-Service providers are also being paid chronologically
-Moh Sylvester, DG of Treasury, Monetary and Financial
Cooperation
What is the situation of the
treasury at the moment?
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| Moh Sylvester, DG of Treasury |
Why do
you put so much emphasis on payment of service providers?
There
was a time it came to our notice that people were no longer interested in
public tenders, we focused on making improvements and so now that we are paying
regularly, they will only have to come running. The Treasury Department has
always had as objective to pay service providers and those who have accounts
with the state in 30 days. That has always been the major objective contrary to
the 90 days which is indicated in CEMAC texts. We have been doing that for the
past five to six years. In June 2017, we started having financial difficulties
and that is why we signed the Financial and Economic Programme with the
International Monetary Fund to enable us meet up with our objectives of paying
people regularly.
Did you
meet those objectives in 2018?
We did,
though the results were not what we expected. One of the reasons we could not
meet up with our objectives in 2018 is the security situation of the country
which was not very good. There was quite a huge expenditure on security and the
situation also contributed in reducing government revenue. This was greatly
witnessed in the brewery industry and telecommunications sector. The tax
contributions of these companies actually reduced. We also had a reduction in
customs revenue due to those difficulties in the North West and South West
regions. The second challenge we had was the presidential election. A lot of
expenditure on it caused the treasury to shrink. We had operations of the
Africa Cup of Nations (AFCON) which had to be paid with a lot of diligence
since we were struggling to meet up with a deadline. Then, we also had the
PLANUT programme which was also being executed alongside the normal execution
of the budget.
We gave
priority to salaries, not forgetting small and medium-size enterprises. I think
those who were carrying out supplies with government realized that at one
moment we were no longer following chronological payments. But from October
2018, most of them were called up by their bankers who informed them that their
money was being paid. These payments were made, thanks to the budgetary support
we got from our partners and with the FCFA 200 billion we raised from the
financial market. The FCFA 200 billion helped us pay outstanding bills. By
mid-December, payments for state suppliers were made chronologically. Even if
we have difficulties, we do not have to give the impression that one needs to
know someone in the treasury department in order to be paid or that there is
disorder in payments. So even if we do not pay in 60 days, we make sure that
payments are done chronologically. Most service providers can attest to that.
We also
got some budgetary support of FCFA 98billion from the African Development Bank
and about FCFA 105 billion from the European Union in mid-December and we will
use it to pay service providers. Service providers should rest assured we shall
continue with payments.
How
much do you currently have in outstanding debts?
As of
September 30, 2018 we had a debt of over FCFA 300 billion. This amount does not
represent payments that have to be made immediately. Some are to be paid
progressively. The debt to service providers is not more than 60 billion. The
rest includes subventions, counterpart funds and funds that have to be
transferred depending on need. Not all the debt is due. I cannot say we did not
attend our objectives despite the difficulties.
What is
your department going to contribute to ensure the success of the 2019 budget?
Our own contribution to the 2019
budget would be made through transactions in the financial market. This we plan
to get FCFA 260 billion from the financial market. In 2018, we had a very
positive reaction to the treasury bills we issued for three months and six
months. There has been a very high demand for treasury bills. We used to
collect about FCFA 7 billion every two weeks and eventually had to move to FCFA
10 billion. I want to indicate that the interest rate has been very interesting
because at one moment it stood at below 3 per cent per year. The rate of
coverage generally went about 200 and 300 per cent. This means that when we ask
for FCFA 10 billion, we have banks wanting to subscribe for FCAF 30 billion.
But since the regulation requires us to take just what we asked for, we take
just that.
For the case of treasury bonds
(generally called “empruntobligataire”) which are long term bonds that take
five years, we went in for FCFA 150 billion in October but subscription came up
to FCFA 207 billion and we decided to take FCFA 200 billion for the projects
that had been presented. This was done in conformity with the conventions we
signed to raise the funds. This is an indicator of the credibility of the
signature of the state.
What is your forecast for this year?
We are quite optimistic. The fact
that we are under the IMF programme gives us access to a lot of budgetary
support from partners like the IMF, the World Bank, the African Development
Bank, EU and French Development Agency. These partners have been supporting us
since 2017 and will continue in 2019. The 2019 budget is in the direction of
rationalizing public spending. It is not an ostentatious kind of budget. We are
trying to ensure that we get more money from taxes and to avoid any leakages in
terms of expenditure. You have to understand that the budgetary heads are so
many that even when we make economies on certain heads, we may have others that
give the impression of wasteful spending and that goes to cover up the total
efforts that have been made in other heads. But on the whole, the objective of
making sure that the expenditure actually gets to the final destination will be
met since we have a lot of control measures.
We are going to reduce cash payments more and more. Most payments will
be made by bank transfers
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