The Impact of Export Trading on Unemployment in Cameroon: A Time Series Analysis

Abstract

The study examines the effect of export trading on unemployment in Cameroon, with particular emphasis on the export of raw materials and finished goods. The primary objectives are to assess the extent to which exports of raw materials and finished goods influence the unemployment situation in Cameroon. Secondary data were sourced from a range of credible national and international institutions, including the Cameroon National Institute of Statistics, the Ministry of Agriculture and Rural Development of Cameroon, the World Bank, the International Labour Organization, the African Development Bank and the World Trade Organization. The research utilises an ordinary least squares regression model to analyse the time series data, while controlling for variables such as government effectiveness, tertiary education enrolment, GDP growth rate, and inflation. The findings reveal that raw material export has a significant positive impact on unemployment, with coefficients of 0.289 for general unemployment and 0.542 for youth unemployment. This result supports the resource curse hypothesis whereby natural resource abundance is associated with lower benefits for the population as they are exported in the raw form without value addition. Conversely, finished goods export demonstrates a negative but statistically insignificant relationship with unemployment, with coefficients of −0.377 for general unemployment and −0.862 for youth unemployment. The study also highlights that government effectiveness is a significant predictor of lower unemployment, with coefficients of −6.071 for general unemployment and −9.182 for youth unemployment. In contrast, inflation is associated with higher unemployment. Based on these findings, the study recommends that Cameroon’s policymakers should pursue economic diversification, promote value-added manufacturing and enhance government effectiveness to reduce unemployment and foster sustainable economic growth. Additionally, policies designed to stimulate finished goods exports and support economic expansion such as Free Trade Agreements to reduce tariffs and improve market access, financial incentives, and streamlined clearance systems can help mitigate the adverse effects of raw materials exports on unemployment.