Fiscal Sustainability, Public Investment, and Growth in Natural Resource-Rich, Low-Income Countries [electronic resource] : The Case of Cameroon / Issouf Samaké.
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TextSeries: IMF Working Papers; Working Paper ; No. 13/144Publication details: Washington, D.C. : International Monetary Fund, 2013Description: 1 online resource (35 p.)ISBN: 1484318250 :ISSN: 1018-5941Subject(s): Bayesian Analysis | DSGE | Forecasting and Simulation | Government Spending | Growth | Low-Income Countries | CameroonAdditional physical formats: Print Version:: Fiscal Sustainability, Public Investment, and Growth in Natural Resource-Rich, Low-Income Countries : The Case of CameroonOnline resources: IMF e-Library | IMF Book Store Abstract: This paper assesses the implications of the use of oil revenue for public investment on growth and fiscal sustainability in Cameroon. We develop a dynamic stochastic general equilibrium model to analyze the effects of such investment on growth and on the path of key fiscal indicators, such as the non-oil primary deficit and public debt. Policy scenarios show that Cameroon's large infrastructural needs and relatively low current debt levels could justify a temporary deviation from traditional policy advice that suggests saving part of the oil revenue to smooth expenditure over time. Model simulations show that a relatively high degree of efficiency of public investment is needed for scaled-up public investment to make a significant contribution to growth, while maintaining fiscal sustainability.
This paper assesses the implications of the use of oil revenue for public investment on growth and fiscal sustainability in Cameroon. We develop a dynamic stochastic general equilibrium model to analyze the effects of such investment on growth and on the path of key fiscal indicators, such as the non-oil primary deficit and public debt. Policy scenarios show that Cameroon's large infrastructural needs and relatively low current debt levels could justify a temporary deviation from traditional policy advice that suggests saving part of the oil revenue to smooth expenditure over time. Model simulations show that a relatively high degree of efficiency of public investment is needed for scaled-up public investment to make a significant contribution to growth, while maintaining fiscal sustainability.
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