CI-NEWS

PM prescribes reduction of public spending, completion of projects.

2019-07-09

No: 435

PM prescribes reduction of public spending, completion of projects.

Following is the press release from the cabinet meeting of July 3, 2019.

“The Prime Minister, Head of Government, His Excellency Joseph DION NGUTE, this Wednesday 3 July 2019 at 10 a.m., chaired a Cabinet Meeting at the Prime Minister’s Office devoted to the preparation of the State budget for the year 2020 financial year. The meeting was attended by Ministers of State, Ministers, Ministers Delegate and Secretaries of State.

Two items featured on the agenda namely:

Statement by the Minister of Finance on “the profile of the finance law for the 2020 financial year as a prelude to the budget orientation debate”;
Statement by the Minister of the Economy, Planning and Regional Development on “the structure of the public investment budget for the 2020 financial year”.

After the opening statement by the Head of Government, the Minister of Finance first made a brief presentation of the Budgetary Orientation Debate (BOD), instituted by Law N°.2018/012 of 11 July 2018 on the financial regime of the State and other public entities. He said that this Debate offers the opportunity for Parliament and Government to better contribute to the definition of the macroeconomic and budgetary framework, but above all to discuss the conditions, tools and means that guarantee the sustainability of public finance in the medium term, before the examination of the Finance Law, each year.

Talking later about the budgetary prospects on the basis of which the profile of the Finance Law for the 2020 financial year was drawn up, the Minister of Finance announced that Government’s public finance policy for the 2020-2022 period would be based on three main pillars, namely: reducing the budget deficit, controlling debt, and strengthening foreign exchange reserves at the central bank. In this respect, the overall budget deficit is expected to fall from 2.5% of Gross Domestic Product (GDP) in 2018 to 2% in 2019, reaching 1.5% of GDP from 2020 to 2022. As for the consolidation of public finance, it will be supported by increased mobilization of domestic non-oil revenues, optimization of expenditure and the maintenance of domestic and foreign public debt on a sustainable path. These projections are in line with the objectives of the Economic and Financial Programme concluded with the International Monetary Fund, and the policy convergence criteria of the countries of the Central African Economic and Monetary Community (CEMAC) sub-region.

After mentioning the factors likely to influence the macroeconomic and budgetary framework, the Minister of Finance finally dwelt on the measures recommended to improve the quality of public spending. He insisted on controlling the State’s current consumption (water, electricity, telephone and rents) and subsidies granted to public institutions; rationalizing contributions to international organizations; and the reform of appropriation accounts in order to improve their performance.

Speaking after the Minister of Finance, the Minister of the Economy said that the strategic thrusts guiding the preparation of the public investment budget (PIB) for 2020were based on the political programme defined by the Head of State for the current seven-year term. They mainly relate to the promotion of strong and inclusive growth, through the consolidation of the achievements on the implementation of the Growth and Employment Strategy Paper; the boosting of the non-oil sector in order to increase its contribution to growth; the strengthening of redistribution and social protection mechanisms; the productive transformation of the economy and its diversification.

To this end, the main areas of concentration of the 2020 PIB are the productive sector, with the continuation of major development projects and the operationalization of economic areas; the social sector through the improvement of healthcare provision and the implementation of Universal Health Coverage; the governance sector through the intensification of measures aimed at improving the business climate, in particular those with a significant impact on investment and entrepreneurship.

The Minister of the Economy concluded his remarks by presenting the priority investment projects that will form the backbone of the 2020 PIB. He mentioned, inter alia, the continuation of major road and motorway projects; the implementation of the irrigated area development programme; the acceleration of construction work on hydroelectric dams, as well as the densification of the electricity transmission network, the commissioning of broadband telecommunications infrastructures; the complete operationalization of the Kribi port platform and the completion of studies for the construction of the Limbe deep seaport. Moreover, particular attention will have to be paid to the rigorous selection and maturation of projects, the optimization of investment expenditure and the preservation of overall budgetary balance.

After the discussion following these statements, the Meeting adopted the Medium – Term Economic and Budgetary Planning Document for the 2020-2022 period, which will be submitted to Parliament for the Budgetary Orientation Debate. The Prime Minister approved the measures proposed by the Minister of Finance regarding the reduction of public spending and asked him to start implementing them in the year 2020. The Minister of the Economy was instructed by the Head of Government to establish the necessary budgetary provisions for the completion of the projects undertaken within the framework of the three-year Emergency Plan for Economic Growth, the three-year Special Youth Plan and the projects relating to the organization of the CHAN 2020 and AFCON 2021.

The Meeting was adjourned at 12:30p.m”.

Yaounde, 03 July 2019

(s) FOUDA Séraphin Magloire

Secretary General,

Prime Minister’s Office.

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PM prescribes reduction of public spending, completion of projects.