Article 01.
China-Africa Cooperation: A Driver of Economic Development for Africa
Introduction
The ninth summit of the Forum on China-Africa Cooperation (FOCAC), held in Beijing, offers new opportunities for African economies. At the summit, which brought together more than 50 African heads of state, the Chinese government pledged 360 billion yuan, or $50.7 billion, in financial assistance to the continent for the next three years (2024-2027). This new envelope, up from 2021 ($40 billion), reflects China’s willingness to reaffirm its commitments to Africa and consolidate its economic relations with the continent.
Indeed, trade between China and Africa reached $167.8 billion in the first half of 2024, making China Africa’s largest trading partner. This dynamic reveals not only China’s strategic interest in the continent, but also the opportunities available to African countries to accelerate their economic development. As Africa seeks to diversify its sources of financing and boost growth, cooperation with China could play a critical role in the structural transformation of its economies. In this essay, we examine how this cooperation can act as a driver of economic
development for Africa.
1. Cooperation beneficial to
African economies
China-Africa cooperation is often seen as a win-win partnership. On the one hand, China enjoys access to abundant natural resources, such as oil, minerals, and agricultural land. On the other hand, African countries find in China a partner capable of financing crucial infrastructure and development projects.
Infrastructure
investment. The lack of sustainable infrastructure is one of the main constraints to economic development in Africa. According to the African Development Bank, to achieve the Sustainable Development Goals, Africa
needs nearly $170 billion per year for its infrastructure. Indeed, thanks to Sino-African cooperation, African countries benefit from several bank loans, which make it possible to finance many infrastructures intended to boost African growth (railways, ports, roads, etc.). China’s infrastructure investments
and achievements amounted to $25.7 billion in 2018. 31% of infrastructure projects in 2022 in Africa are owned by the Chinese compared to 12% for Western powers. This illustrates the fact that China remains a strategic partner for Africa in terms of infrastructure development.
Partnerships between Chinese
and African companies promote the transfer of advanced technologies. For example, in the
telecommunications sector, Huawei
and ZTE have developed next-generation mobile networks in Africa. This facilitates access to digital services for millions of people, drives innovations, and strengthens
the technical skills of the African workforce.
This partnership will boost
trade. China-Africa trade grew
by 5.5 percent to a new record of 1.19 trillion yuan (167 billion U.S. dollars) from January to July 2024. China remained Africa’s largest trading partner, exporting manufactured goods and importing natural resources. This trade supports the economic development of many African countries, while providing China with the raw materials needed for its industrial growth.
Foreign direct
investment. Chinese FDI has increased significantly. In 2023, for example, China directly invested $1.82 billion in Africa, an increase of 4.4% year-on-year. These investments cover a variety of sectors, including energy, mining, and manufacturing. They create jobs, stimulate local economic development and increase industrial capacity. Chinese FDI also promotes Africa’s industrialization and economic diversification.
2. But it (cooperation) is not
without challenges
Growing debt. Debt distress is one of the major problems that African countries face due to loans from China. Some African countries such as Mozambique and Angola have already struggled to repay their debts, which are often linked to Chinese-funded projects. According to an analysis of World Bank data conducted by the China-Africa Research Initiative, China held 21% of Africa’s debts in 2021. Chinese loans accounted for
30% of African countries’ debt payments during the year, illustrating a significant share of African countries’ financial obligations. These loans, often with commercial and non-concessional conditions, make it difficult to repay, exposing some countries to the risk of default.
Economic dependence. Economic dependence is another critical challenge. Chinese investments are largely targeted at strategic sectors such as infrastructure and natural resource extraction. While these projects boost growth in the short term, they tend to reinforce a structural dependence on China, whether through technology or labor.
Conclusion. China-Africa cooperation is beneficial to African economies. It offers many advantages in terms of investment, market access and infrastructure development. However, this cooperation must be managed in a prudent manner to avoid or at least mitigate the risks of excessive debt, unfair competition, environmental impacts etc.
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Haiwang Djamo Ferdinang
Research Analyst
Cameroon Economic Policy Institute (CEPI)
Article 02.
Cameroon needs more Capitalism
Introduction
Over the past decade, the size of government and the number of civil administrators have increased. But the experience of the past decade shows that capitalism and entrepreneurship have done more to slow poverty than state-oriented policies. Although the majority of workers are employed in the informal sector, they are employed, which reduces dependence on the welfare state. Some have argued that every country should have a social safety net for the most vulnerable, but the majority of Cameroonians are entrepreneurial, and creating a foundation for individual entrepreneurs and micro-SMEs to thrive will promote the creation of jobs that will allow citizens to thrive.
Capitalism promotes job creation
In Cameroon, capitalism has already created countless jobs, especially since the majority of workers are trapped in the informal sector. There are currently about 8 to 9 million people of working age and 78.3% of them are self-employed. This proportion is higher in the female labour force (85.1 per cent) than in the male labour force (70.6 per cent), and the service sector (35 per cent) has the largest number of workers in the informal sector. The average salary of workers in the informal sector is 83,409 CFA francs per month. In urban areas such as Douala and Yaoundé, these entrepreneurs earn 96,367 CFA francs for workers in urban areas and 59,520 CFA francs for those in rural areas, i.e. a minimum hourly wage of about 669 CFA francs. The average monthly income of employers (181,200 CFA francs) is almost double that of the self-employed (93,500 CFA francs).
Capitalism will reduce poverty: As in most developing countries, some people in our society face difficult socio-economic realities. Not being able to pay for your children’s education and/or your next meal is not something we can take for granted. It is estimated that 37.5 per cent of the country’s population lives below the poverty line, with this figure exceeding 70 per cent in some areas. However, this is lower than the 46% of people who were living below the poverty line in 2022.This is worrying by any measure, but at the end of the day, we need entrepreneurship and not a wider social safety net. By making it easier to start and register a business, more people will be lifted out of poverty and avoid dependence on the state.
“It is true that capitalism can exacerbate poverty, but only if people are not empowered. If we train people and make it easier for them to start businesses with acceptable levels of taxation, entrepreneurship will create jobs and prosperity while reducing poverty in the long run.”
Capitalism encourages innovation
The adoption of capitalism and the reduction of the role of the state have spurred innovation in Cameroon. From internet access to electricity supply, a large number of services have been developed thanks to foreign equipment, machinery and expertise. The percentage of the population with access to electricity has increased from 29% in 1991 to 71% in 2022.At the same time, the number of solar system providers has increased, with companies such as NNPIC Solar Energy, ProElec, Renewable Energy Innovators, and Solar Energy Cameroon, making energy more affordable for a range of companies. Businesses can now install their own electrical system and avoid power outages that reduce productivity and lead to lost revenue. At the same time, drones are becoming accessible to farmers and industrial manufacturers in a range of sectors, thanks to the creation of new companies, from Tagus Drones to Cameroon Flying Labs.
Figure 1: The upward trend of SMEs must continue
Source: MINPMESA (page 4) MINPMESA (Page 4)
- 3. Current attempts to create social safety nets are costly
Cameroon has currently borrowed $110 million from the World Bank to create/establish an effective social safety net for the most vulnerable. Every civilized society must take care of its “vulnerable.” But we must nevertheless be responsible enough to recognize the cost – collectively.
This program has three objectives;
- The first is to lay the groundwork for a safety net system and support project management ($7.8 million).
- The second component is the Pilot Cash Transfer Program with accompanying measures to boost household productivity ($36.3 million).
- The third component is the Public Works Pilot Program ($5.9 million).
Someone will have to pay for a social safety net and the number of beneficiaries will increase. The creation of a welfare state must not become the answer to unemployment and precariousness. Business-friendly reforms will create jobs in the long term without imposing huge costs on taxpayers or the state!
What is the cost of free company registration for 1000 companies in Cameroon?
On paper, registering a company in Cameroon costs between 40,000 and 60,000 FCFA, but in reality, this cost could be higher. The suspension of registration fees for 1000 companies will cost 60 million FCFA or 99,000 dollars. Helping businesses and funding a social safety net are not mutually exclusive, but the long-term benefits of supporting businesses are enormous, both for governments and civil society.
To oppose a social safety net is to incur the wrath of most of us. But we have to challenge ourselves to think about the society we want. We cannot promote and encourage “dependency” when it is clear that more than 80% of people of working age are entrepreneurial. If we allow social safety nets to become easily accessible to all, it will become problematic to finance them.
Conclusion
In a capitalist economy, capital goods – such as factories, mines and railways – can be owned and controlled by the private sector, while labour is bought for a cash wage”.
If an enabling environment is created and people are equipped with the right tools, entrepreneurship will continue to grow in Cameroon, creating jobs, boosting prosperity for all, and reducing poverty. For our development experts, we cannot focus on the Sustainable Development Goal (SDG 1) without focusing on decent work (SDG 8).
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Article 03.
ZLECAF : The urgency of simplifying Export/Import procedures
Introduction
The African Continental Free Trade Area (AfCFTA) will increase intra-African trade by removing or reducing tariff and non-tariff barriers. This will facilitate the export and import of goods. However, the complexity often associated with export procedures can be a major obstacle to the growth of trade. Hence the need to simplify and popularize export procedures which are an effective way to accelerate the export of goods.
The fluidity of commercial transactions is essential to promote the competitiveness of companies. Thus, simplification and effective popularization of export procedures are essential to encourage trade and strengthen the performance of companies. This policy brief highlights the importance of simplifying export procedures for companies.
- Why Simplify Business Procedures
Simplifying trade procedures makes it easier for businesses to access production inputs and encourages greater participation in global value chains, including for small and medium-sized enterprises (SMEs). It also helps reduce overall trade costs and increase economic welfare, particularly for developing and emerging economies. It is important to note that an additional day of delay reduces trade by 1% and other studies show that one day of delay is equivalent to a 0.5% tariff.
The OECD shows that the number of signatures and documents required for a trade transaction is correlated with the number of days spent at the border and if sub-Saharan Africa reduces the number of signatures to reach the world average, trade flows could increase by about 81.5% (Wilson, 2005; Korinek & Sourdin, 2011). Cameroonian companies will save time and trade flows will certainly increase following the simplification and popularization of trade procedures.
- Simplified procedures can contribute to a more efficient supply chain
Cameroon is lagging behind in terms of logistics performance. To export a product, for example, 11 documents must be completed, while on average, this number varies between 6 and 8 in a sample of emerging economies (Cahier économique du Cameroun, 2012). The quality of infrastructure, the ability to track shipments, and the time to destination constitute a huge challenge. Simplifying export procedures should therefore reduce delays by speeding up customs clearance processes and minimizing administrative delays. This would allow goods to arrive at their destination more quickly. Companies could also improve inventory management and better respond to market demand. Next, note that the introduction of export facilitation measures for goods can help minimize costs by reducing customs processing fees and avoiding costs related to documentary non-conformities. That said, companies can reduce costs related to delays and penalties. Additionally, by simplifying export procedures, companies can improve visibility and traceability of shipments. By having a better understanding of the location and condition of goods at any time, companies can make more informed decisions and anticipate potential issues, contributing to a more robust and responsive supply chain.
- Businesses can increase their business opportunities and expand their customer base
Slowness and red tape hinder the movement of goods across borders for traders. Indeed, when transit times are increasingly long, exports decline (WTO, 2022). Similarly, when the legal framework deteriorates, exports also decline (WTO, 2022). With the simplification of customs formalities and the reduction of trade barriers, companies will therefore be able to export more easily to new markets. This allows them to access a wider customer base and take advantage of the opportunities offered by free trade agreements. Simplified export procedures generally lead to a reduction in the costs associated with international trade, such as customs duties, transport costs and administrative costs (Martial Bindoumou, Djamangai Ludé and Elomo Zogo T. 2014). This makes products more competitive in foreign markets and allows companies to explore new market opportunities. Simplifying procedures improves responsiveness and flexibility. Companies can be more responsive to fluctuations in demand in international markets. They can more easily adapt their offerings to meet the needs of foreign customers, which can lead to sales growth and increased customer loyalty. In addition, by expanding their customer base through simplified export procedures, companies can strengthen their competitive position in the market. They can conquer new markets, diversify their revenue streams and differentiate themselves from their competitors by offering quality products and services at competitive prices. This will especially benefit Cameroonian SMEs.
Simplifying procedures improves responsiveness and flexibility. Companies can be more responsive to fluctuations in demand in international markets. They can more easily adapt their offerings to meet the needs of foreign customers, which can lead to sales growth and increased customer loyalty. In addition, by expanding their customer base through simplified export procedures, companies can strengthen their competitive position in the market. They can conquer new markets, diversify their revenue streams, and differentiate themselves from competitors by offering quality products and services at competitive prices. This will especially benefit Cameroonian SMEs.
Conclusion
Simplifying trade procedures is essential for businesses. It helps speed up exports of goods. It also promotes greater participation in global value chains, including for small and medium-sized enterprises (SMEs). In a free trade context, exports will increase and the business climate would be improved. Cameroon should improve its logistics performance, reduce and/or consolidate administrative formalities and improve the quality of its infrastructure. It is therefore important to strengthen cross-border administrations to reduce export delays, computerize the administrative system to reduce transaction costs, reduce the digital divide and create an institutional framework where respect for the law and freedom of trade prevail, a vector for facilitating trade. This would promote transparency in exports.
AUTHORS
Mr. Henri Kouam Haiwang Djamo
Founder, Cameroon Economic Policy Institute Research Analyst
Article 04.
Women’s Property Rights and Economic Rights Matter
Women in Cameroon constitute about 70 percent of the population, but only 1 percent of them own land. Women’s property rights matter and they should be upheld, not to protect or enforce some foreign concept of equality, but because women contribute more to the Cameroonian economy and deserve to be taken more into consideration. However, in Cameroon, rural and indigenous communities hold customary rights over the vast majority of forests, pasture and land, which support the livelihoods of local community. This article will outline women’s contribution to the Cameroonian economy, the laws that protect women’s rights and why we should all become allies for Women
Property Rights.
1. Women Contribute a lot to the Cameroonian Economy
The majority of women work in food-producing agriculture, informal sectors and face underemployment, which hinders the exercise of other rights, including participation in political life.
In Cameroon, 30.39% of those affected by conflict are women, followed by children (17.13%) and the female labor force participation has been falling since 1990. According to the Institute for National Statistics, more than half of the IPUs (56.1%) are headed by women and more than half of the IPUs (56.1%), promoters are female. Meanwhile, the proportion of IPUs headed by women is higher in industry (67.5%) and trade (57.2%) – underscoring the need for property rights.
2. Laws that Protect Women’s Property Rights
Cameroon’s primary land law, is the Ordinance No. 74-1 of 6 July 1974, which establishes land tenure rules following the 1972 unification of the country. A companion law, Ordinance No. 74-2 of 6 July 1974, equally addresses the governance of state land. Meanwhile, the constitution gives both men and women the right to acquire or own immovable property anywhere in Cameroon is a fundamental right guaranteed by the Cameroon Constitution. Women and men are entitled to quietly enjoy possession of his land without any interference as the slightest entry on another person's land without his/her consent constitute trespass to land. “Though a 1974 Land Tenure Ordinance provides women with equal rights to property ownership, in reality customary tenure practices which discriminate against women sometimes trump national laws”
In some cases, customary systems have provided women with secure rights to use land and resources however, recently women have experience greater difficulties protecting rights under these systems. Women’s property rights are particularly vulnerable after the death of a husband, as traditional tenure agreements often prohibit women from inheriting property.
3. Some Progress has been made to Protect Women’s Rights In some areas of Cameroon, anecdotal evidence suggests some progress is being made in increasing women’s access to land and tenure security. In urban and peri-urban areas some women have taken advantage of opportunities to purchase or rent plots, while in some rural areas, women farmers are developing multiple avenues through which to access land (e.g., church membership, cooperatives) so they can be less dependent on their husbands for land access. Overall, however, virtually all observers concur that women farmers in Cameroon are facing increasingly insecure access to land and tenure rights.
4. Land Shortages has Caused Men to Withdraw their Rights
Many women have found that land scarcity has led male authorities to withdraw rights that women previously held. Cameroon is in the process of developing a new family law, which will govern issues of marital property rights. The law will hopefully be another step in helping women realize the constitutional promise of equality. Donors can assist with the development of the legal framework, and, perhaps more importantly, with public awareness campaigns and support for women’s legal aid. These efforts would help women and men learn about the requirements of the law and give them practical knowledge about how land rights can legally be transferred within families and between generations.
5. Why We should Become Women’s Allies for Property right
Women in Cameroon produce 80% of the country’s food needs yet own only 2% of the land. The inability of women to freely access and control productive resources places them in a weaker position in terms of agricultural productivity and economic growth, food security, family income and equal participation in governance. We need to support women’s contributions to economic and social life, not chip away at it; While 39% of the national population lives below the poverty line, this rate rises to 51.5% for women. 79.2% of them are underemployed. Enforcing property rights for women will reduce poverty and boost prosperity. Some local organizations, including CEPI and Nsoh are pushing for stronger property rights, but this will require building allies across society.
“Laws and norms are not enough, we must reinforce the view that women are an important pillar of the Cameroonian economy and their rights to own property are sacred”.
The Women Allies for Property Rights (AWPROR) project aims to strengthen women’s property rights by providing them with greater access to customary justice systems and raising communities’ legal awareness. Laws, projects and events are all useful. But to protect women’s property rights, we must understand and appreciate their contributions to our community. Protecting women’s rights transcends good governance and accountability, enforcing property rights for women will lead to broad-based, inclusive and sustained economic growth. If Cameroon dreams of achieving emerging country status by 2035, it should improve women’s property rights, not chip away at it.e
Article 05.
Before Promoting Trade under the AfCFTA, We Must First Understand It!
Introduction
Since African countries signed the African Continental Free Tarde Area (AfCFTA) in 2018, several African countries have begun trading under it, with over 17 countries trading under an initiative called the Gilded Trade Initiative (GTI). However, signing the agreement was important, but to implement it effectively, we must understand it. Engagement with civil society reveals there is no clarity on how to export under the AfCFTA, what documents to complete and what fees are payable where. Before we go about advocating for free trade, we need to understand what progress has been made with the African Continental Free Trade Area (AfCFTA). In this article, we look at the progress that has been made so far on the African continental free trade area and discuss the main protocols in greater detail. The rationale is simple, to advocate for free trade, we must first understand it.
In a step that TAKES THE AFCFTA well above other free trade agreements, on February 19, 2023, the African Union (AU) Assembly of Heads of State and Government adopted three new protocols to the AfCFTA agreement — on investment, intellectual property rights, and competition policy.
Phase I: Trade in goods, services, and dispute settlement
Despite trading under the agreement being permitted, negotiations continue for various details such as tariff schedules, rules of origin, the Trade Remedy Guidelines, and services commitments for the five priority sectors for liberalization (Transport, communication, financial, tourism, and business services). Phase one has been completed but countries like Cameroon must remove policies that unilaterally bar foreign networks from coming into the Cameroonian market. The United Nations finds the internet to be expensive in Cameroon; competition could change that.
“To promote intra-African trade without liberalizing key sectors like communication will slow the pace of integration, allowing consumers to pay higher prices for much longer. Only consumers will bear the brunt as their hopes for a faster pace of development are dashed by protectionism and an unwillingness to adapt competitively”
Phase II: Intellectual property rights, investment, and competition policy
Negotiations for Phase II have commenced and were disrupted by the COVID-19 Pandemic, resulting in delays. However, the negotiations to conclude the outstanding Protocols of Phase II are well advanced and should be completed soon. Phase two has been completed and signed off by the AU General Assembly.
Phase III: Digital trade and women and youth in trade
Negotiations for Phase III will commence upon the completion of Phase II is still being negotiated and should be ready by the end of 2024. Women and youth tend to be marginalized from the policy space, but the AfCFTA seeks to change this. We cannot forget that Africa is the continent with the youngest population worldwide. As of 2023, around 40% of the population was aged 15 years and younger, compared to a global average of 25%. It is vital to ensure that cash-strapped youths can trade effectively under the AfCFTA, but beyond protocols, this involves sensitizing them on export procedures, vulgarising trade finance, and actively enabling communication between young exporters and trade agents. However, this protocol is the first step to ensure that youths have a chance at exports.
In five years, one has to congratulate African governments and the Au for the progress that has been made so far. Now, the foundations for free trade are set and countries can soon begin trading wholly under the African Continental Free Trade Area (AfCFTA). Now that the foundations for trade have been set and the “Guilded Trade Initiative” is operational with over seventeen countries trading under it, Africa is set to begin trading with zero tariffs.
“If Intra-African Trade is to success, we must understand where we are regarding implementation and what we must do to accelerate exports and imports under the AfCFTA. We cannot promote what we do not understand”
Conclusion
Countries must ensure that businesses and the private sector are knowledgeable about trading procedures under the AfCFTA. After all, the private sector, not the government, will accelerate the implementation of the African Continental Free Trade Area (AfCFTA). While we stay happy and excited about the prospect, we should know where we stand. After all, we cannot promote something we do not understand.
One thing is worth reiterating, regardless. Free trade will boost Africa’s economic development, support real income growth, and boost inclusive development. However, this will not be possible without quantifiable policies that seek to upskill individuals, businesses, and groups to ensure faster and greater competitiveness over the medium term. Anything short of quantifiable metrics could compromise the acceleration of tariff-free trade and the integration of value chains.
The foundations have been set with the finalizing of the trade protocols; Now, we must understand what they mean for us locally, adapt regulations and legislation where necessary, and create a framework for businesses and individuals to trade effectively. The African continental free trade area will not be executed if we do not understand how our tariff schedules are implemented. Free trade is about people, but for the development gains to become a reality, Africans must understand it and engage in how it is implemented.
We cannot advocate for free trade if we do not understand it
Even as ports and domestic legislation are being tweaked to accommodate the AfCFTA, it is important to take stock of where we are after five years. After being approved at the regional level, trade protocols must be instrumentalized at the local level, which will involve cross-agency work and careful processes that count for the heterogeneity in the process without making trade even more cumbersome.
CEPI recommends that a step-by-step guide be put up on the Ministry of Trade, Customs and the Cameroon National Shippers Association to ensure that all traders know how to export under the AfCFTA. Although these will be provisional, it will provide a bridge to full implementation once all trade protocols have been approved and implemented.
Henri Kouam
Executive Director
Cameroon Economic Policy Institute (CEPI).
Article 06.
Cameroon Must Push for Implementation of EU Trade Agreement Despite 70 516,2 billion Import Duty Losses
Introduction
In its most recent annual report on the economy, the Ministry for Economy and Planning revealed some expected but shocking statistics regarding Cameroon’s trade with the EU. As a result of implementing the trading agreement with the European Union Economic Partnership Agreement (EPA), the government is losing FCFA 70 516,2 MILLION in customs revenue.
Naturally, this has caused some consternation among poverty activists who think that money could be used to improve the social safety net and some economists who think such sums could accelerate deleveraging Cameroonian’s economy. In this article, we depolarize the discourse and provide an understanding of trade under the AfCFTA and strategies to improve the government’s tax revenues to plug the FCFA 70 516,2 billion. Meanwhile, this article unequivocally argues and advocates for continuing trade under the AfCFTA.
“Now is the time to improve the standards of Cameroonian products and ensure they are standardized to meet international standards. We must promote local champions, not contemplate any form of unilateral measures”
Cameroon – EU Trading Relationship
The European Union (EU) is an important trading partner for Cameroon and they both concluded negotiations on an INTERIM ECONOMIC PARTNERSHIP AGREEMENT in December 2007, approved by the European Parliament in June 2013 and ratified by Cameroon in July 2014. The EPA allows duty and quota-free trade, gradually removing duties and quotas over 15 YEARS ON 80% OF EU EXPORTS to Cameroon. Although free trade with the EU promotes economic growth and sustainable economic development, falling revenues from import duties are nonetheless concerning.
What is the Economic Partnership Agreement (EPA)
The EPA covers the trade regime for goods and issues such as customs duties and non-tariff measures, trade facilitation, technical barriers to trade, and forestry governance in timber and forest products. Its agreement expects to reduce tariffs for EU products destined for Cameroon by 80% in 2021 and 100% in 2023. The agreement provides avenues for the EU to support Cameroon’s fiscal adjustment to reduce reliance on import duties as it phases out tariffs by 80%.
Over the last decade, Cameroon imports from the EU averaged €2 billion and exports averaged €1.5 billion, with a persistent deficit that averaged €520 million. Looking a total trade between the EU and Cameron, we find that two-way trade is dominated by agricultural products (21.1% of total trade), fishery (0.7%), and industrial products (78%) (EUROPEAN COMMISSION, 2023).
Important Information on the Implementation of the Trade Agreement
The implementation of the Economic Partnership Agreements with the European Union Great Britain and Northern Ireland continued in 2023, with the completion of the 7th phase of the tariff dismantling process, and the start of the 8th phase. The 7th phase involved reducing import duties on 90% of products in the second group, to encourage local production and industrialization. These products include plaster, lime, marble, clinker, inputs for the food industry, motor vehicles for transporting goods, trailers and semi-trailers, wheelbarrows, and certain vehicle parts and accessories.
This 7th phase also saw the dismantling of 30% of products in the third group, with a high tax yield. These include fuels, cement, cars, passenger vehicles, motorcycles, cereals such as wheat, rye, barley, sorghum, children’s food preparations, ceramic tiles, sinks, dishes, figurines, and pipes, flat-rolled products of iron or steel, iron or steel bars and sections, paper of the kind used for toilet paper and make-up remover towels, television receivers, video monitors and video projectors, tractors for semi-trailers, etc. Phase 8 is scheduled for completion in August 2024, and aims to dismantle 100% of products in groups 1 and 2, and 40% of those in group 3.
Cameroon is losing Money in terms of Import Revenues
As a result of implementing the trade agreement, Cameroon lost about 70,516,2 billion, which is concerning but is a natural consequence of free trade. Cameroon will lose some import revenues, adjust its fiscal policy, and raise taxes other than accelerate industrialization and exports. However, some actions should be undertaken to improve the Cameroon – European Union Trading Agreement:
- Negotiation of rendez-vous clauses on trade in services and investment in 2024.
- Holding focus groups to monitor the impact of the EPA on select groups
- Capacity-building for small and medium-sized enterprises (SMEs) to enable them to take better advantage of the opportunities offered by the EPAs.
- The development of training and technical assistance programs to support companies in their internationalization process and compliance with international standards.
- Greater involvement of civil society organizations to monitor the implications of the agreement
Even so, we must accelerate the implementation of the EPA
The Economic Partnership agreement benefits large companies and the positive spillovers to small and medium-sized enterprises still need to be felt. This is not because of the trade agreement, but rather because Cameroonian products are not sufficiently competitive nor branded to meet international standards. For example, Cameroonian wine may be subject to costly compliance costs that discourage exports to Europe, so companies must weigh the long-term benefits of investing in certification against the short-term cost.
Meanwhile, SMEs equally lack the technical know-how to export to the EU, and the Chamber of Commerce and Ministry of Small and Medium-Sized Enterprises focus on ensuring that locally made products meet international standards and comply with ISO standards. The Normes and Quality Standards Agency (ANOR) helps companies certify their products, but SMEs need more help to finance the obtention of required certificates in other to exports.
Furthermore, Cameroonian farmers and agri-processing companies have an advantage as their products comply with stringent EU standards when it comes to the use of fertilizer and industrial farming products. This is a unique opportunity that makes Cameroonian products more accessible than those from Latin America, for example, due to lower wage costs. Cameroon is undergoing a very natural process, but the focus should be on improving the capacity of local producers and educating SMEs on export procedures. Finally, business-to-business networks such as a more forward-looking collaboration between the Cameroon and EU Chamber of Commerce will accelerate the interaction of local suppliers into regional value chains.
AUTHOR
Henri Kouam
Founder, CEPI
Article 07.
Fitch Maintains Cameroon’s Rating at “B” with Negative Outlook
Introduction
In its most recent World Economic Outlook, the IMF praised Cameroon as one of the few countries that continues to invest while reducing its debt burden. That is good, but reducing debt burdens is not sufficient to lower our borrowing rate sin international markets. Meanwhile, Fitch Ratings has given Cameroon a “B” with a negative outlook. In this article, we look at the main drivers of Cameroon’s rating and propose three strategies to improve its credit rating over the long run.
What Influenced Cameroon’s Recent Rating
1. Strong GDP and Falling Debt Levels Drove Cameroon’s Debt Rating: Cameroon’s “B” rating is supported by a diversified and resilient economy, moderate levels of government debt, and a falling deficit with a manageable maturity schedule. Fitch forecasts general government debt to fall to 39.2%
by 2025, driven by low fiscal deficits and strong GDP growth.
● Resilient GDP Growth:
Fitch forecasts Cameroon’s economy will grow by 3.9% in 2024 and 4.1% in 2025, from an estimated 3.3% in 2023. As oil production will decline in 2024 and 2025, growth will be driven by non-oil sectors notably agriculture, forestry, and transport and energy infrastructure boosted by large public investments. Downside risks stem from renewed inflationary pressures, volatile global commodity prices, lower external demand from key trading partners, weak project implementation, and persistent security risks.
● External Position: Cameroon’s current account deficit will fall slightly and the projected decline in oil exports will be partly offset by higher value-added exports supported by policies to promote non-oil exports and import substitution. Secondly, The Economic and Monetary Community of Central Africa’s reserve position strengthened in 2023, at USD11 billion at end-2023, covering 4.9 months of imports, due to higher oil export receipts and stronger compliance with foreign-exchange regulation.
2. Political Uncertainty and Poor Governance Hold Back Rating: Persistent PFM weakness due to poor treasury management, underestimation of spending, unplanned security expenses, fuel subsidy carry-over, and accumulation of domestic arrears. The stock of arrears almost doubled in Q1 2024, which is worrying (Figure 1). The fuel subsidy carryover (0.4% of GDP) to 2024 means the deficit declined on a cash basis from 1.2% in 2022 to 0.4% of GDP in 2023.
“CEPI applauds reforms to improve debt payment capacity, such as making transfer orders available to the regional central bank (BEAC) sooner and enhancing communication and coordination between all intermediaries”.
Henri Kouam
Cameroon’s Fiscal Deficit Dynamics in 2024
The fiscal deficit will likely fall to 0.5% in 2025, due to lower oil prices and production, but non-oil revenue will increase owing to revenue administrative measures, digitalization of processes, and tax exemption reductions. Even so, the cash deficit is expected to widen due to a bloated public sector and large infrastructure investments.
Limited Financing Options
Cameroon’s financing needs for the budget will increase again in 2024 due to higher cash deficits. As a result, CEPI expects external debt amortization to average 1.9% of GDP in 2024 and 2025, including a Eurobond payment of 0.1% of GDP per year. However, reform momentum will unleash IMF funds under Cameroon’s current program.
Elections Could Slowdown Reforms
As Cameroon enters an election year, the credibility and durability of reforms and spending caps will be tested, especially as the election could slow the implementation of the reform, including fuel subsidies reduction (budgeted at 0.6% of GDP in 2024 from 3.7% in 2022), through additional pump prices increases, after 15% in 2024 and 21% in 2023.
Cameroon’s IMF program
In 2024, the IMF concluded the fifth review under the Extended Credit Facility /Extended Fund Facility, disbursing 0.2% of Cameroon’s GDP. Approving the 12-month extension means Cameroon must and should do more to accelerate the implementation of reforms. The 12-month extension of the programs to July 2025 (0.4% of GDP), and approved a $183 million (0.6% of GDP) arrangement under its Resilience and Sustainability Facility. However, Cameroon faces limited domestic financing flexibility.
What Could Cause a Rating Downgrade?
● New external arrears accumulation and/or heightened fiscal and external financing pressures could negatively impact public finances and Cameroon’s external position.
● Secondly, heightened political instability or security threats particularly if they are significant, could impact economic activity and access to finance. As the Anglophone crisis persists, Cameroon will inadvertently pay more when borrowing in international markets.
● A marked and sustained increase in government debt/GDP, for example, as a result of a widening in the budget deficit due to social or security pressures or weaker GDP growth could worsen public finances and cause a rating downgrade
What Could Improve Cameroon’s Credit Rating
● Public Finances: Sustained improvements in public finance management sufficient to improve confidence in Cameroon’s ability to prevent the accumulation of external arrears and obtain external funding on time.
● Structural: A material easing of political and security risks, for example, as evidenced by reduced risks around the eventual presidential succession or an improvement in governance
indicators.
● Macro: Improvement in medium-term growth prospects that results in a significant increase in
GDP per capita, for example, following the implementation of reforms that improve the business
climate and diversify the economy
Recommendations
The government should improve treasury management by limiting the use of direct interventions by the National Hydrocarbons Corporation and of exceptional spending procedures, such as capping treasury advances without a budget allocation to XAF15 billion per quarter. However, security risks could result in unplanned expenditures.
AUTHOR
Henri Kouam
Founder and Executive Director, Cameroon Economic Policy Institute (CEPI)
Article 08.
Free Trade Can Reduce Inflation For Consumer Products
Introduction
Following the decision to reduce fuel subsidies in 2023, inflation rose in 2023 and is set to rise further in 2024. In 2023, inflation averaged 6.3% and is forecast to reach 7 – 7.5% this year. This is higher than the CEMAC threshold of 3% inflation, which is designed to ensure governments and central banks work towards limiting the increase in the price of goods and services. The decision to increase the price of Gasoline and Diesel will increase the cost of production for most companies, leading to higher prices for food, services, and consumer products.
In this article, we illustrate why the government should leverage free trade agreements to ensure that prices rise gradually. When prices rose initially, the Cameroon Economic Policy Institute (CEPI) called for the government to suspend import duties on vital products such as rice and pasta to support domestic consumption and the time needed for consumers to adjust to higher prices. While the government suspended import duties on a shipment of rice from Indonesia.
Cameroon has signed and LEGISLATED FOR THE ADOPTION OF THE AFRICAN CONTINENTAL FREE TRADE AREA (AFCFTA) and has submitted its tariff schedules. However, implementation of the AfCFTA is not up to governments but businesses. So, the private sector must take a more proactive approach towards importing under the AfCFTA rules and the GUIDED TRADE INITIATIVE (GTI). There are benefits to promoting free trade as a tool to lower the price of goods and services.
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Competition will Cause the Prices of Local Products to Adapt: Free trade increases access to products from other countries such as rice, pasta, detergent, etc. When products from other countries enter the Cameroon market, this increases competition for companies that sell similar products. When this happens, businesses tend to engage in “price competition” causing the prices of goods and services to fall. Suppose flour from France, wheat from Ukraine, beauty products from the United Arab Emirates (UAE) and orange juice from Germany must compete with local firms. In that case, consumers will benefit from lower prices.
Under the AfCFTA, businesses have a unique opportunity to access new markets, causing them to lower their prices to sell more goods. At present, Cameroon has only received one shipment of tea under the AfCFTA, more businesses, import companies, and traders should import under the AfCFTA and ensure that zero tariffs are reflected in domestic prices.
Free Trade will Reduce the Cost of Inputs: Cameroon imports intermediate products such as packaging material from African countries (16% OF TOTAL TRADE) and machinery from more advanced countries. For example, the packaging used by some companies in Cameroon is produced with inputs and machinery from countries like India, the United States (U.S.), and China. Import duties for machinery have been suspended in the 2024 budget in an attempt to support business innovation and competitiveness. This openness to trade should extend to other sectors as free trade will cause innovation to flow from other countries into the Cameroonian economy. China innovated much quicker by learning and copying from U.S. companies; Cameroonian companies should hope to do the same.
“Free Trade will Encourage Competition and Innovation because when more companies face competition from abroad, they must adapt and improve their products by innovating and finding more efficient ways to compete against foreign competition. This means better quality products at low prices for consumers”
Cameroon’s Trade with Other Countries
Cameroon’s trade balance is structurally negative. According to WTO DATA, in 2022 Cameroon imported USD $7.8 billion worth of goods against USD $5.9 billion in 2021. In 2022, the five main clients of Cameroon accounted for 62% of the country’s total exports and include the Netherlands (26.8%), India (14.2%), France (9.9%), Spain (8.5%), and Italy (6%). As per imports, the main suppliers were China (15.8%), India (10.8%), France (8.2%), the Netherlands (3.6%), and South Korea (3.5%).
Rather than engage in unilateral measures to prevent exports, local businesses, and special interests should focus on innovating and upskilling entrepreneurs to become increasingly competitive. After all, while there are plenty of talented Cameroonians, but we won’t be producing cars and industrial machinery this year. Rather than view the current account deficit as the result of free trade with other countries, we should see it as a symptom of low levels of industrialization. Acknowledging this will enable a rethink of investments that will improve business sector competitiveness.
As such, free trade should instead be viewed as an opportunity to address rising prices and mitigate the cost-of-living crisis that has culminated in inflation averaging over 7.8% IN 2023.
Free Trade will encourage Innovation and Cheaper forms of Value Creation: When companies import machinery from abroad, it allows them to produce more effectively. Cameroon cannot produce all the necessary machines, nor should it try to. When Cameroonian companies import new machinery, it allows them to produce more effectively and innovate their methods of production. Free trade will lead to cheaper and more innovative methods of production, which will cause the prices of basic goods like detergent, flour, and water to fall further. This will benefit consumers and improve the standards of living for consumers across Cameroon.
The AVERAGE TARIFF IN CAMEROON RANGED FROM 14% – 65% and while some tariffs are designed to support local industry, they should not be abused to reinforce the need for autarky and self-sufficiency. We can support and promote locally made products via the “Made in Cameroon” initiative; however, this does not stand in conflict with promoting free trade. There is no reason why consuming local flour should prevent us from consuming British Quaker oats or Saudi cereals. Free trade can be a win-win for the government, the private sector, and Cameroonian citizens.
“Imports Do not Signal the decline in support of local industry, but rather the need to complement local demand for goods and services that we cannot produce or may be too expensive to produce over the medium term”
What Can We Learn from the World?
While the United States (U.S.) and China are locked in a trade war and impose unilateral tariffs against each other, consumers are bearing the brunt via higher prices. Ian Bremmer, a political scientist at G-Zero media, argued that lowering tariffs will bring down inflation, and failing to do so partly explains why U.S. inflation has been higher. As the U.S. switches production to Mexico, the benefits of nearshoring are not yet felt in local inflation outcomes. So, trade barriers only increase the cost of goods, not the reverse.
Free Trade Will Lower Inflation and Improve Standards of Living
Free trade agreements (FTAs) have been found to have a significant negative effect on domestic inflation rates. Studies have shown that the expansion of FTAs leads to a reduction in Consumer Price Index inflation, especially in countries with a low level of openness. Cameroon should seize the opportunity in Free Trade to lower the prices of goods and services and reduce the implications of higher fuel prices on consumer disposable incomes.
Published in Cameroon Business Today, No. 357 Wednesday 03 – Tuesday 09 April 2024
Article 09.
Principaux enseignements du budget 2024
Introduction
Le budget pour l’année 2024 est estimé à 6.679,5 milliards. Les recettes sont passées de 84,431 milliards à 60,600 milliards. Les dépenses courantes devraient passer de 5 283 249 999 à 5 027 430 000. Certains aspects récurrents du budget doivent être salués en fanfare. Les jeunes entreprises seront exonérées d’impôts pendant un total de trois ans et le budget maintient des subventions généreuses et des programmes spécifiques sous l’égide du ministère des petites et moyennes entreprises ainsi que du ministère du commerce afin de s’assurer que le Cameroun se tourne vers l’exportation.
Cependant, les droits à l’exportation pour certains produits sont augmentés et les consommateurs continueront à ressentir les effets de l’inflation car les taxes sur la valeur ajoutée sur le riz, les pâtes et d’autres produits ménagers essentiels ont été maintenues. Parallèlement, le prix des importations de céréales et de produits à base d’avoine a été réduit pour soutenir les familles de la classe moyenne. D’aucuns pourraient juger cette mesure réductrice, mais il est important de soutenir les magasins et les supermarchés bien établis du point de vue de la consommation intérieure.
Action pour le climat et sensibilisation à l’environnement : Dans l’article 9, les droits d’exportation pour le bois non transformé sont de 75 % et de 65 % pour le bois des pays CFA. L’annexe du chapitre 3 présente plusieurs amendes pour les individus qui abusent de l’environnement, allant de 500 000 pour empêcher les contrôles à 30 millions pour les projets exécutés après un avertissement. Le fonds spécial pour les projets environnementaux est plafonné à 900 millions, tandis que le fonds pour le développement forestier est fixé à 3 milliards. Le fonds pour l’environnement et le développement durable est plafonné à 1,5 milliard (articles 39 à 43).
Conclusions
Le budget 2024 peut être applaudi pour l’effort qu’il fait en faveur de l’environnement et de la réduction de la pollution.Le budget, comme d’autres, a maintenu un engagement en faveur des PME, en stimulant le commerce et la compétitivité et en apportant un soutien au secteur agricole.Le budget du ministère du commerce et des PME a augmenté, tandis que celui du ministère de l’agriculture a diminué.Il est important que les futurs budgets fixent des objectifs quantitatifs afin que les ministères puissent voir leur budget augmenter ou diminuer en fonction des résultats, tandis que les ministres seront incités à innover pour devenir plus productifs.
Le budget devrait mettre davantage l’accent sur le libre-échange. Le budget a imposé des restrictions sur les importations et les droits ont augmenté pour certaines catégories telles que le riz et le poisson afin de soutenir la production nationale. Toutefois, l’augmentation de la production nationale dépend de la fixation d’objectifs quantitatifs et de l’assurance que les subventions sont accompagnées de demandes adressées aux entreprises pour qu’elles atteignent des quotas spécifiques.Cependant, les céréales et les produits laitiers sont encore trop peu nombreux dans les pays en développement.
Le gouvernement devra améliorer la gouvernance d’un seul coup. Par exemple, il n’existe pas de plateforme commune pour tous les employés du secteur public dans tous les ministères. Il est donc impossible de suivre les activités quotidiennes des administrateurs civils.Le gouvernement devrait commencer par fournir aux employés du secteur public des courriels officiels et des rapports d’avancement réguliers devraient être mis à la disposition de la société civile afin de développer une culture de contrôle et d’équilibre.
Article 10.
Voici Comment le budget 2024 supporte les entreprises?
Introduction
La loi de finances 2024 est volumineuse (plus de 6 700 milliards), complexe (120 pages – 580 articles) et comporte plusieurs mesures de soutien au secteur privé. Le budget élargi l’assiette fiscale augmente le montant imposable des personnes physiques gagnant jusqu’à 4 millions de FCFA, ce qui expose chaque travailleur à la nouvelle taxe à large assiettevas causer une baisse des salaires
Mesures de soutien aux entreprises : Exonérations fiscales pour les entreprises des secteurs de l’agriculture, de la santé et de la pêche
- L’article 5 stipule que tous les équipements destinés à la production d’eau potable, de biomasse, d’énergie solaire et éolienne; à l’élevage, à la pêche et au développement de la pisciculture sont exonérés des droits et taxes à l’importation pendant 24 mois jusqu’au 1er janvier 2024. Les équipements et appareils médicaux, y compris leurs accessoires, sont exonérés des droits et taxes de douane à l’importation pour une période de vingt-quatre (24) mois à compter du 1er janvier 2024. Lorsque les équipements et matériels sont destinés à la revente, l’importateur doit signer un accord avec l’administration des douanes, par lequel l’exonération totale est répercutée sur le client.
Analyse et recommandation pour 2025: Ces mesures permettront aux entreprises d’investir, créent ainsi des nouveaux emplois et encouragent davantage d’entreprises à formaliser leurs activités. Par exemple, il existe plusieurs pisciculteurs, mais ils n’utilisent pas toujours des matériaux industriels ou importés qui peuvent bénéficier de ces exonérations. À ce titre, la future loi de finances devrait ajouter un remboursement d’impôt unique chaque année de 15 % de l’achat de poisson ou d’intrants agricoles afin de les encourager à formaliser leurs activités.
Conclusion
La loi de finances 2024 apporte un certain soutien aux entreprises, mais une majorité de l’économie et de ses travailleurs sont employés dans le secteur informel. Le budget doit créer des incitations plus importantes pour formaliser les travailleurs du secteur informel et s’assurer qu’ils investissent progressivement dans l’économie pour créer une richesse vérifiable. La charge fiscale est modérément élevée pour les employés du secteur formel et un taux d’imposition supérieur à 30 % sera considéré comme punitif s’il est encore augmenté. Mme. Rhoda Akale, Chargé de opérations de SMT Hub basé à Buea note que la loi de finances comporte un certain nombre de mesures de soutien aux entreprises, mais le code des impôts est encore trop lourd et la déclaration est rendue difficile du fait de sa fragmentation et de sa décentralisation. Cet article appelle à une centralisation de l’enregistrement, de la déclaration et du paiement des impôts afin d’économiser de l’argent et du temps aux entreprises et d’encourager les acteurs du secteur informel à se déclarer.
Article 11.
Don’t Blame the IMF! Years of Failed Policies mean Prices Must Now Rise
Introduction
An unsustainable debt burden, corruption and inexistent levels of production have caused the government to withdraw fuel subsidies. In 2022, petrol subsidies on the products stood at about 1,000 Billion Francs CFA and in February 2023, the government still reduced the subsidies to 670 Billion Francs CFA representing a 33% subsidy reduction to increase the state budget to develop other sectors. As such, the price of a liter of Super has risen from 730 XAF (APPROXIMATELY $1.21) PER LITER TO 840 XAF (approximately $1.39 U.S) and gasoline increases from 720 XAF (approximately $1.19) per liter to 828 XAF (approximately $1.37).
This will increase the cost of transportation, reducing consumers’ ability to purchase other products while businesses may employ fewer staff to cope with higher prices or pass on the cost to consumers in the form of higher prices. The Cameroon Economic Policy Institute (CEPI) recommends that the government supports the most vulnerable in our society through direct cash transfers, lower value-added tax for some products and a higher minimum wage of XAF 70,000 to 80,000 for private sector employees.
“Fuel prices have risen due to years of mismanagement, corruption and a failure to invest in a refinery. The price of mismanagement and underinvestment are Higher prices”
Impact on the General Population
Transportation costs will rise leading to higher expenses for commuting to work, school, or other essential places. Over 400,000 own cars (CEPI, 2023) and over 7 million people travel in any given day. So higher transport costs will reduce spending on other goods and services. Household consumption contributes about 88% OF CAMEROON’S GDP, so higher fuel prices could see consumers spend less on entertainment to reduce the impact of higher fuel prices. The economy could grow at a slower pace, as a result of lower domestic demand, especially as the government is reducing its spending in 2024.
Don’t Blame the IMF for Higher Oil Prices
The fuel price increase and its ripple effects create economic uncertainty in the business landscape. Uncertainty often leads to cautious spending and investment decisions, potentially slowing economic growth and stifling business expansion plans. However, fuel price increases were expected and as we live through their impact, we should not misdiagnose the problem. The IMF isn’t the issue, but Cameroon’s inability to invest in an oil refinery 80 years after independence says more about our leaders and the people now subject to this price hike.
Article 12.
Politiques Transitoires: Quelles Politiques Pour les Pauvres
Introduction
Le Cameroun subit des pressions du FMI en raison de la subvention pour le carburant en 2022, qui a été considérablement plus élevée que prévu et reportée à 2023. Une partie importante de la subvention DEVRAIT ÉGALEMENT ÊTRE REPORTÉE DE 2023 À 2024. Les subventions vont être réduite, mais le gouvernement peut réduire les coûts pour les ménages. Le Cameroun n’est pas le premier pays du monde à enlever les subventions du Cameroun et nous ne seront pas les derniers. Voyons ce qu’il à entre fait en Asie et en Afrique pour combler les effets néfastes des réductions des subventions.
Dans plusieurs expériences de réforme, les pays ont choisi d’adopter des transferts en nature pour amortir les impacts directs et indirects de la hausse des prix. Il s’agit, par exemple, de mesures fiscales compensatoires pour les biens consommés intensivement par les pauvres (telles que l’abrogation ou la réduction des taxes sur la valeur ajoutée des aliments).
En résumé, le gouvernement devrait réduire les TVS ou taxes douanières sur les produits alimentaires consommés par les masses (Riz, blé, médicament) pour une période de 6 mois pour supporter les ménages.
Autres prestations en nature – Jordanie, Malaisie, Ghana et Indonésie
La Jordanie, après une réforme entamée en 2008, a mis en œuvre des exonérations fiscales pour 13 produits alimentaires de base destinés aux GROUPES À FAIBLE REVENU, tandis que le KENYA, EN MAI 2011, a supprimé les taxes sur le maïs et le blé (en plus d’éliminer toutes les taxes sur le kérosène). Parce que la réduction de la taxe sur la valeur ajoutée peut être une action politique controversée et politiquement sensible, difficile à limiter à une période spécifique, les mesures qui en dépendent peuvent être particulièrement problématiques. D’autres taxes, telles que les taxes à l’importation, peuvent être plus faciles à modifier. Au Cameroun, le gouvernement devrait réduire les taux d’importations pour des aliments jugés nécessaires pour les ménages pour un minimum de 3 mois par an.
EN MALAISIE, après d’importantes augmentations des prix de l’essence et du diesel en 2008, les taxes routières annuelles ont été réduites. Dans certains cas, en ciblant des éléments tels que l’alimentation, l’éducation de base et la santé. Les mesures du gouvernement ont été en mesure d’indemniser les pauvres tout en maintenant des incitations à réduire la consommation d’énergie. AU GHANA, l’augmentation du prix des carburants pour le transport s’est accompagnée de programmes visant à éliminer les frais de scolarité dans les écoles primaires et secondaires inférieures et d’un programme visant à améliorer les transports en commun. EN INDONÉSIE (2005 ET 2008), quatre programmes ciblés ont atténué l’impact de la hausse des prix de l’énergie.
Ces programmes, qui sont très différents les uns des autres en termes de bénéficiaires et de conception, fournissent du riz subventionné, des soins de santé gratuits, une aide en espèces aux étudiants pauvres, et un transfert monétaire conditionnel destiné aux ménages très pauvres avec des femmes enceintes ou des enfants d’âge scolaire. Au fil du temps, ces programmes sont devenus de plus en plus sophistiqués, grâce à un investissement important dans la création d’un registre unifié des bénéficiaires potentiels combiné à des tests de ressources proxy. En s’appuyant sur ces efforts, l’indemnisation a été versée dans le cadre d’un programme ciblé de transferts monétaires en 2013.
En ce qui concerne le ciblage, les mesures adoptées au Ghana étaient de nature universelle, même si elles étaient sans doute auto-ciblées, car les ménages riches ont tendance à dépendre de sources privées plutôt que publiques pour ces biens et services. En revanche, l’Indonésie a cherché en 2005 et 2008 à couvrir autant de groupes pauvres que possible en utilisant plusieurs programmes différents. Un élément important de l’expérience indonésienne est que les autorités ont pu réaffecter des ressources dans des secteurs plus efficaces tels que l’énergie et les infrastructures.
Transferts Monétaires
Dans la pratique, les transferts monétaires ont été plus progressifs que les autres programmes adoptés pour soutenir l’accès des pauvres aux services énergétiques (et plus généralement pour soutenir les moyens de subsistance des pauvres). 42 En outre, les transferts monétaires sont le moyen le plus efficace de compenser les ménages pour les effets directs et indirects de l’élimination des subventions.
Les transferts en espèces sont conceptuellement simples. Les ménages reçoivent de l’argent (ou plus souvent des dépôts bancaires, des chèques personnalisés ou des mandats postaux) qui peut être utilisé à n’importe quelle fin et ne se limite pas à l’achat d’énergie. Le montant est fixé à un niveau qui les compense au moins partiellement pour l’augmentation des prix et ses effets indirects, ou qui couvre leurs factures.
Les critères d’admissibilité au programme doivent être établis, car les préoccupations concernant les transferts monétaires ont tendance à se concentrer sur trois facteurs. Tout d’abord, étant donné qu’elles impliquent le traitement de grandes quantités d’espèces, les risques d’erreur, de fraude et de corruption doivent être pris au sérieux. Ces risques peuvent être réduits au minimum grâce à des mesures appropriées prises par tous les ordres de gouvernement autour de quatre blocs d’activités — prévention, détection, dissuasion et mesure. Deuxièmement, les mêmes critères d’admissibilité complexes peuvent entraîner des coûts d’administration élevés et des exigences complexes pour les demandeurs potentiels. Troisièmement, les erreurs de ciblage (inclusion ou exclusion) peuvent être importantes, que le ciblage direct ou par procuration soit utilisé.
La technologie moderne — l’informatisation, les guichets automatiques, l’argent mobile, les cartes à puce et les identificateurs biométriques – pourrait grandement simplifier le fardeau technique et administratif de l’administration de ces programmes. (qui impliquent un réseau de points de vente tels que des bureaux de protection sociale ou des organismes gouvernementaux locaux pour distribuer les transferts) et de se qualifier et de les recevoir (en fournissant une preuve d’identité, d’admissibilité et généralement de résidence). Un exemple intéressant de l’utilisation de la technique moderne est le projet pilote de 2014 en Inde d’un système de transfert en espèces pour fournir des subventions au GPL. Le système a exploité l’identification biométrique unique (aadhaar) qui avait été introduite dans le cadre de la réforme de l’aide sociale a réduit les fraudes et maintenu l’assistance sociale a le plus grande nombre des personnes.
En résumé, le gouvernement devrait réduire les TVS ou taxes douanières sur les produits alimentaires consommés par les masses (Riz, blé, médicament) pour une période de 6 mois pour supporter les ménages. L’élargissement de la sécurité sociale serait également indispensable pour réduire l’impact des baisses des subventions. Nous ne sommes pas le premier pays à le faire, et nous avons beaucoup à apprendre de nos partenaires ailleurs.
