Poverty Changes in Cameroon over the 1996-2007 Period

Samuel Fambon

doi:10.18483/ijsci.1241

Abstract

This study examines changes in the extent of poverty in Cameroon during the period 1996-2007. More specifically, it investigates the determinants of poverty as well as the contributions of growth and redistribution factors to changes in poverty over a period of 12 years going from 1996 to 2007. The analysis is based on data gathered at the household level by three consecutive household surveys that were conducted in 1996, 2001 and 2007 respectively. The results of the study show that over a period of 12 years, the extent of poverty decreased by more than half in the urban area, while in the rural area, it fell first between 1996 and 2001, and then increased from 50% in 2001 to 55% in 2007. This alarming rate of increase in poverty in the rural area requires a greater attention of the government which should initiate efficient poverty reduction programs. The study also reveals that human and social resources, as well as physical capital, household size, the occupation and the residence region are the main determinants of poverty. Lastly, the decomposition of changes in poverty into growth and redistribution components indicates that during the sub-period 1996-2001, growth and redistribution contributed to the reduction of urban poverty, whereas redistribution almost did not have any impact on the reduction of rural poverty. On the other hand, over the sub-period 2001-2007, the reduction of poverty in the urban area is mainly explained by the effects of growth and redistribution, while in the rural area, the increase in poverty is essentially explained by the unfavourable growth effect. The implications of the results of the study for a pro-poor policy are discussed.

Highlights

In reaction to a severe economic crisis1 characterized by a negative economic growth rate of -2.3% over the period 1987-19942, Cameroonian authorities were forced towards the end of the 1980s and at the beginning of the following decade, to adopt and apply the principles of a healthy management of the economy by implementing a series of economic recovery policy measures, which mainly included stabilization and economic reforms, as well as structural adjustment programs aiming at the liberalization of the economy, to which were added the practice of good governance as one of the main conditionalities for receiving international financial assistance
We model the determinants of poverty levels by taking the logarithm of real household consumption expenditures per adult equivalent divided by the poverty line, which we regress on a certain number of explanatory variables characteristic of the household and the community in which households reside11
One question remains without an answer: how many poor people benefited from the economic growth that occurred during the period 1996-2007 and during the sub-periods 1996-2001 and 2001-2007? To answer this question, we decompose poverty reduction into two components, one due to growth and the other to redistribution

Summary

Introduction

In reaction to a severe economic crisis characterized by a negative economic growth rate of -2.3% over the period 1987-19942, Cameroonian authorities were forced towards the end of the 1980s and at the beginning of the following decade, to adopt and apply the principles of a healthy management of the economy by implementing a series of economic recovery policy measures, which mainly included stabilization and economic reforms, as well as structural adjustment programs aiming at the liberalization of the economy, to which were added the practice of good governance as one of the main conditionalities for receiving international financial assistance. From an empirical point of view, it can be shown that consumption expenditures are measured with greater precision than incomes, above all in the case where a large share of these incomes comes from the informal sector of the economy This argument is pertinent in a developing country like Cameroon where, as in the case of the ECAM1 survey which is one of the databases used in this study, 8.6 % of the households declared an income that was higher than expenditures! Consumption is less volatile than income, and it may be a better indicator of the actual living standard of a household In this analysis we will take account of the differences in the size and composition of different households, and as a consequence, we will use household expenditure per adult equivalent as a welfare measure (Deaton and Muellbauer (1980)). For more details concerning the calculations of these poverty thresholds, see INS (2002), INS (2008), and Fambon et alii (2014)

The Measure of Poverty

The Data

Decomposition of the Reduction of Poverty

Findings

Conclusion and Policy