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Cameroon to lose 300 billion FCFA of petroleum revenue due to Covid 19

The current health crisis in Cameroon will not be without impact on the State’s treasury. In an interview with Cameroon Tribune, the Director General of taxes already indicated that the public treasury should be cut by CFAF 114 billion due to government flexibility measures aimed at businesses and households. This will trigger an observable shortfall in tax (92 billion FCFA) and customs (22 billion FCAF) revenue.

The United Nations Economic Commission for Africa (CEA) projects a fall of 3.1% in Cameroon’s GDP while the African Union fears a loss of 20-30% in tax and customs revenue. To this is added the drastic fall in oil prices on the international market which comes to rout the country’s budgetary forecasts for the 2020 financial year.

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 “If I take the case of oil, we have made our 2020 finance law on an assumption of a barrel at 54.4 dollars. There we are at less than 30 dollars. You understand that the consequence is immediate, “Minister of Finance Louis Paul Motaze said during the third Extra-ordinary session of the steering committee of the CEMAC Economic and Financial Reform Program held on March 28, 2020 in Brazzaville. In fact, in the 2020 finance law, oil revenues on behalf of this exercise were 443 billion CFA francs.

 The National Hydrocarbons Corporation SNH  revealed last month that the shortfall could be around 70% of these forecasts. “In anticipation of the collective budget (amending finance law) in the making, SNH has already informed the government that, in view of the current economic situation, it will only be able to transfer to the public treasury 30% of the initial revenue contained in the 2020 Finance Law.”  By doing the calculation, the losses recorded here should be more than 310 billion CFA francs.

Rather sad forecasts which will undoubtedly lead to a collective budget. The modified budget which, from reliable sources, is already in preparation should affect the main components of revenue and expenditure, devote the change in budgetary priorities with a reallocation of public resources between the ministerial departments and the programs.