Sectoral Labour Productivity Convergence in Cameroon: Evidence and Policy Implications

Purpose: The Cameroonian economy has experienced multiple crises since the 1970s, resulting in slow labour productivity growth and persistent income and opportunity disparities. This study investigates productivity movements across the three formal sectors; agriculture, industry, and service, as well as the aggregate economy, between 1970 and 2023. Specifically, it examines the presence of labour productivity convergence or divergence, identifies their sources and evaluates how productivity growth is influenced by key determinants, with the goal of informing policies to reduce poverty and improve living standards particularly for low-income populations. Methodology: A parametric approach employing ordinary least squares techniques are used to test for the presence of labour productivity convergence or divergence, using the Beta and Sigma-convergence tests. A quantile regression approach is conducted to properly reveal the labour productivity dynamics within the various sectors. A Labour productivity decomposition technique is conducted to identify sources of convergences or divergence in productivity in the economy. Findings: The study finds evidence of sigma-convergence between sectors and the aggregate economy, driven mainly by industry and service. No significant Beta-convergence is observed within sectors or at the aggregate level. Industry and services contribute most to labour productivity growth, with an annual convergence speed of 12.2%, reflecting the combined effects of worker reallocation and productivity gains. Estimated times to halve productivity gaps are 8 years for industry, 20 years for services and 42 years for agriculture, highlighting persistent structural imbalances. Unique Contribution to Theory, Policy and Practice: The study emphasizes the need for balanced sectoral development through coordinated policies, improved institutional quality, and substantial investment in human capital. Targeted interventions across agriculture, industry and services are essential to accelerate structural transformation, reduce income disparities, and achieve sustainable economic growth in Cameroon. Keywords: Sectoral Labour Productivity, Economy Growth And Development, Technology, Employment