Cameroon’s 2024 Budget Amendment: A Strategic Financial Adjustment Increases to 7,278.1 billion CFA francs
In a significant move to bolster its economic strategy, Cameroon has revised its 2024 state budget, marking an increase to 7,278.1 billion CFA francs. This adjustment reflects an 8% increase from the initial budget, representing a strategic step by the government to address the nation’s financial and developmental needs.
The budget amendment, signed by President Paul Biya, is set to rely heavily on foreign loans, with a substantial portion of the increase attributed to additional borrowing. The government plans to secure an extra 488 billion CFA francs in loans and other financing, which accounts for 91.5% of the total budget increase. This move indicates a pivot towards international and bilateral lenders, aiming to support the country’s development projects and outstanding payments.
The revised budget also proposes a slight increase in domestic revenue, with projections to rise by 45 billion CFA francs. This includes an expected rise in tax revenue by 35 billion CFA francs, suggesting a focus on boosting external trade and optimizing tax collection mechanisms. The government forecasts additional revenue from taxes on external trade and international transactions, as well as from other tax revenues.
This financial recalibration comes at a time when Cameroon is determined to reduce its non-oil primary budget deficit to 2% of GDP in 2024, as part of its commitment to continued economic reforms and maintaining a favourable external context. The budget revision also allocates increased resources to the Fund for financing the reconstruction of areas recognized as economically devastated, such as the Far North, North West, and South West Regions, raising the amount from 30 billion CFA francs to 35 billion CFA francs for the financial year 2024.
The government’s decision to amend the finance law and increase the budget underscores its proactive approach to managing the country’s fiscal policy. It reflects a balancing act between leveraging foreign loans for immediate development needs and enhancing domestic revenue streams for sustainable growth. As Cameroon navigates through these financial adjustments, the global community watches with interest to see how these strategic decisions will shape the nation’s economic trajectory in the years to come.
One of the curiosities that strikes you, when reading the presidential order of June 20, 2024, on the amending finance law of the Republic of Cameroon, is the downward review of the country’s ambitions in terms of mobilizing resources for fill with its revenues. Initially, the authorities had put together a financing plan based on cash requirements capped at 1,489.4 billion CFA francs. But, in the 2024 budget collective, which modifies and completes certain provisions of the finance law adopted on December 19, 2023, for the 2024 financial year, Cameroon will face a request for financing its treasury of 1977.4 billion CFA francs, i.e. an adjustment of 488 billion CFA francs.
Thus, on the financial market, we observe a drop of 95 billion CFA francs in its ambitions which go from 375 billion CFA francs to 280 billion CFA francs; similarly, loans on multilateral projects increase from 357.375 billion CFA francs to 308.511 billion CFA francs. From governments not members of the Paris Club, Cameroon only intends to raise 271 billion CFA francs, a discount of 42.9 billion CFA francs.
Read also: Finance law 2024: the government is counting on a budget of 6,740.1 billion CFA francs
The cuts thus made in the financing of its treasury, which amounts to more than 2,070 billion CFA francs, are made up in the following items: project loans: 783 billion CFA francs; budgetary support expected within the framework of the Economic and Financial Program concluded with the IMF: 235 billion CFA francs; other budgetary support is also expected from the African Development Bank (65 billion CFA francs); from the IMF (55 billion CFA francs); from the World Bank (36 billion CFA francs) as well as the Islamic Development Bank (8.7 billion CFA francs).
In the same vein, 139.4 billion are expected from local commercial banks while the exceptional financing expected by the State amounts to 165 billion CFA francs. As for its financing strategy, the government will have to mobilize 747 billion CFA francs on the internal and external financial and banking markets. That is 280 billion CFA francs on the Beac financial market for development projects, and 467 billion CFA francs for the outstanding amounts which amount to 537 billion CFA francs, including unstructured debt. 1291.5 billion CFA francs will be used to pay the internal and external debt in a balanced manner.
In terms of general budget revenue, there is an increase of 45 billion CFA francs to 5,235.1 billion CFA francs. They are established as follows: tax and customs revenue of 3,998.7 billion CFA francs; oil revenues of 801 billion CFA francs to which are added donations, legacies and exceptional revenues. In overall spending, we observe cuts in several items as well as significant adjustments which bring them to 5,608 billion CFA francs in the presidential order compared to 5,057 billion in the initial finance law. This increase is mainly due to the increase in financial debt charges which amount to 480 billion CFA francs. With the increase in civil servants’ salaries which took place last February thanks to the rise in fuel prices, personnel expenditure increased by 59.5 billion CFA francs, to 1489 billion CFA francs compared to 1431 billion CFA francs.
Expenditures on goods and services are reduced by 81.5 billion CFA francs, going from more than 1062 billion to 980.7 billion. At the same time, investment spending fell by 132 billion CFA francs. This is not the case for transfer expenditure which saw an increase of 123 billion CFA francs, rising to 953.7 billion CFA francs.
