Oil boom and after : structural adjustment in Cameroon

In response, the government scaled back spending in 1987/8 and undertook a structural adjustment program in 1989/90. This study uses a computable general equilibrium (CGE) model of Cameroon to examine (1) the impact of the price shocks and the adjustment program on income distribution; (2) alternative adjustment policies the government could have used; and (3) how Cameroon"s economy might have been less vulnerable to the adverse shock in terms of trade had the country adopted a different set of trade and investment policies during the oil boom. Following an introduction, Section 2 summarizes the major features of the growth process in Cameroon over the past two decades. Section 3 describes the structure of the Cameroon economy using the Gauthier-Kyle (1991) social accounting matrix, and presents the CGE model. The simulation experiments and their results are described in Section 4. Finally, Section 5 notes key impacts of the economic downturn and the government"s economic reforms: by 1989/90, real GDP had fallen 8.5% in real GDP from its peak in 1986/87 peak and real income of most household groups was at least 25% lower than in 1984/85, simulation"s base year of 1984/85. The policy implications of these simulations are examined.