Investigating the role of agriculture, industry and foreign direct Investment in Cameroon’s economic growth

Abstract

The role of entrepreneurship in economic growth cannot be overemphasized. Entrepreneurship has the potentials of improving upon economic growth in Cameroon and for this to be possible, an enabling environment should be created to develop entrepreneurial activities for increased economic growth. Using value added by the agricultural and industrial sectors, and foreign direct investment (FDI), this study sought to assess the role of entrepreneurship on economic growth in Cameroon between 1975 and 2014. The coefficients (Ai) were estimated using the Ordinary Least Squares (OLS) techniques because of its BLUE (Best Linear Unbiased Estimator) property. The statistical (1 st order) test was used to evaluate the combined influence of the independent variables. The coefficient of multiple determinations (adjusted R) was also used to determine the level of reliability of independent variables while the F-Statistics test was used to test for reliability of the estimates. The t-statistics was further used to test for the significance of the individual independent estimate. Using the statistical (1 st order) test at 1%, 5% and 10% levels of significance, the results reveal that the coefficients of the value added by the agricultural sector, industrial sectors and FDI were all positive, indicating that entrepreneurial activities have the potential to improve upon economic growth in Cameroon. It was also observed that at 1%, 5% and 10% levels of significance, there is a positive significant value added by entrepreneurship in the industrial sector to economic growth, while the agricultural sector and FDI had no significant value added by entrepreneurship to economic growth in Cameroon at all three levels of significance. The study recommended, among others, that since FDI results in high profit repatriation and capital flight in Cameroon, it would be necessary for the government to put in place laws that encourage a 50/50 equity between domestic and foreign entrepreneurship. Also, Value added agriculture should be encourage most especially in the areas of processing and preservation by building the capacities of those along these supply chain the use of state of the arts machines, processing and preservation techniques. This will lead to new emerging agro-enterprises in Cameroon.