Decomposition of Total Factor Productivity Growth in Cameroon: A Policy Perspective

Abstract

Decomposition of Total Factor Productivity Growth in Cameroon: A Policy Perspective Jerome Kum Muankang, Saidou Baba Oumar, and Tafah Edward Edokat Oki Abstract This paper attempts to estimate total factor productivity growth and identify its determinants in the Cameroon economy. The study uses annual data that span the period 1970-2015. The Battese and Coelli (1992) and Nishimuzu and Page (1982) functions were used to estimate and decompose total factor productivity growth into its various factors using the stochastic frontier analysis based on the translog production function. The results show that the 1986-1994 period of the 1980s economic crisis remains the worst economic crisis period ever experienced by the Cameroon economy since 1970 as total factor productivity growth registered the lowest negative score compared to the 1973 oil crisis and the 2008 global financial and economic crisis. The study further reveals that allocative efficiency and technical efficiency are the major promoters of total factor productivity growth, while random shocks represent potential reducers of total factor productivity growth in the economy of the country. As a result, it is recommended that more efforts should be placed on human capital development and the expansion of modern technology endowed capital equipment in order to effectively manage productive resources and reduce inefficiency in the production process. Above all, there is the need to introduce structural reforms in the various sectors of the economy to ensure their growth and limit the severe variability of labour productivity between sectors so as to ensure the sustainability of any achieved level of total factor productivity growth in the long run. Full Text: PDF DOI: 10.15640/jeds.v8n2a5