6 June 2018

Cameroon: Fruit of Optimum Oil, Non Oil Performance

The wind of change seems to be taking the economy of Cameroon to the right direction taking into consideration the Ordinance of the Head of State of June 04, modifying the 2018 Finance Law. The Ordinance adjusts the 2018 State budget by 3.9 per cent or FCFA 176 billion increasing it to FCFA 4,689.5 billion up from FCFA 4,513.5 billion.

Two major reasons explain the increase; optimum performance observed in the recovery of oil and non oil revenue and the present politico-economic and socio-cultural exigencies staring the country on the face.

According to the explanatory note of the Ministry of Finance, fiscal revenue raised in 2017 agreeably surpassed by FCFA 67 billion forecast made during the preparation of the 2018 budget. Already, the lights are getting greener, at least in the customs department. Figures from the first quarter indicate a rise of 4.2 per cent in revenue collection, representing FCFA 7.5 billion more.

Revenue for the period rose to FCFA 187.2 billion against FCFA 179.7 billion during the same period a year ago. Some of the reasons accounting for the increase include; extension of SYDONIA customs clearance device, implementation of the customs clearance manual at the Kribi Deep Seaport, development of the Cameroon Customs Information System [CAMCIS] and institution of the unique transit permit to ease and secure transit to Chad and Central African Republic.

Oil revenue on its part was programmed on the assumption that crude oil was to sell at average 41 dollars a barrel but the trends have since gone largely in favour of Cameroon with a barrel selling at 64 dollars on the international market.

This is quite inspiring, hence the readjustment in view of raising FCFA 82 billion more in 2018. The signs are assuring considering the figures posted on the website of the National Hydrocarbons Corporation site.

Even though crude oil production in the fourth quarter of 2017 dropped to 6.559 million barrels from October through December compared to 7.709 million barrels during the same period a year earlier, sales increased remarkablyt to 397.953 million dollars from 334.822 million dollars the year before. The amount of money injected into the State treasury during that period increased several folds from FCFA 53 billion to FCFA 113.3 billion.

The reasons for readjustment go beyond oil and fiscal revenue. As explained by authorities of the Ministry of Finance, the fluctuation on the international market of the dollar has been having positive impact on the economy, as FCFA 40 billion financing relics for already finalised projects is being awaited from the commercial banks.

Other major modified revenue sources include: physical revenue tax, tax on non oil company benefit and tax on revenue paid to people residing out of Cameroon, all amounting to 10 billion CFA.

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