2014 State budget: Focus On Accelerating Growth, Competitiveness!

By Godlove BAINKONG, Cameroon Tribune, 01-08-2013

A Presidential circular has spelt out salient issues to be considered in preparing the 2014 State budget. 

Going by a July 30, 2013 circular signed by the President of the Republic on the preparation of the 2014 State budget, Cameroon could go places in its drive to accelerating socio-economic growth and rendering the economy more competitive. The orientations give the macroeconomic context within which the budget is to be prepared, come out with well-defined objectives, the country’s budgetary policy as well as income and expenditure guidelines in conformity with the country’s long-term growth objectives contained in the Growth and Employment Strategy Paper.

Macro-economic Context

President Paul Biya in the circular notes that the preparation of the 2014 State budget will be against a backdrop of timid international economic recovery sustained by the performances of emerging countries. Although risks are not completely allayed especially with the eurozone crises and geopolitical tensions in Asia and the Middle East, the executive circular notes that there is hope in the horizon. International financial organisations are projecting a 6.1 per cent economic growth rate for Sub-Saharan Africa and 6 per cent for the Central African sub-region in 2014. Thanks to improved production of energy and hydrocarbon products, economic growth in Cameroon, the circular holds, is around 5 per cent and inflation could be contained at 3 per cent as a result of sustained fight against price hikes.

Defined Objectives

The major drive of government in 2014 will be to accelerate growth and ensure the competitiveness of the economy. Promoting strong and sustained growth and diversifying the country’s trade partners as well as continually improving the business climate to attract as many investors as possible, the circular notes, will be highly sought for.

Outlined Strategies

Vote holders preparing the State budget, the presidential circular indicates, should lay emphasis on the productive sectors of the economy. It concerns notably, the monitoring and follow up of the second-generation agricultural policy, continuation of the construction of road projects as well as priority telecommunications infrastructure. Agriculture and mining projects are expected to be pursued or get started and government will also pursue the drive to bridge the energy demand/supply gap. Ensuring a proper mastery of the public contracts sector as well as ensuring fair competition for all are also to be sought for. The execution of public investment projects should also be given particular attention and efficiency sought for in the management of public finances. Stakeholders will also need to source for other ways of financing the economy, boost private investment, encourage sub-contracting and self-employment as well as seek ways of improving local processing and consumption of home-made products to reverse the persistent trade imbalance. Target should be to attain a 5.2 per cent Gross Domestic Product in 2014 and contain inflation at 2.8 per cent.

Directives

Being a continuation of the results-based management budget (Programme Budget) which went operational in 2013, the 2014 programmes and projects are expected to right the wrongs that the administration is grappling with now. In respect of Law No. 2007/006 of December 26, 2007 relating to the Fiscal Regime of the State, the budget is expected to bring out ministerial and sector by sector strategies based on the Growth and Employment Strategy Paper. Programmes are expected to be clearly spelt out, their objectives well defined for amounts to be allocated to them. By nature, programmes and projects must not go beyond three years.

Budgetary Policy

Vote holders are expected to show proof of discipline 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 of the State. Customs likewise tax administrations need to modernise their recovery mechanisms for the good of the economy and tax payers. For transparency, there is need for synergy between councils and tax and customs administrations as well as well outlined accounting timetable for local recoveries. The presidential circular also gives directives on prudent expenditure of State resources and how to go about indebtedness.