New, bright perspectives for MINFI

Minister Alamine OusmaneMey gave specific objectives and guidelines to the different administrations of his ministry which, if pursued as expected, would accelerate reforms in the public finance sector and lead the country irreversibly towards emergence by 2035.

It is now clear that the forward march of the Ministry of Finance (MINFI) in its resolute drive towards emergence by 2035 is irreversible. This had long been noticed from the unflinching efforts of the head of that ministry, AlamineOusmaneMey, and his crack team of technocrats.

Interestingly, the mission became more glaring during the 26th annual conference of MINFI which, for two days (4 to 5 February 2016), brought together officials of its central and external services under the theme “The Ministry of Finance, accelerator of Emergence towards an administration of excellence.”

During the conference, the minister’s catchphrase was “acceleration of reforms.” AlamineMey did not fail to give content to these reforms in the different departments of MINFI. He called on his collaborators to mobilize themselves for a fluid financial administration that would put the interests of the state of Cameroon before individual interests so that the business environment can be conducive.

The minister prescribed coherence in the action of the ministry through the free circulation of information among its different technical departments. He also insisted that services rendered to those who come from without the ministry should be highly qualitative because this aspect also determines the excellence of an administration. For this to be made effective too, he said, information must flow between the ministry and the outside world. AlamineMey went on to give a challenge to each of the technical departments of MINFI.

The tax administration

The workaholic minister urged the tax administration to among other things “optimize the mobilization of internal resources, broaden the tax base, make taxation services customer-friendly, improve the business climate at the tax level, simplify and facilitate procedures.”

It is worth noting that the remarkable performances realized by the directorate general of taxes in recent years have greatly maximized the objectives assigned to this administration for 2016. For the 2016 budgetary year, the amount to be collected as tax revenue is 1 715 billion FCFA up from 1 604 billion FCFA last year, indicating an increase of 111 billion FCFA. The details of the revenue are as follows: non-petroleum tax revenue is expected to generate 1 565 billion FCFA while tax on petroleum companies is expected to produce150 billion FCFA.

This money will have to be provided by taxpayers who for some years now are experiencing important reforms carried out by the directorate general of taxes to facilitate procedures. Some of these reforms are the validity of taxpayers’ cards which has been increased from two to 10 years, and the promotion of youth employment through the exoneration of companies which recruit young people less than 35 years of age.

There is also the exoneration of VAT on social lodgings for persons who acquire such houses for the first time, the reduction from 16.5% to 11% of the tax on non-commercial revenues, for example on allowances paid to sports men and women, the reduction of tax on companies from 35% to 30%, etc.

The budget department

To the department of budget, Minister AlamineMey recommended the modernization of budget management, the strategic planning of expenditures, the reinforcement of collaboration between the budget and treasury departments and the rationalization of resources allocated to public enterprises. He also urged his collaborators of this department to ensure that the country’s debt is well taken care of so that viability and sustainability are not seen as lacking.

The 2016 state budget for this year, meant for growth and investment, is 4 234.7 billion FCFA in income and expenditure. In line with the prescriptions of the Minister of Finance, the DG of budget, Antoine Félix Samba, has explained that “this 2016 budget aims not only at financing the burdens of the day-to-day functioning of the state but especially at guaranteeing the financing of the massive first generation projects, those that are inscribed in the triennial emergency plan for the speeding up of growth as well as the construction of infrastructure necessary for the holding of the Africa Cups of Nations in 2016 and 2019.”

Treasury department

Furthermore, Minister AlamineOusmaneMey exhorted the treasury administration to diversify the sources of financing of the state budget and to lift the mortgage linked to bottlenecks that could impede procedures. He reminded the officials of the treasury administration of the imperative need to always ensure payment within deadlines both for public expenditures and for operations in favour of correspondents for whom they play the role of central banker.

Note should be taken of the fact that since 2010, one of the ways in which the government of Cameroon has made the diversification of the sources of financing of the state budget possible is by recourse to capital markets. Since the minister has insisted again on such diversification, it is expected that the treasury administration will be even more aggressive in the diversification process this year to be able to raise the 370 billion FCFA expected of it as against 320 billion FCFA last year.

This amount, expected to be gotten through internal savings mobilization and operations at the Bank of Central African States (BEAC), will be raised in three ways, as follows: 201 billion FCFA from related treasury bonds, 60 billion FCFA CFA in treasury bond loans, and 100 billion FCFA in treasury loans (empruntsobligataire), making a total of 370 billion FCFA.

The related treasury bonds will be raised every month, depending on the needs of the treasury expressed by the bank. Of this segment, the state hopes to borrow 42 billion FCFA in the first quarter and 56 billion FCFA in each of the remaining quarters of the year. However, 70 billion FCFA of the 210 billion FCFA of bonus of the assimilated treasury bonds will be reimbursed in the course of the year and this will bring the outstanding loan of the assimilated treasury bonds to 140 billion FCFA.

Concerning the related treasury loans, the 60 billion FCA expected to be raised will be gotten as follows: 15 billion FCFA in March, May, September and November for two years. As for the 100 billion FCFA of treasury obligations, it will be raised in one installment in July 2016.

The customs dept.

The customs administration was not left out. The indefatigable Minister of Finance invited “les gabelous” to dematerialize procedures of external trade; modernize the system of customs information and extend the Sydonia ++ Application to also cover other regions of the country; consolidate the Customs-Enterprises Forum whose recommendations should constantly be followed up so that new contracts with authorized operators could be signed; follow up performance contracts which are veritable performance pilot tools; and reinforce the mechanism of risks management in order to improve the efficiency of customs controls.

Edwin FongodNuvaga, the DG of customs, and his staff are also expected to follow up the fight against contra-banded goods, counterfeiting and illicit traffic as well as speed up the management of the transit of goods and customs governance. All of which can easily be realized, the minister pointed out, through the complete computerization of their procedures.

It should be recalled that this computerization process has long been underway in this department, with the introduction of the one stop shop for external trade operations. The simplification of procedures related to import and export and consequently the improvement of the quality of services of operators and of the port is, for instance, the reason for this one-stop shop.

The reforms taking place in the customs sector are already bearing enormous fruit. These past years, the customs administration has succeeded to improve its image to the public through its modernization program. In 2013 and 2014, for instance, it recorded a recovery rate of more than 100%, thereby positioning itself as the second contributor to the state budget after the tax sector. Besides, delays in customs services have reduced tremendously both in the Douala port and in the GarouaBoulai and Kousseri frontiers.

On account of this success story in the customs administration, there is no doubt that its assignment of mobilizing 750 billion FCFA this year (as against 697 billion FCFA in 2015) will be done.

It should equally be recalled that this year’s annual conference of MINFI was somewhat innovative as deliberations were later broken up into sectorial meetings and a roundtable on the theme “Ministry of Finance, towards an administration of excellence: challenges to take up.”

The roundtable was animated by seasoned technocrats in the public finance sector and from the private sector.