Abstract

This study was design to find out The Effect of Corruption on the Economic Growth of Cameroon. To achieve the objective of the study, the specific used were; to examine the impact of corruption on the economic growth of Cameroon and to make recommendations on how the fight against corruption can effectively increase economic growth of Cameroon.

Descriptive analysis was used to analyse the data. The findings of this study indicated that: corruption has a negative value that is –0.04 implying that corruption has a negative impact on economic growth.

The result shows that a 1% increase in corruption will lead to a -0.04 decrease in economic growth. Findings equally affirm that there is a positive relationship between Gross Fixed Capital Formation and Economic Growth with the former having a value of 0.162 which implies that Gross Fixed Capital Formation has a positive impact on GDP per capita of Cameroon. The result shows that a 1% increase in Gross Fixed Capital Formation will lead to a 0.162% increase in GDP per capita of Cameroon.

Based on the findings some recommendations were made on the way forward. Corruption has been detrimental to economic growth and in order to enhance the economic growth in Cameroon, the rate of corruption need to be reduced to a certain level closer to 0 or 1.

Also, given the negative impact of gross fixed capital on economic growth, the Government should implement measures that can increase it and this can be done by investigating infrastructures and making sure that they are properly constructed and yield the purpose for which it was elevated.

CHAPTER ONE

INTRODUCTION

1.1. Background of the study

Cameroon is one of the Sub Sahara Africa countries. It is found between West and Central Africa, it is geographically found at the West of Africa but for economic and political reasons, it is situated in Central of Africa. It has a surface area of 475.442 sq. km.

According to UNESSCO, 1995, its borders extend from Lake Chad to the extreme of the Gulf of Guinea between latitude 2° North and longitude 9°East and 16° east of the Greenwich Meridian. In view of the recent population census carried out in 2016, the country’s population was estimated at 23.4 million people.  Cameroon is naturally endowed with various human and natural resources.

In recent years, corruption has been a global issue that affect many countries of the world especially the less economical developed countries with Cameroon being among. And  has now globally recognised as a policy variable that affect almost all aspect of social and economic life of most developing countries where it is thought to be more important for the attainment of long term economic growth and sustainable development.

According to world transparency international organisation, corruption can be define as the misused of public power for personal or private interest. Some examples of corruption includes; embezzlement of public funds, the sale of government properties by public officials, bribery, patronage, and nepotism. Corruption is the greatest obstacle to social and economic development since it twist the rule of law and weakens the institutional foundation upon which economic growth is constructed.

However, the issue of corruption has been an on-going debate whereby one school of thought says, corruption has a positive impact on economic growth and are of the opinion that corruption encourages trade that might not have  taken place and it also promotes efficiency by allowing private sectors agents to avoid unmanageable regulations ( Huntington, 1968; Summers, 1977; Lui, 1985; Meon and Weill, 2010) and by implication, corruption has the power of producing a more efficient economic agents and in the long run it enhance economic growth.

Despite the above positive impact of corruption on economic growth, another school of thought are opposing that corruption has a negative impact on economic growth and sustainable development( united nation development program UNDP, 1997; Wei, 1997, World Bank, 2000; Svenson, 2004).

The transmission mechanism of these negative impact is that, it has reduced domestic and foreign investment, increase cost of production, misallocation of natural resources, higher inequality and poverty, uncertainty in decision making. However, the government of Cameroon has embarked upon a series of economic reforms programs supported by the world bank and the international monetary fund (IMF).

The gross domestic product (GDP) growth rate was 3.8% in 2006 and 3.8% in 2007, with a forecast of 5.3% for 2008 by IMF. The economic dynamism of the country  is still fragile given the fact that the economy still depend so much on international oil prices(considering that the oil production in the country is declining) and the budgetary deficit is affecting the industrial production.

In addition Cameroon is still not able to attract sufficient foreign investment, the country is suffering from insufficient infrastructures and is one of the most corrupt countries in the world. Even though the country has numerous resources, Cameroon economy had witnessed a period of stagnation in economic growth especially during the heavy economic crisis that stoked the country in the late 80s and this partly blamed on corruption and mismanagement of the country’s vast resources. Corruption has gone so deep inner core of the Cameroon government and has gone up to the level that private and public sector, government and non-government organisations have essentially become a useful channel for people to acquire wealth (Mustapha, 2008).

This highly contributed to the backwardness of the country’s economic development and the inability of the government to implement the anti-corruption policies successfully and it’s a threat to the future economic development.

Given the prevailing issue of corruption in Cameroon, the anti-corruption campaign by the government known as operation sparrow hawk to imprison all corrupt government officials was launched. However, the biggest challenge for the country is not just to punish the perpetuators of corruption but educating its citizens on the dangers and measures to tackle corruption (Obayelu, 2007)

1.2 Problem statement

Corruption has become a common phenomenon in every society nowadays and the negative effect it has on the political and socio-economic structure of a country can be hardly over emphasized. There has been a global out cry and collective effort to tackle this social ill through the implementation of anti-graft laws and policies across the world.

As the fight against corruption continues, other nations have been successful in their quest to limit the level of corrupt practices while others are still lagging behind. According to 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five on a scale from 0 to 10, indicating a serious corruption problem.

The 2010 CPI measures the degree to which public sector corruption is perceived to exist in 178 countries around the world. The 2010 CPI shows that nearly three quarters of the 178 countries in the index score below five on a scale from 0 (perceived to be highly corrupt) to 10 (perceived to have low levels of corruption), indicating a serious corruption problem.

Botswana, the first sub-Saharan African country comes at the 33rd position with a score of 5.8, followed by the Mauritius Islands at the 39th position with a score of 5.4 and Cape Verde at the 45th position with a score of 5.1. The rest of the 30 African countries considered in this ranking are below average. Cameroon and Cote d’Ivoire share the last position with a score of 2.2.

The case of Cameroon seems to be an example of a failed to government combating corruption. From the commoner in the street to the highest government official and political figure, corruption is recurrent in almost every transaction of daily life in the Cameroon society. The individual participate in corruption either actively or passively.

Cameroon has written its name on the annals of corruption to the extent that today, the name Cameroon is synonymous to corruption as every aspect in our daily lives seems to be exploited for personal interest. Since Cameroon became an independent nation after the declaration of the UN in 1961, the country has made slide progress in economic development as compared to other countries that lack the enormous potentials in making a significant progress in economic development.

Cameroon with natural resources of all sort, with rich volcanic and tropical climate for cash crops production and finally its rich touristic sites, are areas which are being exploited, yet our economic development had been in a sluggish response instead poverty is on the rise. Many have questioned the determination of this nation in combating corruption which apparently has good anti-corruption laws and institutions in place.

It is from this light that this research seeks to investigate the extent to which these corrupt practices has on economic development of Cameroon and to what extent the anti-corruption policies in Cameroon have succeeded in fighting against corruption in Cameroon.

1.3. Research questions

This work will examine the impact of corruption on economic growth and make recommendations on how the fight against corruption can effectively increase economic growth in Cameroon. In this study, we are also going to look at the case study and bring out useful facts to put up a strong argument to expose the validity of corruption being the main cause for the underdeveloped nature of Cameroon.

This will be backed by valuable empirical data. This research will further examine the various contributions from international organisations to foster genuine economic development in Cameroon.

In order to arrive at the set objectives of the research, three research questions were formulated:

1. What is the impact of corruption on the economic growth in Cameroon?
2. What are causes of corruption?
3. What are the types of corruption?
4. Is there any causal relationship between corruption and economic growth?

These research questions will be answered with the help of empirical facts, documents; related literature on Cameroon corruption discuss and economic issues.

1.4 Objectives of the study

1.4.1 Main Objective

The main objective of the study is to analyse the impact of corruption on the economic growth of Cameroon.

1.4.2 Specific objectives are to;

1. Examine the impact of corruption on the economic growth of Cameroon.
2. Make recommendations on how the fight against corruption can effectively increase economic growth in Cameroon.

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