The Impact of Commodity Price shocks on CEMAC Economies

The study sought to bring out the induced effect, being caused by the volatility in commodity prices, and measure what impact it will have on the GDP of Cameroon, Gabon, Congo Brazzaville and Chad. The abundance of resource rich minerals and strong cash crop output, from these nations have been of a mixed blessing. Pro-cyclical government polices, drawn from prevailing commodity prices, formed the basis of every national budget since independence. The wealth has not been directed at securing holistic economic independence and growth. Rather, we see a surge in public investments, been executed by debt, on the hope of a persistent windfall from commodity prices. This has lead to a repeat of the same economic practices from the independence era which lead to the pilling of non-productive debt. The study found that the economies of Congo, Gabon and Chad are very susceptible to any major variations in the price of Oil. A divestiture from Oil, needs to be done urgently. The economies should focus on the benefits of non-resource oriented revenue such as tourism, banking services and agriculture.