Cameroon: “State budget under pressure,” says IMF

Following its mission in Cameroon on May 8, 2014, the International Monetary Fund (IMF) mission led by Mario de Zamaroczy, strongly criticised the gap identified between the State’s “rare” revenue and “daring” expenditure which is putting the “the budget under pressure.

The budget needs to be rethought in order to increase revenue and, in light of the scarce resources, there needs to be some prioritisation of expenditure,” stated the IMF chef de mission.

For the IMF, the main budgetary elements involved are State grants for oil products and grants to public sector companies. For at least two years, the IMF has consistently recommended to the government that it do away with the oil product consumption grant which rose from 120 billion FCfa in 2010 to 420 billion FCfa in 2013.

The said grant is expected to climb to 450 billion FCfa in 2014 though only 220 billion FCfa have been budgeted this year. With regards to public companies, in its recent reports, the Bretton Woods institution noted that they have had “meagre results” and had advised the Cameroonian government to subject the issuance of these grants to the strictest adherence to “rigorous guidelines”.

According to the IMF chef de mission to Cameroon, “what is worrying is the way in which the country’s budget deficit (projected at 5.5% of GDP in 2014 and 5% of GDP in 2015 by the IMF) is being financed.

That is to say that the State has been accruing debt to address the deficit even though it is true that these funds are primarily used for public sector investments.” Mario de Zamaroczy believes that, in the long term, “the State will eventually start to make late payments to providers.”