Exploring Foreign Direct Investments in Developing African Countries: Their Effects on the Economic Growth in Cameroon (2006-2011)

Abstract

This study explores Foreign Direct Investment (FDI) and its effects on the economic growth in Cameroon within the period 2006-2011. The purpose of this study is to understand the reason why increased FDI had not led to more economic growth in Cameroon. Aghion’s endogeneity growth theory was used as a guide to data collection and analysis. Research data were collected from 20 investment managers with close relationships with Cameroon. The participants included five from each subgroup of energy, health care, technology, and financial institutions, in the United States. The study participants expressed strong commitment towards economic growth in Cameroon. The responses from the study participants showed inconsistency with the literature review and the belief that FDI generates economic growth in the developing countries. Moreover, the respondents reported bureaucracy and corruption as the possible challenges facing the economic growth in Cameroon. The research participants believed that eco-political factors directly affect the economic growth in Cameroon. Policy implications and recommendations for future studies were stated. It was recommended that the country must improve its financial market by removing financial restraints that hinder Cameroon firms from getting into export markets. In addition, the Cameroon leaders should focus on improving human capital through training and development. Training methods must be improved; a comprehensive plan for training and development must be implemented. Moreover, Cameroon leaders should ensure that their attention to FDI does not overshadow domestic small businesses. The study established that although there were positive relationships between FDI and economic growth in the developing countries such as Cameroon, the findings were inconclusive. Future research should further study the effects of FDI on economic growth using endogeneity growth theory in multi developing countries to determine if the study findings from this dissertation can be supported in other settings.

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Akwaowo, E. (2013) Exploring Foreign Direct Investments in Developing African Countries: Their Effects on the Economic Growth in Cameroon (2006-2011). iBusiness, 5, 18-35. doi: 10.4236/ib.2013.51003.

Conflicts of Interest

The authors declare no conflicts of interest.

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