(Business in Cameroon) - To build its rice reserve and cover the national demand for the rest of 2020, Cameroon has authorized the duty-free importation of 200,000 tons of rice, according to a June 5, 2020 correspondence signed by the Minister of Finance (Minfi) Louis Paul Motaze.
Various importers were assigned a specific volume to import. For instance, Sonam, which was the leading rice importer in 2019 (with 226,816 tons imported) is allowed to import 70,000 tons in this scheme. “I encourage you to pass the fiscal expenditures that would ensue on the selling price of those products,” Louis Paul Motaze wrote in a letter addressed to the CEO of Sonam.
In the framework of this measure, the 200,000 tons of rice imported would thus be exempted from the common external tariff (CET), which was partially restored to 5% after the customs duty exoneration of 2008.
A measure contrary to discourse
This decision surprised many people since the government was promising to implement new strategies aimed at boosting local production. "Given the decrease in public revenues, the state’s 2021-2023 economic and financial prospects are mainly tailored around import-substitution via the reduction or gradual suppression of exemptions on some products that affect the trade balance- to encourage their local production on a larger scale,” the Minister of Finance explained during a special ministerial council on Jul 2, 2020.
According to the budget orientation document, the country plans to raise the CET from 5% to 10% in 2021. Also, to limit the volume of importations, it proposed to regulate import finance. It also announced special measures for the legume and starch foods sectors likely to bridge the gap created by a drop in imports.
The document reveals that in 2019, Cameroon imported 905,107 tons of rice generating CFAF79.1 billion of fiscal expenditures.
Let’s note that when it comes to fiscal expenditures, VAT and custom duties exemption on rice imports are the most onerous for the state. In 2018, they represented 3.5% of the country’s fiscal revenues.
Sylvain Andzongo and Aboudi Ottou