Orientations on 2013 State Budget Preparation

President Paul Biya has given guidelines for the preparation of the 2013 State budget which will see the full implementation of the result-based management budget that goes fully operational on January 1, 2013. The executive orientations contained in a July 9, 2012 circular gives the macroeconomic context within which the budget is being prepared, its objectives, well-defined orientations, the country's budgetary policy as well as income and expenditure guidelines. This is in a bid to comfortably align with the country's long-term growth objectives contained in the Growth and Employment Strategy Paper.

Macroeconomic Context

The 2013 State budget, the Presidential circular indicates, will be prepared against a backdrop of still-to-weather storm of the global financial and economic meltdown which has had untold consequences on export of primary products and much more on the Euro zone. As a result, the International Monetary Fund (IMF), the circular notes, projects the global growth rate at 3.9 per cent in 2013. The drop is due to the slump in developed countries whose growth rate IMF believes, would not go beyond 1.2 per cent.

In Sub-Saharan Africa, the effects of the global crises could be contained with the IMF projecting its growth rate at 5.3 per cent in 2013 and about 6 per cent in the CEMAC sub-region. In Cameroon, thanks to the effective take off of growth-induced projects; notably hydroelectric projects like Memve'ele, Lom-Pangar and Mekin, as well as projected increases from hydrocarbons production, the growth rate is expected to step up. Furthermore, the economy is expected to receive fresh impetus following the effective putting in place of the farmer's bank (Cameroon Rural Financial Corporation, CARFIC), and that for small and medium-size enterprises and industries (Banque Camerounaise des PME, BC/PME). Energy shortfall that has hitherto slowed sustainable socio-economic development is also expected to improve especially with the putting in place of energy production plants like the 216 MW Kribi Gas Fired Plant.

Outlined Objectives

Focus in 2013, the Head of State prescribes, will be on improving the living conditions of the population. This entails consolidating a growth rate capable of creating jobs. More specifically, accelerating procedures for the implementation of giant projects, developing infrastructure, improving the productivity of other growth-induced sectors, the effective putting in place of second-generation agriculture with the use of disease-resistant and high-yielding seeds, boosting local production and minimising importation of food stuffs as much as possible, encouraging private investment and innovation, stepping up the size of investment budget, diversifying the sources of financing the economy, improving the management of State Resources as well as energetically combatting social and economic ills like corruption and embezzlement. With this in place, the 2013 State budget is expected to seek to attain a 6.7 per cent growth rate, contain inflation at 3 per cent, among others.

Orientations on Preparing the Budget

The budget will see the full implementation of Law No. 2007/006 of December 26, 2007 relating to the Fiscal Regime of the State. According to Section 79 of the law, "It will enter into force in its entirety with effect from 1 January 2013, the date of repeal of Ordinance No.62/OF/4 of 04 February 1962.

By it, the budget is expected to bring out ministerial and sector by sector strategies based on the Growth and Employment Strategy Paper. The needs of each administration are expected to be clearly spelt out and money allocated to meet them. Strides in governance and decentralisation need to be consolidated so that the budget can attain already outlined objectives.

Budgetary Policy

Being a programme budget, vote holders are expected to be well disciplined in the recovery and use of State resources. As such, much needs to be done to step up internal non-oil resources so as to revive the economy and improve the living conditions of the population. Fiscal fraud and tax evasion should be minimised and efforts should not be relented in modernising the fiscal administration and the development of licensed centres for small medium-size enterprises and industries should be strengthened.

On customs recovery, efficiency should be pursued. According to the Presidential circular, this entails fostering the performance contract the customs administration has undertaken, the certification of certain products, through stamping, to curb contraband, counterfeiting and customs fraud. The country's ten-year development plan, the 2035 growth vision, the Millennium Development Goals, the medium-term expenditure framework, the circular stipulates, are supposed to serve as references of government's socio-economic action plan.

Concerning expenditure, projects to benefit funding from the Public Investment Budget must be based on the objectives-programmes-actions-projects and tasks contained in the medium-term expenditure framework and much more in the priority action plans as well as in councils development plan.

As such, vote holders must only retain projects that have been carefully studied to meet these objectives. The ministry in charge of public investment, that is, that of the Economy, Planning and Regional Development, by the circular, is tasked to evaluate the feasibility of the projects as well as receive from various ministries projects to benefit the financing of the Debt-relief programme, C2D, for insertion into the 2013 finance law like other projects. At the same time, the expenditures from the C2D programme should also be forwarded to the Ministry of Finance for insertion into the 2013 finance law. Care, the circular states, should also be taken on the financial viability of projects and the nature of loans so as to contain the country's indebtedness at a reasonable level.