Natural resources as agents of economic emergence: evidence from Cameroon

Abstract

Classical economists were of the view that development is a convoluted process and as such countries can only achieve development through a linear path consisting of five stages. Going by this philosophy, the country under the New Deal Government of Cameroon, by its status is between the traditional stage (stage 1) and the pre-conditions to take-off stage (stage 2). Admitting all efforts are put in place as drivers for take-off stage (emergence or stage 3), it becomes imperative to evaluate the sustainability of this economic emergence. Thus, sustainability drivers such as real gross domestic product per capita, availability of quality agricultural land, energy supply, population growth, enrolment into higher education, foreign direct investments and gross domestic capital formation are evaluated to account for the feasibility of Cameroon’s emergence comes 2035. Based on time series data from 1960 to 2017 inclusive on the above listed variables, and using the Structural Vector-Auto Regressive (SVAR) models, the findings yield some useful policy guides. Subject to pre and post-tests of estimation, forecasting was guaranteed up to 58years outside the data set. With a justified 70.2 percent simulation results, the findings reveal that total natural resources rents can actually pave the way for sustainable growth and development in Cameroon by2035 and beyond. The true direction therefore reveals that, in addition to proper management of the available total natural resource rents, reasonable portion of government expenditure and returns on foreign direct investment should be directed to agricultural research, investment in education especially in science, and technology, engineering and mathematics (STEM) and innovation, rents conservation, infrastructural development, energy supply, population growth and the trade-off of leisure in favour of work. These among others are the gate-ways for sustainable growth, development and hence the emergence of Cameroon in 2035. Keywords: Natural Resources; Rents; Economic Emergence; Real Gross Product Per Capital; Energy Supply; Agricultural Land; Foreign Direct Investment; Gross Domestic Capital Formation and Sustainable Development