Based on the findings of this study, it is strongly recommended that if growth and development is targeted in Cameroon, then the export base needs to be expanded by more than 60% under the endogenous growth hypothesis with limited external debts, This should be enhanced by research on new and complementary products, the creation of conducive business environment for private sector growth and high drive for technical and pragmatic capacity building in Cameroon.

Keywords: Economic Growth, External Debts, Productivity, Export Diversification, Domestic Investment, Conducive Environments and Transparency


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eISSN: 2617-3948
print ISSN: 2617-393X