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Monday, August 30, 2010

Cameroon Gov't Slashing Budget By More Than 50%?

It is being reported by a newspaper in Cameroon that the government plans to slash the budget by over 50%? If this is true, then, it is devastation beyond measure. Cameroon will never come out of its economic crisis. This is especially disappointing given that other African countries seem to be doing better even taking into consideration the recent economic shock. About twenty years ago, or so, Cameroon devalued its currency in attempt at addressing a declining economy. In spite of this, the economy continued its free fall. Now, the budget is being cut by half, thus abandoning even the paltry projects the government had hoped to put in place. Considering that Cameroon's economy is being sustained by government expenditure, cutting the budget will  considerably undermine growth as the downsizing of the civil service did about two decades ago. If this story is true, then it will be a disaster for the country. This situation might be ameliorated if the government could liberalize the economy. However, the government has such a stranglehold on the economy that the private sector hardly flourishes. Cutting government budget is thus a double blow.

1 comment:

Unknown said...

wow I hope that doesn't happen. although government spending is not a sustainable method of economic growth, cutting back services now will only increase the severity of the crisis by depressing private sector demand.

great blog Dr. Ngong!