Fiscal policy and industrial sector production in Cameroon

Politique budgétaire et production du secteur industriel au Cameroun

Louis Henri Ngah Ntiga (), Olivier Bouya () and Tanankem Voufo Belmondo ()
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Louis Henri Ngah Ntiga: DIRECTION RECHERCHE - Direction Recherche - UTC - Université de Technologie de Compiègne
Olivier Bouya: DIRECTION RECHERCHE - Direction Recherche - UTC - Université de Technologie de Compiègne
Tanankem Voufo Belmondo: DIRECTION RECHERCHE - Direction Recherche - UTC - Université de Technologie de Compiègne

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Abstract: In 2020, Cameroon began the implementation of the second phase of its long run development strategy, the National Development Strategy 2020-2030 (NDS 30). Development Strategy 2020-2030 (NDS 30). The NDS 30 aims at the structural transformation of the economy. One of the tools that would stimulate industrial production is fiscal policy, which, thanks to its instruments, would favour industrial development in Cameroon. Thus, this work aims to analyse the effect of fiscal policy on the production of the industrial sector. To achieve this, a To achieve this, a vector error correction model was used after the chronicles were all integrated all integrated to the same order. The Johansen (1987) test shows that there is a cointegrating relationship between the series and the estimation of the VECM model reveals a short and long run relationship between industrial production and fiscal policy. The results show that tax revenues once delayed The results show that tax revenues, once delayed, have a positive effect on industrial production, whereas the same industrial production, once delayed, has a negative effect in the short run. Thus, governments Thus, governments should direct tax revenues much more towards the industrial sector and ensure that industrial value added is used for investment purposes.

Date: 2023-06-12
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