The visiting IMF mission in Cameroon has maintained that by subsidizing consumption of petroleum products the government was putting a big hole on the state budget, to the detriment of the majority of Cameroonians. Unfortunately!
By Ayukogem Steven Ojong in Yaounde
 |
| IMF wants pump prices of fuel to be raised |
Addressing curious pressmen in the presence of the minister delegate at the MINFI in charge of the budget, Titi Pierre and Yaou Abdoulaye, the minister delegate at the MINEPAT, Mario Zamarocsky said the Cameroon government’s subvention of fuel consumption was a major handicap to the economic growth of the country. He said it is possible for the government to lift the subsidy on petroleum consumption while at the same time maintaining the cost of public transportation in the country.
“You can suppress subsidy on petroleum prices but still maintain the cost of public transportation,” Mr. Zamarocsky advised, indicating that by lifting subsidy on petroleum products the government will generate money that can be used to subsidize other more pressing sectors of the economy notably the public transport sector. He pointed out that if the government decides to subsidize public transportation she would impact the lives of a greater segment of the population, especially the poor masses. Mr. Zamarocsky said from which ever direction the government looks at the issue, it was more urgent and expedient to subsidize public transportation than petroleum products. On the contrary, by subsidizing petroleum consumption the government is helping instead the well-to-do in society, who can afford to own cars and who can still afford to buy fuel even at unsubsidized prices, he noted.
The IMF’s advice tied vividly with that of the World Bank that also observed recently that subsidy on petroleum was only helping to swell the government’s internal debt and poses a major impediment to the economic growth of the country.
Both the IMF and World Bank are thus advising and urging the government to disengage from certain responsibilities especially the subsidy on fuel.
“By diverting the subsidy on fuel to other sectors notably public transportation, the government would have resolved a more specific and pressing problem, whose immediate benefits can be assessed and the sectors impacted easily identified,” suggested Souleymane Coulibaly, an economist at the World Bank.
In a recent Report, the World Bank observed that the Cameroon government under-estimates and under-budgets her subvention to petroleum. It noted that FCFA 220 billion was budgeted as fuel subsidy in 2013 but 450 billion was spent for the purpose by the end of the year. The report observed that this accounts for the huge accrued debts owed to the National Refining Company, Sonara, and causes undue pressure and limitations in managing the state treasury, that has to provide funds that were not accounted in the state budget (the so-called depenses engages mais non ordonnances-DENO).
According to the World Bank all these dis-functionalities only lead to the accumulation of debts that the government is obliged to pay. It noted that the government’s total debt due in 2013 amounted to 6.7% of the GDP, up from 3.9% in 2011.
The World Bank in the 7th edition of its “Cameroon Economic Handbook” also pointed out that the weak and very slow execution of the Public Investment Budget, PIB, in 2013 (only 35%), which was seriously decried by the head of state in his State-of-the-nation address on 31 December 2013, was not unconnected to all the above-mentioned reasons.
Thomas Babissakana, a finance engineer, once noted that with the present allocation for public investment in the state budget, Cameroon can never emerge even by the year 3000. He urged the government to increase the investment budget to 40% of the state budget, and cut down the recurrent budget to 60% if the country’s economy must emerge.
No comments:
Post a Comment