Poverty Reduction in Cameroon, 1996-2001: The Role of Growth and Income Redistribution

This paper appeals to the Shapley Value decomposition rule to account for the retreat in the FGT class of poverty measures in Cameroon between 1996 and 2001. In particular, the paper examines the evolution of poverty in Cameroon, simulates budgetary outlays necessary to eradicate poverty assuming perfect targeting, and decomposes changes in poverty into growth and redistribution components. The ECAM I and ECAM II household consumption surveys collected by the Governments Statistics Office together with the software DAD4.4 were used to generate the results. The incidence, depth and severity of poverty retreated significantly the period under study. The growth component contributed significantly more in explaining the fall in levels of poverty than the redistribution component in both rural and urban areas. The overall situation however clouds regional tendencies, which attribute varying importance to the two factors. The indication, however, clearly portrays the important role to be attributed to growth if long term poverty reduction is valued high in the policy menu as articulated in Cameroon’s Poverty Reduction Strategy Paper. The government needs to allocate more budgetary outlays in rural areas to fill the income gap relative to the poverty line. In spite of the importance of growth in eradicating poverty, it will be much more effective if it benefits the poor disproportionately.