Despite the increased popularity of development aid flows from rich nations to poorer ones in the form of Official Development Assistance (ODA), rampant poverty still prevails in the recipient nations. This perhaps explains the lingering debate on the effectiveness of ODA in curbing poverty. Based on Cameroon, this study aims to ascertain if ODA can be relied upon as a tool to fight poverty. The researcher seeks to determine if ODA disbursed to Cameroon has resulted in poverty alleviation among the impoverished from 1980 to 2014, be it directly or indirectly. To this effect, the first research question looks at what the possible causes of poverty in Cameroon are. The second research question dwells on the pattern of ODA to Cameroon over the study period from 1980 to 2014. The final research question seeks to determine the Cameroonian poverty levels over the same period. The definition of poverty in terms of the Human Development Index (HDI) and its three poverty determinants as utilized by the United Nations Development Programme (UNDP), is adopted as a theoretical base for this research. These determinants of poverty are life expectancy at birth, mean years of schooling, and Gross National Income (GNI) per capita. While the literature review is utilised to outline the on-going debate on the effects of ODA on economic growth and poverty alleviation, it equally provides possible causes of poverty in Cameroon. These include the prevalence of factors such as poor governance, the swindling of public funds without fear, the normalisation of bribes in return for public services, the lack of decentralized administrative and civil services, and the disproportionate distribution of state earnings. Meanwhile, secondary published data sourced from reputable multilateral bodies is used to determine the trend of ODA to Cameroon over the period from 1980 to 2014. This is then correlated with poverty figures over the same period as expressed by the three human development factors or poverty determinants. The research adopts a quantitative approach as correlations and regressions of obtained secondary data are made used of. The results of the correlations reveal that ODA may not be relied upon as a tool for alleviating poverty in Cameroon due to the statistically insignificant relationships it seems to display with all three poverty determinants. The regression results show on the one hand that ODA has insignificant relationships with life expectancy at birth and mean years of schooling, while on the other hand, ODA and GNI per capita display an inverse relationship that is judged to be statistically significant. High ODA figures can therefore be associated with lower GNI per capita values in Cameroon, based on this study. This means that ODA can be assumed to negatively affect the real income of Cameroonians. A reduction in real income might equally lead to a reduced potential to afford basic necessities like healthcare, schooling and housing. As these essentials are not provided for free in Cameroon, this reduced real income may further be held responsible for an overall deterioration of the quality of life. Based on the above findings, the researcher recommends that aid recipient governments put in place supportive systems and strong institutions that are void of corruption and unnecessary bureaucracy so as to better benefit from foreign aid inflows. African countries like Cameroon also need to develop their internal resources and use them to finance and promote their own growth instead of rely on donor funding with diminishing returns. Likewise, the government needs to improve its level of human development through diverting more funds towards developing and facilitating the poor’s access to the country’s education, healthcare, road network and basic amenities like water and sanitation. Finally, inflows in the form of loans rather than grants can better be utilized to promote positive economic growth. While loans are mostly diverted to productive activities, grants may promote dependency, rent-seeking behaviour and bureaucracy. This study is one of the few that relies on country-level data. Most existing studies on foreign aid and its related effects on poverty alleviation were conducted using cross-country data.

The causal relationship between financial development and economic growth is a controversial issue. For developing countries, empirical studies have provided mixed result. This study seeks to empirically explore the relationship and the causal link between financial development and economic growth in two sub-Saharan African countries between 1970 and 2006. The empirical investigation is carried out using time methods and the five most commonly used indicators of financial development in the literature. However, the causal relationship was carried out using two different methods which are the autoregressive distributed lag bounds testing (ARDL) and the vector error correction model (VECM). Using this above methodology the study first found that in both countries there is a positive and long-term relationship between all the indicators of financial development and economic growth which was proxied by the real per capita GDP. With respect to the causality test, the two methods used provide mixed results especially in South Africa. In Cameroon the study found that financial development causes economic growth using the two methods, whereas in South Africa economic growth causes financial development when the VECM method is used, while there is an independence relationship between the two variables in South Africa when using ARDL. / Economics / M.Comm. (Economics)

The causal relationship between financial development and economic growth is a controversial issue. For developing countries, empirical studies have provided mixed result. This study seeks to empirically explore the relationship and the causal link between financial development and economic growth in two sub-Saharan African countries between 1970 and 2006. The empirical investigation is carried out using time methods and the five most commonly used indicators of financial development in the literature. However, the causal relationship was carried out using two different methods which are the autoregressive distributed lag bounds testing (ARDL) and the vector error correction model (VECM). Using this above methodology the study first found that in both countries there is a positive and long-term relationship between all the indicators of financial development and economic growth which was proxied by the real per capita GDP. With respect to the causality test, the two methods used provide mixed results especially in South Africa. In Cameroon the study found that financial development causes economic growth using the two methods, whereas in South Africa economic growth causes financial development when the VECM method is used, while there is an independence relationship between the two variables in South Africa when using ARDL. / Economics / M.Comm. (Economics)