Cameroon’s FCFA 700bln debt may jeopardize 2017 economic drive

With a heavy debt burden that will rise to over FCFA 700 billion at the end of 2016, Cameroon will use a huge chunk of its 2017 budget for debt servicing and payment. The debt burden will rise to FCF 722 billion by December. This means that resources for the execution of certain projects could be reduced to swell the debt payment.

Officials of the Ministry of Finance and the Ministry of Economy, Planning and Regional Development, made the projection recently in Yaounde while elaborating the main contours of the 2017 budget.

Speaking at the occasion, the Minister Delegate at the Ministry of Finance in charge of the budget, Paul Che Elung, said the payment of debts will be one of the main burdens of the 2017 budget.

Going by the government official, the 2017 burden will be heavier on the State because the State wage bill will increase. Between 2014 and 2015, the State wage bill increased from FCFA 299 to FCFA 510 billion.

He urged the participants preparing the projection of the 2017 budget to take in to consideration the macroeconomic stakes and to ensure efficiency in the allocation of resources to the various segments of national life.

The national and international security challenges, the fight against Boko Haram and the continuous dwindling of petrol prices in the world market are some of the stakes of the 2017 budget.

Again, the 2017 budget will be asphyxiated by a drastic drop in custom revenue following the economic partnership agreement signed between the Government of Cameroon and the European Union, EU. The Economic Partnership Agreement that goes operational this August provides for suppression of custom duties on goods from EU countries.

The budget is also being tailored at a time Government is bidding to continue executing structural projects in Cameroon. Preparation for the hosting of the 2019 AFCON is also at the forefront in the elaboration of the budget. It will also provide for the acceleration of the implementation of the three year Emergency Plan. After the authorities would design the main pillars of the 2017 budget, the President of the Republic will prescribe guidelines as to how the budgetary projections must look like.

The authorities are elaborating on the budget at a time where the country’s economy is facing stunted growth. Although it was projected in the 2016 budget that the Gross Domestic Product, GDP, growth at 5.5 percent, the employers union GICAM, revealed recently in Douala that growth rate is shrinking back to 4.2 percent this year.

The challenges in the national and international environment are responsible for such a slump. Observers hold that for Cameroon to get out of the situation, the country needs to accelerate the creation of small and medium size enterprises that will in turn create riches. Experts hold that administrative bottlenecks and corruption are still some of the ills that ail the business climate in Cameroon.