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Petroleum Products Price Fluctuations and Economic Growth in Cameroon

Author

Listed:
  • Njimanted Godfrey Forgha
  • Molem Christopher Sama
  • Elvis Dze Achuo

Abstract

Commodity exports have over the years been the main source of foreign exchange earnings to most developing countries. This is especially the case with crude oil producing countries such as Cameroon since the discovery of oil in the late 1970s. However, as evident in the economic crises era of the mid 1980s, this exposes the commodity dependent country to heavy external shocks such as price fluctuations which affect the level of growth of the country. It is in this light that this study was conducted to examine the effect of petroleum products (crude oil) price fluctuations on the economic growth of Cameroon. Secondary data from1980 to 2013 were used to estimate the coefficients of the ordinary least square technique used to analyse the dependency between the dependent and independent variables of the phenomenon. The results obtained reveal that petroleum product prices have a positive significant effect on the economic growth of Cameroon, while the volume of trade to GDP (openness) and real interest rate have a negative significant effect on the economic growth of the country. Human factors (demand and supply imbalances, and interest rates) and natural factors (geographical location and resource endowment) are the principal causes of variations in the prices of petroleum products among different regions. From these, it is suggested that for Cameroon to benefit from the global trade process by opening up to the rest of the world, the revenue generated from crude oil exploitation should be re-directed towards investment in both human and physical capital so as to enhance the productive capacity of the nation, especially in the manufacturing and transport sectors.

Suggested Citation

  • Njimanted Godfrey Forgha & Molem Christopher Sama & Elvis Dze Achuo, 2015. "Petroleum Products Price Fluctuations and Economic Growth in Cameroon," Growth, Asian Online Journal Publishing Group, vol. 2(2), pages 30-40.
  • Handle: RePEc:aoj:growth:v:2:y:2015:i:2:p:30-40:id:775
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    Citations

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    Cited by:

    1. Elvis Dze Achuo, 2022. "The nexus between crude oil price shocks and environmental quality: empirical evidence from sub-Saharan Africa," SN Business & Economics, Springer, vol. 2(7), pages 1-15, July.
    2. Elvis Dze Achuo & Tii N. Nchofoung & Simplice A. Asongu & Gildas Dohba Dinga, 2021. "Unravelling the Mysteries of Underdevelopment in Africa," Working Papers of the African Governance and Development Institute. 21/073, African Governance and Development Institute..
    3. Clovis Wendji Miamo & Elvis Dze Achuo, 2022. "Can the resource curse be avoided? An empirical examination of the nexus between crude oil price and economic growth," SN Business & Economics, Springer, vol. 2(1), pages 1-23, January.
    4. Tii N. Nchofoung, 2023. "Oil price shocks and energy transition in Africa," Working Papers 23/064, European Xtramile Centre of African Studies (EXCAS).
    5. Nchofoung, Tii N., 2024. "Oil price shocks and energy transition in Africa," Energy Policy, Elsevier, vol. 184(C).
    6. Clovis Wendji Miamo & Elvis Dze Achuo, 2021. "Crude Oil Price and Real GDP Growth: An Application of ARDL Bounds Cointegration and Toda-Yamamoto Causality Tests," Economics Bulletin, AccessEcon, vol. 41(3), pages 1615-1626.

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