AN INVESTIGATION INTO THE CAUSES AND EFFECT OF MISMANAGEMENT AND EMBEZZLEMENT OF PUBLIC FUNDS IN CAMEROON

CHAPTER ONE

INTRODUCTION

Background of the study 

Financial embezzlement is receiving global attention, since many countries are making intentional and substantial efforts to improve the utilisation of public monies. Financial embezzlement is a worldwide problem that has a substantial social effect, especially on impoverished nations. The term "financial misappropriation or embezzlement" denotes the deliberate manipulation of financial accounts with the intention of creating a false impression of wealth for a government or organisation (Agbor, 2017). Financial misappropriation refers to the deliberate and significant fabrication of financial statements or disclosures, or engaging in criminal activities that directly affect financial statements or declarations. Consequently, rising economies like Nigeria's public sector have encountered this situation. The misallocation of public money is linked to the misuse and potential depletion of finances, which raises questions over the integrity of individuals responsible for managing the funds (Abada and Onyia, 2020). Misappropriation refers to the deliberate misuse of funds. Embezzlement refers to the misappropriation of finances and other assets that were originally earmarked for a certain official purpose, but are instead used for personal gain or for a purpose other than their intended use. This is an illicit disbursement of funds or other resources for personal gain. Misappropriation is the gravest kind of fraud in the public sector, since individuals deliberately drain public monies for personal benefit without considering the repercussions. This type of fraud is carried out through various methods, including the direct misappropriation of business or government assets for personal gain, the payment of salaries to fictitious employees, the unauthorised use of public funds or assets, and the payment of funds against checks that have not been cleared, among others (Agbor, 2021).  The issue of financial mismanagement in Cameroons public sector has been a persistent problem since the oil boom years. During this time, inadequate control systems were in place, leading to various vulnerabilities that facilitated and prolonged corrupt actions. This is exacerbated by the near-total absence of the notion and principles of accountability in the conduct of the nation's governmental institutions. Government parastatals are typically established to implement economic or social development initiatives or to provide essential services to the public (Bakare, 2018). Although it is recognized that government parastatals have failed to meet public expectations due to misappropriation and embezzlement of funds, various solutions have been proposed to address this persistent problem. Mismanagement of public funds has significant repercussions for both the public and private sectors. Instances of misappropriation often lead to severe economic consequences, including the loss of funds, assets, and revenue earmarked for current and capital expenditures (Ingham, 2021). Furthermore, it results in a shortage of funds for the development of socioeconomic infrastructure for the public. The misuse and corruption of public monies in Cameroon led to an economic downturn, prompting the government to implement stringent measures. Embezzlement of public money hinders the provision of vital social and economic infrastructure, as well as the financial development of the nation. While there is some existing literature on corruption in the public sector, none of it has explicitly focused on the mishandling of finances in parastatals. The idea to do this study arose from the existence of this gap, with the aim of investigating the causes and effect of mismanagement and embezzlement of public funds in Cameroon.

1.2 Statement of the problem 

The mismanagement and embezzlement of public funds pose a formidable and enduring obstacle to the economic development and governance of the nation. Notwithstanding the diligent endeavors undertaken by the government to tackle the pervasive issue of corruption, it is disheartening to observe that the nation persistently occupies a position of low standing on various internationally recognized corruption indices, as reported by Transparency International in the year 2021. The aforementioned pervasive issue serves to undermine the overall effectiveness of public institutions, thereby impeding the efficient delivery of crucial services such as healthcare, education, and infrastructure to the populace of Cameroon. The occurrence of mismanagement and embezzlement frequently arises as a consequence of systemic elements, encompassing feeble governance structures, insufficient oversight mechanisms, and a dearth of transparency and accountability within the public sector (World Bank, 2020). The aforementioned challenges are further compounded by the presence of political corruption and patronage networks, thereby engendering favorable circumstances for the misappropriation of public funds for personal enrichment (Kwenda, 2021). From a societal perspective, it is important to acknowledge that the misallocation of resources has the potential to exacerbate existing inequalities and undermine the public's confidence in governmental establishments. Furthermore, it is worth noting that the ramifications of these aforementioned issues transcend the borders of Cameroon, thereby exerting an influence on the intricate web of international relations and the allocation of foreign aid (Lumumba, 2021). Hence, the study investigate the causes and effect of mismanagement and embezzlement of public funds in Cameroon

1.3 Objective of the study 

The broad objective of the study is to investigate the causes and effect of mismanagement and embezzlement of public funds in Cameroon. The specific objectives is as follows

Investigate the factors responsible for mismanagement and embezzlement of public funds in Cameroon. 

Evaluate the impact of mismanagement and embezzlement of public funds on the delivery of essential public services in Cameroon

Propose recommendations for preventing the mismanagement and embezzlement of public funds in Cameroon.

1.4 Research Questions 

The following questions have been prepared for the following

What are the factors responsible for mismanagement and embezzlement of public funds in Cameroon?

What is the impact of mismanagement and embezzlement of public funds on the delivery of essential public services in Cameroon?

What are the recommendations for preventing the mismanagement and embezzlement of public funds in Cameroon?

1.5 Significance of the study

The importance of this research cannot be overstated. This study will include detailed information about the organizational structure and management of parastatals. It will also analyse the impact of financing, embezzlement, and mismanagement on the efficiency of parastatals. The study's findings will provide stakeholders with reliable information to develop actions that may effectively address the issue. The findings of the study will also serve as a reminder to the current administration of the need of persisting in the battle against corruption and ensuring that the established commissions continue to effectively address anomalies in the public sector. Ultimately, this study will contribute to the existing empirical literature and serve as a valuable reference for academics and students interested in pursuing additional research in relevant topics.

1.6 Scope of the study 

The study focuses on  the causes and effect of mismanagement and embezzlement of public funds in Cameroon. Empirically, the study will investigate the factors responsible for mismanagement and embezzlement of public funds in Cameroon,  evaluate the impact of mismanagement and embezzlement of public funds on the delivery of essential public services in Cameroon and propose recommendations for preventing the mismanagement and embezzlement of public funds in Cameroon.

1.7 Limitations of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection (internet, questionnaire, and interview), which is why the researcher resorted to a moderate choice of sample size. More so, the researcher will simultaneously engage in this study with other academic work. As a result, the amount of time spent on research will be reduced.

1.8 Definition of terms 

Mismanagement: Mismanagement refers to the improper handling or administration of public funds or resources. 

Embezzlement: Embezzlement is the act of dishonestly or illegally appropriating funds or assets entrusted to an individual, typically by virtue of their position or role in an organization. 

Public Funds: Public funds are monetary resources collected and managed by the government, primarily through taxation and other revenue sources, for the purpose of providing public services and goods.