Assessing the Effect of the Cameroon’s Investment Charters on Private Investment

Abstract

The Cameroon government has implemented a series of investment legislations, the latest of them being that of 2002 with the aim of boosting investments and stimulating economic growth. This paper while focusing on the latest investment code contends that the various investment legislations have had a positive effect on private investments. Data for the study is collected from the World Bank Development Indicators, covering a period of 31 years from 1980 to 2010. The estimation technique used for this study is the Generalized Methods of Moments (GMM) estimation technique. The analyses (both descriptive and empirical) showed that the institution of the investment charter between 1991 and 2002 did not improve the level of private investment. However, we did obtain results indicating that the introduction of the investment charter in April 2002 resulted to an improvement in the level of private investment. Other results obtained showed that domestic credit to the private sector, GDP growth and electricity production play a positive and statistical significant influence on the level of private investment in the country. An important conclusion is that the policy structures of the 2002 investment charter should be fully implemented so as to encourage and enhanced private investment in the country.