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EXECUTION OF THE BUDGET AT THE END OF DECEMBER 2017 

REPUBLIQUE DU CAMEROUN
Paix – Travail – Patrie
—————- REPUBLIC OF CAMEROON
Peace – Work – Fatherland
—————-
MINISTERE DES FINANCES
—————- MINISTRY OF FINANCE
—————–
SECRETARIAT GENERAL
—————- SECRETARIAT GENERAL
—————-
DIRECTION DES AFFAIRES ECONOMIQUES
—————- DEPARTMENT OF ECONOMIC AFFAIRS
—————-
DIVISION DES FINANCES PUBLIQUES
—————- PUBLIC FINANCE DIVISION
—————-

EXECUTION OF THE BUDGET AT THE END OF DECEMBER 2017

During the 2017 financial year, the State budget was implemented within a context marked at the international level by: (i) a global economy that was consolidated throughout the year, with a growth estimated at 3.7% compared to 3.2% in 2016, thanks in particular to the good performance of world industrial production and the recovery of international trade. According to the IMF, this dynamic should continue in 2018, in view of the first indices of the year, with growth expected to be higher than in 2017, between 3.8% and 3.9%, driven by United States and emerging countries. (ii) The low level of world oil prices, despite an increase of more than 20% in 2017 compared to 2016. The price of oil stands on average at $ 60 per barrel.

At the national level, the budget implementation context was marked by: (i) a slowdown in economic activity, whose growth rate should be around 3.7% in 2017 against 4.5% in 2016 Economic activity should be revitalized in 2018, with a growth rate projected at 4.2%, driven by the tertiary sector and increased energy supply for secondary sector companies; (ii) the further decline in inflation, the rate of which, according to the NIS, is estimated at 0.6% in 2017 against 0.9% in 2016 and 2.7% in 2015; (iv) the budgetary support obtained from development partners, following the satisfactory implementation of the economic and financial programme at the end of the first half of 2017; (v) the second year of implementation of the Economic Partnership Agreement (EPA), with the inclusion of the so-called second group goods and the doubling of the tariff reduction rate for goods in the first group; and (vi) the fight against insecurity in the North West and South West regions.

Overall, the implementation of the State budget in the 2017 financial year was particularly characterized by a good performance of tax revenue and under-achievements in both oil revenue and non-tax revenue, as well as control of budgetary expenditure. The evolution in revenue and expenditure is as follows:

I- BUDGETARY REVENUE

During the 2017 financial year, total budgetary revenues stood at 4,451.9 billion. They are on the increase by 822.4 billion (+ 22.7%) compared to the previous year. This increase can be seen both at the level of internal revenues and that of loans and grants.

Domestic budgetary revenue collected amounted to 3,057.1 billion, recording an increase of 218.8 billion (+7.7%) as compared to 2016, when it stood at 2,838.3 billion. This increase is mainly attributable to non-oil revenue.

Borrowings and grants amounted to 1,394.8 billion at the end of December 2017 compared to 791.2 billion at the end of December 2016, showing an increase of 603.6 billion (+76.3%). This increase is mainly due to exceptional resources for budgetary support from development partners, within the framework of the implementation of the economic and financial programme with the IMF, and improved disbursements for project loans.

With regard to forecasts, the target of total budgetary revenue for the 2017 financial year set at 4,373.8 billion was exceeded. Achievements stood at 4,451.9 billion, representing a completion rate of 100.8%. This overrun is attributable to loans and donations. In fact, internal budgetary revenues show an achievement rate of 97.3% compared to the 3,143.3 billion annual forecast, while loans and grants have a realization rate of 113.4% compared to the projected, 230.5 billion.

By categories of revenues, the evolution is as follows:

1- Oil revenue amounted to 385.9 billion at the end of December 2017, down by 39.1 billion (-9.2%) compared to the end of December 2016, due to the effects of the low level of world oil prices. on the activity of the oil sector. It consists of 319.4 billion of NHC oil royalty and 66.5 billion tax on oil companies. Compared with the 455.1 billion annual forecast, its completion rate is 84.8%. The under-realization is attributable to the tax on oil companies which is affected by the low level of oil prices.

2- Non-oil revenue stood at 2,671.2 billion at the end of December 2017 as compared to 2,413.3 billion at the end of December 2016, representing an increase of 257.9 billion (+10.7%). Compared with the 2,688.2 billion annual target, it is on the decrease by 17 billion, representing a 99.4% achievement rate. The underperformance is observed at the level of customs revenue and non-tax revenue. The evolution and achievements of the main components of non-oil revenue is given below.

a)- Revenue from taxes and levies collected during the 2017 financial year amounted to 1,790.4 billion compared to 1,585.6 billion in 2016, representing an increase of 204.8 billion (+12.9%). This increase results mainly from the 195.4 billion (+ 36.4%) increase in VAT, 16.5 billion (+15.6%) in the STPP, and 9.9 billion (+10.5%) registration fees and stamp duty. Non-oil corporations taxes and excise duties, on the other hand, recorded decreases of 32 billion (-9.1%) and 11.7 billion (-5.9%) respectively. Compared to the 1,719 billion forecast for the 2017 financial year, tax revenues are in excess by 71.4 billion, representing an achievement rate of 104.2%. This excess is observed at the level of VAT (119.3%) and registration fees and stamp duty (109.9%). On the other hand, PIT, tax on non-oil companies, excise duties and the STPP are below the achievement level.

b)- Customs revenue stood at 732.7 billion in 2017, compared to 683.7 billion in 2016, showing an increase of 49 billion (+7.2%). Compared to the 800 billion forecast for the year, customs revenue is down by 67.4 billion, representing a completion rate of 91.6%. This underperformance is mainly due to lower imports and, to a lesser extent, to the induced effects of the Economic Partnership Agreement (EPA).

c)- Non-tax revenues increased by 4.1 billion (+ 2.8 %%) and stood at 148.1 billion at the end of December 2017. Compared to the 169.1 billion annual forecast, they are down by 21 billion, representing an achievement rate of 87.6%. This under achievement is attributable in particular to the oil transit tax and the revenue from services.

II- BUDGETARY EXPENDITURE

Total budgetary expenditure amounted to 4 363.8 billion at the end of December 2017 as compared to 4 451.5 billion at the end of December 2016, that is a decrease of 87.7 billion (-2%), attributable to current expenditure and capital expenditure. Compared with the 4,373.8 billion projected for the 2017 financial year, its execution rate is 99.8%. The execution rate of current expenditure is 104.5%, that of investment expenditure stood at 93.6% while public debt service was executed to the tune of 99.8%. By type of expenditure, the evolution is as follows:

1- Current expenditure fell by 188.6 billion (-8.1%) to stand at 2 152.7 billion at the end of December 2017. Compared to the 2,059.3 billion forecast, they exceeded by 93.4 billion, representing an execution rate of 104.5%. The evolution and achievements of the main items of current expenditure are given below.
a)- Personnel expenditure increased by 37.3 billion (+4%) compared to 2016 and amounted to 974.6 billion at the end of December 2017. It is down by 23.9 billion compared to the 998.5 billion expected, that is an implementation rate of 97.6%.
b) – Expenditure on goods and services fell by 232.8 billion (-24.3%) compared to 2016 and amounted to 725.5 billion at the end of December 2017. The rate of execution of this expenditure is 104.6% compared to the expected 693.6 billion.
c)- Transfer and pension expenditure amounted to 452.6 billion at the end of December 2017, on the increase by 6.9 billion (+1.5%) compared with the previous year. it shows an excess of 85.4 billion and an execution rate of 123.3%.

2- Capital expenditures amounted to 1,485 billion at the end of the year 2017 against 1,514.6 billion in 2016, a decrease of 29.6 billion (-2%). Compared to the annual target of 1,587 billion, this expenditure is down by 102 billion, representing an implementation rate of 93.6%. The evolution and achievements of the various headings of capital expenditure are presented below.
a)- Capital expenditure on own resources amounted to 691.1 billion at the end of December 2017, decreasing by 301.5 billion (-30.4%) compared to the end of December 2016. It dropped by 235.9 billion, representing an execution rate of 74.6%, compared to the 927 billion projected for the year.
b)- Capital expenditure on external financing amounted to 773.5 billion at the end of December 2017 and increased by 284.2 billion (+58.1%). Compared to the annual target of 625 billion, its implementation rate is 123.8%, mainly because of the improvement in the absorption capacity of external resources meant for jointly financed projects.
c)- Restructuring expenditure amounted to 20.4 billion at the end of December 2017 compared to 32.7 billion in 2016, showing a decrease of 12.3 billion (-37.6%). The execution rate is 58.3%.
3- Public debt service
Public debt service for the year 2017 amounted to 726,1 billion against 595.6 billion in 2016, an increase of 130.5 billion (+ 21.9%). Compared to the projected 727.5 billion, the public debt service is down by 1.4 billion, showing an execution rate of 99.8%.
a)- The actual service of external debt stood at 270.5 billion at the end of December 2017 against 243.7 billion at the end of December 2016, that is an increase of 26.8 billion (+11%). Its execution rate is 83.3%. It should be noted that there is no accumulation of arrears on this debt.
b)- Domestic debt payments increased by 103.7 billion (+29.5%), from 351.9 billion in 2016 to 455.6 billion in 2017. Compared to the 402.9 billion projected for the year, the execution rate of these payments is 113.1%.

EXECUTION OF THE STATE BUDGET AT THE END OFDECEMBER 2017
(In billion CFA francs, except otherwise specified)
HEADINGS 2017
Jan.-Dec 17 Jan.-Dec 16 Diff. Rate of Variation
F.L. Realisations Realisations Realisation (c/d) (c/d)
(a) (c ) (d ) (e)=(c-b) (c/b) (%) (abs) (%)
A- INTERNAL REVENUE 3143.3 3057.1 2838,3 -86.2 97.3 218.8 7.7
I-Oil revenue 455.1 385.9 425.0 -69.2 84.8 -39.1 -9.2
1- NHC Royalty 331.1 319.4 316.0 -11.7 96.5 3.4 1.1
2- Oil CT 124.0 66.5 109.0 -57.5 53.6 -42.5 -39.0
II- Non oil revenue 2688.2 2671.2 2413.3 -17.0 99.4 257.9 10.7
1- Tax revenue 2519.1 2523.1 2269.3 4.0 100.2 253.8 11.2
a- Revenues from taxes 1719.0 1790.4 1585.6 71.4 104.2 204.8 12.9
including – SIT 275.8 255.1 250.8 -20.7 92.5 4.3 1.7
– VAT 613.0 731.5 536.1 118.5 119.3 195.4 36.4
– Non oil CT 355.0 319.5 351.5 -35.5 90.0 -32.0 -9.1
– Excise duties 195.0 186.6 198.3 -8.4 95.7 -11.7 -5.9
– Registration fees and stamp duty 94.9 104.3 94.4 9.4 109.9 9.9 10.5
– STPP 128.0 122.1 105.6 -5.9 95.4 16.5 15.6
b- Customs revenues 800.1 732.7 683.7 -67.4 91.6 49.0 7.2
including – Import customs duty. 373.1 361.2 322.7 -11.9 96.8 38.5 11.9
– import. VAT 388.5 316.0 322.4 -72.5 81.3 -6.4 -2.0
– import.excise duty 12.8 17.8 12.7 5.0 139.1 5.1 40.2
– export duty 16.4 22.6 16.3 6.2 137.8 6.3 38.7
2- Non tax revenue 169.1 148.1 144.0 -21.0 87.6 4.1 2.8
B- LOANS AND DONATIONS 1230.5 1394.8 791.2 164.3 113.4 603.6 76.3
– Project loans 585.0 741.5 453.0 156.5 126.8 288.5 63.7
– Programme loans 0.0 342.1 0.0 342.1 – 342.1 –
– Donations 85.5 64.8 54.1 -20.7 75.8 10.7 19.8
– Issuance of government securities 300.0 173.4 264.1 -126.6 57.8 -90.7 -34,3
– Bank loans 260.0 73.0 20.0 -187.0 28.1 53.0 265.0
TOTAL BUDGETARY REVENUE 4 373.8 4451.9 3629.5 78.1 101.8 822.4 22,7
EXPENDITURE
I-Current expenditure 2 059.3 2 152.7 2 341.3 93.4 104.5 -188.6 -8.1
Personnel expenditure 998.5 974.6 937.3 -23.9 97.6 37.3 4.0
Expenditure on Goods & Services 693.6 725.5 958.3 31.9 104.6 -232.8 -24.3
Transfers and pensions 367.2 452.6 445.7 85.4 123.3 6.9 1.5
II- Capital expenditure 1 587.0 1485.0 1514.6 -102.0 93.6 -29.6 -2.0
On external financing 625.0 773.5 489.3 148.5 123.8 284.2 58.1
On own resources. 927.0 691.1 992.6 -235.9 74.6 -301.5 -30.4
Restructuring expenditure 35.0 20.4 32.7 -14.6 58.3 -12.3 -37.6
IV- Public debt service 727.5 726.1 595.6 -1.4 99.8 130.5 21.9
External debt 324.6 270.5 243.7 -54.1 83.3 26.8 11.0
Domestic debt 402.9 455.6 351.9 52.7 113.1 103.7 29.5
including – Amortization of principal 189.9 299.2 112.9 109.3 157.6 186.3 165.0
– Refund of VAT credits 110.0 82.0 54.0 -28.0 74.5 28.0 51.9
– Domestic arreas 10.0 36.3 23.1 26.3 363.0 13.2 57.1
TOTAL BUDGETARY EXPENDITURE 4373.8 4363.8 4451.5 -10.0 99.8 -87.7 -2.0
Source: MINFI.

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