Abstract

Every nation requires a certain amount of investment to reach a particular degree of growth. Investment and economic growth are topics of intense debate in developing countries today. This study investigates the effect of foreign direct investment on economic growth in Cameroon. Using the ordinary least squares (OLS) estimation technique, the data covered a period from 1985 to 2022 collected from the world development indicators (WDI). The finding reveals that there is a positive and significant effect between foreign direct investment (FDI) and Cameroonian GDP; this implies that a unit increase in FDI leads to increased economic growth. A negative correlation has been observed between economic growth and inflation, suggesting that a rise in inflation generally leads to a decline in economic growth. Furthermore, trade openness (TOP) and economic growth have a statistically significant positive association, suggesting that Cameroon's economic growth may rise due to greater global trade involvement. These findings have important policy implications. The Cameroonian government should improve infrastructure, guarantee political stability, and strengthen regulatory frameworks in order to attract foreign direct investment (FDI) and capitalize on its benefits. Since boosting international trade further spur economic growth, initiatives to encourage trade openness should also be given top priority. Trade agreements, tariff reductions, and the encouragement of export-oriented sectors.