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External DEBT And Capital Flight In Cameroon: Bounds Testing Approach

External DEBT And Capital Flight In Cameroon: Bounds Testing Approach

DATE PUBLISHED
Published March 24, 2020
SECTION
Articles

Author Details

Abstract

This paper analyses the relationship between external debt and capital flight in Cameroon for the period 1970-2010. Based on the limits of the approach of Johansen cointegration, we use the autoregressive Distributed lag (ARDL) methodology of cointegration of Pesaran and al. (2001) to determine the relationship between external debt and capital flight. The data used come from the Autonomous Sinking Fund of Cameroon, World Development Indicator of the World Bank and the base of Boyce and Ndikumana (2012). Our results show that in the short term, the rise of a dollar in external debt leads to an increase of 54 cents of capital flight; a situation which gradually decreases over time. Moreover, the capital flight of Cameroon is caused by official development assistance, trade openness and the rent from natural resources, particularly oil rents.

Keywords

Cameroon; capital flight; Bounds testing approach; external debt

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