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IMF Programme: Salary Cuts, Heavy Taxes Haunt Cameroonians 

By Yerima Kini Nsom

Mitsuhiro Furusawa, IMF Dept Managing Director, Cameroon can only get out of the current crisis if it embarks on the stringent management of the State budget

Cameroonians will soon be grappling with another wave of salary cuts and heavy taxes when Government fully bows to the nitty-gritty of another Structural Adjustment Programme, SAP, with the International Monetary Fund, IMF.

If Government fully gives in to the IMF programme, another slash of civil servants’ salaries will be in the making.

The IMF holds that the State wage bill is too heavy for an ailing economy like Cameroon.

In 2016, the State wage bill stood at FCFA 955. 2 billion, of this amount, retired personnel take home FCFA 194 billion.

According to the 2017 budget, civil servants will take home FCFA 998.5 billion as salaries in addition to the FCFA 205 billion that retired workers are bagging as benefits.

Experts hold that a cut in salaries will bring unsound consequences on the economy.

They insist that corruption increased three fold when the salaries of civil servants were cut by almost 70 percent in 1993.

Besides, the 1993 cuts stirred a dangerous wave with members of the Cameroon Public Servants Union, CAPSU, demonstrating in the streets of some towns in the country for several months.

Cameroon is once more under the heat of the IMF SAP. The country is bowing to diktats of the Bretton Woods Economic gendarme in the wake of the ongoing economic asphyxia ailing countries of the CEMAC Sub Region.

The move was sanctioned by IMF’s FCFA 390 Billion loan to Cameroon recently. The implication of the loan compels President Biya’s country to fully bow to austerity measures, given that the country is facing a continuous decline in petrol revenue.

The IMF is urging Cameroon to widen its tax base so as to increase non-oil revenue.

According to IMF’s Deputy Director, Mitsuhiro Furusawa, Cameroon can only get out of the current crisis if it embarks on the stringent management of the State budget by enhancing public investments that will stimulate growth.

From every indication, 2018 is a difficult economic year for Cameroonians who, will be hunched with more and heavier taxes. Even President Paul Biya’s directives on the 2018 annual budget are predicated on widening the nation’s tax base.

IMF’s rescue plan is one with a heavier taxation burden on Cameroonians.

It will be a logical continuation because 30 new taxes were introduced in the 2017 budget.

For instance, the increase of special tax on petroleum products increased prices at filling station.

A sojourn Tax of FCFA 1000 to 5000 per night was imposed on hotels in the country. With an increase and introduction of new taxes, economists are already expressing fears that it will provoke an outburst of inflation on basic commodities, especially foodstuff.

For one thing, the IMF is also advising Cameroon to continue with the privatisation of some State corporations in the adjustment programme.

Thus, State corporations like the National Oil Refining Company, SONARA, the Cameroon Telecommunication Corporation, CAMTEL and the Cameroon Postal Services, CAMPOST, are being earmarked for privatisation.

The move is coming at a time when Parliament is studying two draft laws aimed at better management of State corporations and public enterprises.

The IMF holds that State corporations are so poorly managed that they become liabilities to the State instead of assets for economic growth.

For one thing, appointment of managers and recruitment of personnel in such corporations is more often predicted on other considerations, which continued to milk the State dry through the payment of subsidies.

According to the Minister of Finance, Alamine Ousmane May, the State paid FCFA 32. 7 billion to State enterprises by June 2017.

This is an indication that servicing Cameroon’s debts that stand at a circa FCFA 5000 billion will be an uphill task.

The logical beginning of Cameroon’s march to the IMF adjustment programme was on December 23, 2016, when President Paul Biya chaired an extraordinary meeting of CEMAC Heads of State.

The meeting was to address the declining economic situation in the Sub Region. The continuous fall of the prices of petrol in the world market as well as some internal crisis had put CEMAC countries in a difficult situation.

The IMF Director General, Christine Lagarde, who attended the meeting in the company of the French Minister of the Economy and Finance, Michel Sapin, insisted that CEMAC countries must bow to certain measures in order to survive.

The choice was that between the devil and the deep sea for they were asked to choose between the IMF structural adjustment programme and the devaluation of the FCFA.

The CEMAC countries chose the former. It is for this reason that Cameroon is hearkening to the IMF programme with all the unsound consequences.

The programme compels the country to cut its coat according its size by way of the stringent management of public finances and by inflicting a heavy tax burden on the people.

Despite the huge wage bill, it is reported that shady deals in which ghost civil servants continue to receive salaries, are still very much alive.

Measures the Ministry of Public Service and Administrative Reforms has taken to rid ghost workers from the civil servants pay roll have not been able to fully eradicate the phenomenon.

Corruption and complicity of some officials have made it possible for civil servants who abandoned their jobs and travelled for greener pastures abroad, to continue to receive their salaries.

Even the civil servants census a few years ago, did not help matters.

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