Effects of Government Spending on Private Investments in Cameroon: Case of Mezam Division

In less developed countries (LDCs) like Cameroon, the fundamental challenges in the economy are how to increase output in the long run, and to improve standards of living to boost economic, political, and social conditions. Cameroon known for her perpetual borrowing attitude which is aimed at financing domestic projects has a contrary situation as they exist an invest proportional ratio between domestic project to amount borrowed hence constitute a research problem. This study is, therefore, the goal at determining the impact of government expenditure on roads/infrastructure, health, education, defence, and security, on private investments in Mezam Division, North West Region of Cameroon. To achieve the mentioned aims, primary data was collected from 200 private investors and analysed with the use of descriptive statistics tools: Maximum Likelihood Estimation method (MLE) and the multinomial logistic regression technique. The Multinomial Logistic analysis reveals that government spending on education significantly affects private investment at a 1% confidence level in a similar situation with government spending on health facilities. We, therefore, recommend the government to encourage the educational and health sector by increasing the funding allocated to these sectors. Besides, the government should also limit the importation of basic commodities, and improve investment in the country’s transport sector, to cut down the cost of doing business. Keywords; Private Investments, Government expenditure, Domestic project, Cameroon.