The relationship between foreign direct investment and GDP in Cameroon (2000–2020)

Abstract

Relevance. In the last 20 years Cameroon has faced a series of crises. The 2035 governmental programme of recovery aims to transform the country into an emerging economy nation. The effects of the COVID-19 pandemic have slowed down economic growth in Cameroon and the country is hoping to attract foreign direct investment (FDI) and thus benefit from the new business opportunities to revitalize its economy. This context makes the research on the relationship between FDI and GDP particularly relevant. Research objective. This paper is designed to assess the relationship between GDP and FDI in Cameroon in 2000-2020. In addition, we aim to assess the scope of internationalization through FDI as a possible catalyst for economic recovery. Data and methods. The paper uses correlation and regression analysis to show the relationship between FDI and GDP. Results. The results show that FDI can increase Cameroon’s GDP and may be used as an empirical basis for policy- and strategy-making in Cameroon. Conclusions. We found a strong correlation between FDI and GDP in Cameroon for a 21-year period. This result is supported by the double effect of FDI on the national economy: FDI directly affects the investment component of GDP, but it also influences economic growth indirectly. The activities of foreign firms in Cameroon can support trade and even balance of payment, which indirectly influences the export and import component of GDP. Foreign subsidiaries both solely owned or joint ventures pay indirect taxes to the government and thus influence government spending.

Exploring the Long-Term Relationship between Foreign Direct Investment and GDP: Empirical Insights from Bangladesh

“…This review synthesizes findings from multiple studies to provide insights into the multifaceted relationship between FDI and GDP. Numbu and Belyaeva (2021) explored the relationship between FDI and GDP in Cameroon from 2000 to 2020. Against a backdrop of economic crises and the COVID-19 pandemic, their study aimed to assess the potential of FDI to rejuvenate the Cameroonian economy.…”

The Politics in Aspirations and transformation of the Agricultural Sector through Megaprojects in Cameroon

“…There were two intentions, one being that African governments would lease or sell land to foreign investors to bring about modern and efficient agricultural production, poverty reduction and increased food security. The second is that local agricultural development institutions will develop their capacities to produce more as they are fully aware of the local realities [4]. An important underlying assumption based on the intentions is that smallholder agricultural production is inefficient and outdated.…”

“…The country is particularly important since it concentrates on mega agricultural projects. In line with an investor-friendly habit, the Cameroon government has attracted bilateral donors and has channelled funds to implement over 40 mega-agricultural projects while some are ongoing [4]. The resurrection of large-scale agricultural development is hard to understand in so far as megaprojects have long been criticised for notorious under-performance, delay and cost overrides, a phenomenon described as the megaprojects paradox' [9].…”