GÖTTINGER STUDIEN ZUR ENTWICKLUNGSÖKONOMIK / GÖTTINGEN STUDIES IN DEVELOPMENT ECONOMICS Wokia-azi Ndangle Kumase Aspects of Poverty and Inequality in Cameroon Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access GÖTTINGER STUDIEN ZUR ENTWICKLUNGSÖKONOMIK / GÖTTINGEN STUDIES IN DEVELOPMENT ECONOMICS Wokia-azi Ndangle Kumase Aspects of Poverty and Inequality in Cameroon Poverty and inequality remain extremely high for Cameroon despite improvements in poverty figures between 1996 and 2001. To understand the dynamics of poverty and inequality between 1996 and 2001, this book develops a poverty and inequality profile, investigates the sources of inequality along spatial lines and simulates some policies which could be used in the reduction of poverty and inequality. The book also addresses two major sectors of the Cameroonian economy with a special focus on gender bias in agriculture and linkages between the formal and informal sector. The empirical analyses show that there are large spatial differences in poverty in Cameroon and that sources of inequality vary by location. Regardless of the definition used, the informal sector in Cameroon is extremely large but closely linked to the formal sector. The gender bias experienced by women in access to productive assets in agriculture reduces the efficiency of agricultural production. Wokia-azi Ndangle Kumase was born in Cameroon and graduated from the University of Buea in Cameroon with a Bsc. in banking and finance. He obtained a Masters degree in international economics and a PhD in development economics from the University of Göttingen. The author worked as a research assistant at the chair for development economics and consultant for the GTZ. Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Aspects of Poverty and Inequality in Cameroon Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Gettinger Studien zur Entwicklungsokonomik Gottingen Studies in Development Economics Herausgegeben van/ Edited by Hermann Sautter und/and Stephan Klasen Bd./Vol. 28 ~ PETER LANG Frankfurt am Main• Berlin• Bern• Bruxelles• New York• Oxford• Wien Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Wokia-azi Ndangle Kumase Aspects of Poverty and Inequality in Cameroon PETER LANG lnternationaler Verlag der Wissenschaften Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Bibliographic Information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data is available in the internet at <http://www.d-nb.de>. Open Access: The online version of this publication is published on www.peterlang.com and www.econstor.eu under the interna- tional Creative Commons License CC-BY 4.0. Learn more on how you can use and share this work: http://creativecommons. org/licenses/by/4.0. :$' This book is available Open Access thanks to the kind support of ZBW – Leibniz-Informationszentrum Wirtschaft. Zugl.: Gottingen, Univ. Diss., 2009 Gratefully acknowledging the support of the lbero-Amerika-lnstitut tor Wirtschaftsforschung, Gottingen. Cover illustration by courtesy of the lbero-Amerika-lnstitut tor Wirtschaftsforschung, Gottingen. D7 ISSN 1439-3395 ISBN 978-3-631-59535-0 ISBN 978-3-631-75351-4 (eBook) © Peter Lang GmbH lnternationaler Verlag der Wissenschaften Frankfurt am Main 2010 All rights reserved. All parts of this publication are protected by copyright. Any utilisation outside the strict limits of the copyright law, without the permission of the publisher, is forbidden and liable to prosecution. This applies in particular to reproductions, translations, microfilming, and storage and processing in electronic retrieval systems. www.peterlang.de Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Dedicated to Mum and Dad Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access vii Editor's Preface The importance given to poverty and inequality reduction in Cameroon can be seen in the commitments made by the Government of Cameroon to the Millennium Development Goals. Through a mix of national and multinational contributions, Cameroon has been able to make progress in some regions and sectors of its economy in reducing poverty and inequality as well as stimulating growth. However, other regions or sectors remain unattended or have not been given the same attention. This is particularly the case with the Northern regions (Extreme North, North and North West) which have poverty rates far above the national average, the agricultural sector that still suffers from low productivity due to an inefficient allocation of resources and an ever-growing informal sector that erodes into the government's tax base. Without a better understanding of the dimension of poverty and inequality and their determinants and the interdependence between the different sectors of the economy in Cameroon, it remains difficult to generate reliable policy interventions. This book contributes to analysing important issues in the fight against poverty and inequality in Cameroon from different perspectives in four different essays. In the first essay, Kumase develops a poverty and inequality profile which identifies that despite the drop in national poverty over the past decades, the northern parts of the country still suffer from extreme poverty with poverty rates far above the national average. Inequality remains very low in areas of extreme poverty. The poverty and inequality analysis also contributes to understanding why poverty persists in certain areas. Average higher education levels and higher income in certain regions correlate positively with higher per capita expenditure, thus signifying lower poverty. In the second essay, the covariance method for decomposing the Gini coefficient by factors is used to know how much of total consumption inequality is explained from a particular source. In particular, Kumase uses consumption data for Cameroon and shows that overall inequality in Cameroon is characterized in particular by the inequality in the expenditure to four major components: food, transport and communication, housing and health. The author also develops a demand system (LES) which permits him to simulate the impact of taxes and subsidies on consumption and consequently on poverty and inequality. The difference in impact observed in rural and urban households as well as between the poor and the rich shows that certain areas or sectors will require separate consideration of policy interventions. The third essay is concerned with the measurement of the size of the informal sector and its links to the formal sector. Kumase postulates in this essay that the Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access Vlll definition used when dealing with informal sector matters and should assume a central role with regards to the subsequent analysis. Using three distinct definitions of informality to measure the size of the informal sector, results indicate variations in size thus confirming his view. A multivariate analysis with demographic as well as household characteristics further indicates that the likelihood of informality varies across the three definitions used and using these results, certain generalities often used to describe the informal sector are refuted or confirmed. In the second part of this essay, Kumase is able to show using households as observation units as opposed to most studies that use enterprises and individuals as observation units, that formal sector earnings are in many ways related to informal sector earnings, occupational status and sector of employment of other household members. The author estimates the magnitude of the links between both sectors which he considers as weak and would be inefficient in implementing policies in the informal sector via the formal sector. In the fourth essay, Kumase focuses on another very important issue, precisely the question of gender bias in Cameroon and its impact on growth. There is abundant literature which estimates the negative consequences of gender gaps on growth but no such study has been carried out in Cameroon. Using data from a self-conducted survey in the cocoa growing areas of southern Cameroon, Kumase highlights the bias that exist in having access to productive assets necessary for cocoa cultivation. Productivity analyses suggest that the gender bias experienced by women in accessing productive assets in agriculture reduces the efficiency of agricultural production and this certainly has a negative impact on the growth of the entire economy which is highly dependent on agriculture. Wokia Kumase thus addresses a number of issues important for Cameroon's fight against poverty and inequality and draws the attention of all those concerned in this endeavor to the following key areas: poverty in the Northern provinces, the informal sector and gender and growth. Prof. Stephan Klasen, Phd. Gottingen, October 2009 Wokia-azi Ndangle Kumase - 978-3-631-75351-4 Downloaded from PubFactory at 01/11/2019 06:02:02AM via free access ix Author's Preface "If I have seen further than most men, it is because I stood on the shoulders ofgiants. " -Isaac Newton- This dissertation is the outcome of frustrating but often very exciting work at the Department of Economics at the University of Gottingen. Motivated at the beginning by the desire to analyse, understand and answer the multiple development problems my country (Cameroon) was and is still facing, it was an uphill task to filter my ideas into a good topic and the complexity of doing this did not help to reduce the doubts I had to ever complete the work.