Through an intense and active communication campaign initiated a few days ago, the Director General of the Budget, Cyrille Edou Alo’o, presents the content, the context and the scope of the order modifying and completing certain provisions of the 2020 Finance Law. signed on June 3, 2020 by the Head of State.
Three major objectives emerge from the presidential ordinance which intends to correct the current finance law. According to an explanatory note prepared by the General Directorate of Budget (DGB) and made public by the Communication Division of the Ministry of Finance, the text of the Head of State aims to “adapt the finance law to the economic context to the economic context of the moment “,” refocus the finance law on the fight against the coronavirus “and” legalize tax relief measures announced in late April last by the Prime Minister, Head of Government “.
The global health crisis of the Coronavirus that is currently hitting the world has not spared Cameroon, which has recorded a considerable drop in economic activity, thus upsetting all macroeconomic indicators. The country has entered a recession since the start of the current fiscal year and government forecasts forecast economic growth to drop by around 5 percentage points. This is largely due to the decline in public resources of around CFAF 768 billion, or 11% of the forecast budget. “This drop affects all components of revenue whether tax, customs or non-tax. Oil revenues, in particular, are falling by almost 70%.
This is explained by the fact that initially projected at 54.54 dollars in the finance law, the price of a barrel of crude oil stands at practically 35 dollars today. A month ago, it was even at a floor of 0 dollars “specifies the note of the Dgb. For the sake of balance, the amended Finance Law should adjust spending by public administrations, which will experience a drop of around 20% in their budget allocation.
Among the major innovations of this finance law, as described in the ordinance of the President of the Republic, there is the creation of a special allocation account called “Special National Solidarity Fund for the fight against coronavirus and its economic and social repercussions ”. Financed at FCFA 180 billion, the expenses of the said fund should contribute to achieving the objectives set out in the global response plan against the coronavirus pandemic.
“Through this act, the Head of State wanted to give budgetary materiality to this fund, the account of which receives a substantial envelope of FCfa 180 billion, the budget Director specifies. Regarding the management of the Fund, there is a lifting of a legislative lock in order to allow optimal operation. “In the law on the financial regime of the state and other public entities, it is said that a trust fund cannot receive more than 10% of its general budget envelope. This clause has been lifted so that the Fund has sufficient resources. ” We read.
As part of the fight against the coronavirus, the order takes into account the support of Cameroon’s economic and financial partners. The IMF, the World Bank, the AFD and the European Union, among others, have all manifested themselves through financial support and debt relief cumulated to CFAF 118 billion. According to the DGB, “it is partly thanks to this advantage that the solidarity fund will be financed.”
