Gauthier and Zeufack - Governance and Oil Revenues in Cameroon

Gauthier, B., and Zeufack, A., Governance and Oil Revenues in Cameroon, Revenue Watch Institute, OxCARRE Research Paper 38, October 7, 2009.

 

The authors examine the governance of oil revenues in Cameroon. They note that with the extraction of oil in 1977, Cameroon had the potential of becoming one of the richest Sub-Saharan African countries. But upon examination of its economic growth, the authors argue that Cameroon is a resource cursed country as most development indices since the mid-1980s have continued to free fall. They argue that Cameroon was richer in 1985 than it is in 2007.

Based on evidence available, the authors find that Cameroon has captured about 67% of its resource rent and that out of its total revenues, only about 46% have been transferred to the budget leaving a total of 54% unaccounted for. To this end, the authors argue that Cameroon has failed to harness its oil resources for sustained growth and development due to corruption and lack of transparency and accountability.

The authors examine the role of IMF, World Bank and other bilateral/multilateral donors in pushing for improved and transparent governance in Cameroon. They find that non-implementation of several suggested reforms is responsible for the slow pace of economic recovery. The authors also note that Cameroon’s seeming commitment to transparency by adopting EITI Initiative is subject to regulatory capture due to factors such as the non-audit of declared revenue receipts and payments, government compensating EITI committee members and lack of technical capacity by committee members.

The authors conclude that the need for reforms such as creating an independent energy regulatory agency is inevitable. They also advised international donors to adopt a more effective monitoring strategy to avoid regulatory capture.

Comments
No comments.
button-icon
goxi