THE IMPACT OF THE POLICIES OF INTERNATIONAL FINANCIAL INSTITUTIONS ON CEMAC MEMBER STATES: THE CASE OF THE POLICIES OF THE WORLD BANK ON CAMEROON

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the study

The Central African Economic and Monetary Community (CEMAC) is a regional economic organization composed of six member states: Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, and Gabon. CEMAC member states have been subject to economic policies and programs set by international financial institutions (IFIs) such as the International Monetary Fund (IMF) and the World Bank. Nguena, C. L., & Fambon, S. (2019).

The IMF and the World Bank have been actively involved in providing loans, technical assistance, and policy recommendations to CEMAC member states since the 1980s. The main objective of the IFIs in CEMAC has been to support economic growth and development by promoting macroeconomic stability, reducing poverty, and enhancing competitiveness through structural reforms.

However, the impact of the policies of the IFIs on CEMAC member states has been a topic of debate among scholars, policymakers, and civil society organizations. While some argue that the policies of the IFIs have contributed to economic growth and stability, others have criticized them for their negative impact on social welfare, economic development, and sovereignty.

For instance, some studies suggest that IMF and World Bank policies have led to reduced public investment and social spending, which may have negative consequences for education, health, and social welfare. Additionally, some argue that the IFIs’ focus on fiscal austerity and deregulation has led to an increase in income inequality, which could exacerbate social tensions and political instability. Tsafack, N. P., & Tita, M. B. (2016)

On the other hand, some scholars argue that the IFIs have played a crucial role in promoting economic stability and growth in CEMAC member states. For example, some studies suggest that IMF programs have led to improved fiscal and monetary policies, increased foreign investment, and enhanced economic competitiveness. Iyoha, M. A. (2004). Overall, the impact of the policies of IFIs on CEMAC member states remains a complex and contested issue. It requires a detailed and comprehensive analysis of the economic, social, and political factors involved.

The Central African Economic and Monetary Community (CEMAC) is a regional economic organization composed of six member states, including Cameroon. Since the 1980s, international financial institutions (IFIs) such as the World Bank have been actively involved in providing loans, technical assistance, and policy recommendations to CEMAC member states, including Cameroon. The main objective of the World Bank in Cameroon has been to support economic growth and development by promoting macroeconomic stability, reducing poverty, and enhancing competitiveness through structural reforms (World Bank, 2021).

However, the impact of the World Bank’s policies on Cameroon has been a topic of debate among scholars, policymakers, and civil society organizations. While some argue that the World Bank’s policies have contributed to economic growth and stability, others have criticized them for their negative impact on social welfare, economic development, and sovereignty.

Some studies suggest that the World Bank’s policies have led to reduced public investment and social spending in Cameroon, which may have negative consequences for education, health, and social welfare (Tsafack & Tita, 2016). Additionally, some argue that the World Bank’s focus on fiscal austerity and deregulation has led to an increase in income inequality, which could exacerbate social tensions and political instability (Iyoha, 2004).

On the other hand, some scholars argue that the World Bank has played a crucial role in promoting economic stability and growth in Cameroon. For example, some studies suggest that World Bank programs have led to improved fiscal and monetary policies, increased foreign investment, and enhanced economic competitiveness (Nguena & Fambon, 2019).

Given the complexity and contested nature of the impact of the World Bank’s policies on Cameroon, there is a need for a detailed and comprehensive analysis of the economic, social, and political factors involved. This study aims to provide such an analysis by examining the impact of the World Bank’s policies on Cameroon.

1.2 Statement of the problem

The World Bank, as an international financial institution, plays a significant role in shaping economic policies in developing countries. Cameroon, as a member state of the Central African Economic and Monetary Community (CEMAC), has been a recipient of World Bank support through various policy prescriptions and financing arrangements. However, the impact of these policies on Cameroon’s economy, growth, and development remains unclear. Therefore, the problem statement of this thesis is to investigate the policies of the World Bank on Cameroon and to evaluate their impact on economic growth, development, poverty reduction, and social welfare. Additionally, the study will examine the alignment of World Bank policies with the development priorities and needs of Cameroon and other CEMAC member states. The study will provide insights into the effectiveness of international financial institution policies on developing countries and their potential impact on achieving sustainable development goals.

`1.3 Research Questions

1.3.1 Main Research question

What is the impact of the policies of international financial institutions on CEMAC member states: the case of the policies of the world bank on Cameroon

1.3.2 Specific Research objectives