Abstract
This study analyses the relationship between capital flight in natural resource (oil and wood) sector and economic growth in Cameroon. Specifically, we: (1) estimate capital flight from trade in invoicing in the wood and the oil sector in Cameroon; (2) simulate the impact of this capital flight on economic growth. To achieve these objectives, methodology proposed by Boyce and Ndikumana (2012) and the Incremental Output Ratio (ICOR) are used. Data come from the World Bank and IMF. Results confirm that the natural resources sector and particularly oil is a major source of capital flight in Cameroon. If these capitals were reinvested in the economy, this would have caused DGP’s growth to increase on average by 0.21 additional points over the 1995-2001 period, about 0.54 on average for the period 2002-2012 and about 0.41 on average for the period 1995-2012. By cleaning-up the oil and wood sector through adequate governance schemes and quality institutions, the effects on economic growth is undeniable.
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