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Between 2014 and 2017, the six CEMAC countries cut down public expenditure by FCfa 4,000 billion

Between 2014 and 2017, the six CEMAC countries cut down public expenditure by FCfa 4,000 billion
  • Comments   -   Sunday, 27 August 2017 17:10

(Business in Cameroon) - Worth an estimated FCfa 7,000 billion in 2014, the spending carried out by the six countries in the CEMAC zone, gathering Cameroon, Congo, Gabon, Equatorial Guinea, Chad and the Central African Republic, peaks at roughly FCfa 3,000 billion in 2017, reveals BEAC, the issuing institution of the member States in this community.

This drastic reduction in public spending in the CEMAC zone (up to FCfa 4,000 billion in total), as analysed by the central bank, is the result of budgetary adjustment measures implemented in the States, or ordered by BEAC, since commodity prices started dropping (including oil, which five countries out of six are produce); a difficult economic situation which deprives the CEMAC States from important budget revenues.

As an example, BEAC decided, during the 22 May 2017 session of the Committee on Monetary Policy, to lower by 20% the refinancing goals of Chad and Equatorial Guinea; and by 10% those of the other States, provided that some developments take place with regards to their operational assets. This austerity measure, we learned, was meant to prevent injecting more liquidity in the economic system of the States, to avoid digging further into the foreign currency reserves which have greatly dropped since 2015.

“Generally speaking, when you have easing policies which allow you to inject more liquidity in the economy, what happens most often is that this money goes abroad, either because it is invested (the major contracts are generally won by foreign companies, Ed.), or because there is an increase in imports”, explains Abbas Mahamat Tolli, Governor of BEAC.

At the local level, through various mechanisms of budgetary adjustment, the CEMAC States have considerably reduced their expenditure. In Gabon, for example, investment spending planned in the 2017 budget of the State have dropped by FCfa 170,6 billion, compared to 2016. In Congo, the estimated State expenditure peaks at FCfa 2,107 billion in 2017, largely below the FCfa 2,608 billion mark in 2016 (-FCfa 500 billion).

In Cameroon, a country presented as the engine of CEMAC, the government announced during a press conference, in July, having implemented reforms which will lead, at the end of the year, to “a reduction of FCfa 100 billion in the operating expenditure” planned for the 2017 budget. The noose particularly tightened, we learned, on purchases of vehicles for the administration, fuel expenses and daily sustenance allowances for civil servants and other State agents.

Brice R. Mbodiam

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