The Impact of Power Supply on the Exports of Services in Cameroon

Abstract

Power deficits constitute a crucial problem affecting the production and exports of goods and services in a modern economy. This study attempts to evaluate the impact of power deficiency on the exports of services in Cameroon. Therefore, a modified Cobb-Douglas production function and selected data retrieved from the 2018 World Development Indicators dataset for the period 1972-2017 were used in the econometric estimations. The results depict that power deficits have effects on the country’s export services both in the short- and long-terms as a percentage point hike in power supply triggers an increase in the exports of services by 0.69 per cent in the short-run and 0.43 per cent in the long-run. Moreover, a one-point decline in Foreign Direct Investment causes the exports of services to decline by 0.02 per cent in the short-term and 0.07 per cent in the long-term. Overall, the results imply that electricity supply is a critical input to boost the exports of services. Thus, it is recommended that the government of Cameroon should eradicate the issue of power supply to its economy by stepping up investments in the energy sector. Key words: Electricity Supply; Exports; Services; Cameroon DOI: 10.7176/DCS/12-6-05 Publication date: June 30 th 2022