During the first half of the 2021 financial year, the State budget was implemented in an international context marked by: (i) the continuation of the pandemic and the acceleration of research on the anti-COVID-19 vaccine; (ii) a contraction of the world economy recorded in 2020, with a growth rate estimated at -3.3% against 3.7% in 2019, mainly due to the COVID-19 pandemic; (iii) a rebound in the world economy expected in 2021, with a forecast growth rate of 6%, due in particular to economic support measures and the hope raised by the COVID-19 vaccines in most of the world’s countries; (iv) the failure of negotiations between the European Union and Great Britain to conclude a post-Brexit trade agreement.
At the national level, the budget implementation context is marked by (i) a less marked slowdown in economic activity than expected during the year 2020 affected by the COVID-19 pandemic, with a growth rate estimated at 0.5% against -2.6% forecast and 3.7% in 2019 ; (ii) a rebound in growth to 3.4% expected in 2021, in connection with the recovery in global demand for products exported by Cameroon, following the reopening of the borders of partner countries, and the dynamism of domestic demand; (iii) the adoption of an amended Finance law, following the rise in world oil prices, which has led to a significant increase in budget revenue (iv) the raising by ordinance of the 2021 debt ceiling, in order to increase the issuance of public securities; (v) the issuance of a new Eurobond of 450 billion at 5.9% interest rate, to buy back part of the Eurobond issued in 2015 at 9.5%; (vi) the conclusion of a new 2021-2024 Economic and Financial Programme with the IMF (vii) the 6th edition of the African Nations Championship held from 16 January to 7 February 2021; (viii) the persistence of security problems in the Far North, North West and South West regions; (ix) the operationalization of regional councils.
The prices of the main export products in the first half of 2021 were up year-on-year, with the exception of raw cocoa. Indeed, the average prices of palm oil and aluminium rose by 70.4% and 41.1% respectively to USD 993.9 and USD 2 245.3 per ton. Rubber and cotton prices rose by 31.5% and 30.5% respectively to 358.8 US cents/kg and 91.3 US cents/pound. Arabica and Robusta coffee prices rose by 26.4% and 14.5% to 136.5 US cents and 76.2 US cents per pound respectively. The average price of oil rose by 61.8% to USD 64.6 per barrel. In contrast, the price of raw cocoa fell by 1.7% to USD 2 477.2 per ton.
This context influenced the execution of the State budget, in terms of mobilization of budgetary resources and execution of budgetary expenditure. In terms of performance analysis, the resources mobilized are compared with the objectives of the six-month period, while the expenditure implemented, which is subject to budgetary regulation, is compared with the forecasts of the amended finance law.
I- BUDGETARY REVENUES
The total budgetary resources provided for in the State budget were revised upwards by Ordinance No. 2021/003 of 7 June 2021 amending and supplementing certain provisions of Law No. 2020/018 of 17 December 2020 to lay down the finance law of the Republic of Cameroon for the year 2021. These resources thus increase by 615.2 billion (+12.6%), bringing the State budget to 5 435.2 billion against 4 820 billion in the initial finance law.
At the end of the first half of 2021, resources mobilized amounted to 2 087.1 billion. They decreased by 247.1 billion (-10.6%) compared to the first half of 2020. This decrease is mainly attributable to loans and grants. Compared to the target of 2 468.8 billion for the first half of the year, they were down by 381.7 billion, i.e. an achievement rate of 84.5%. This under-performance is attributable to both domestic revenue and borrowing and grants, which showed implementation rates of 94.9% and 53.9% respectively.
Internal budgetary revenues were collected to the tune of 1 660.4 billion, up by 158.1 billion (+10.5%) compared to the same period of the previous fiscal year when they stood at 1 502.3 billion. This increase can be observed in both oil and non-oil revenue. The implementation rate of these revenues is 94.9% compared to the half-yearly target of 1 749.1 billion.
Oil revenues amounted to 202.2 billion at the end of June 2021, up by 5.2 billion (+2.6%) compared to the end of June 2020, mainly due to the 61.8% annual increase in world oil prices. They include 181.3 billion in NHC oil royalties and 20.9 billion in oil company tax. Compared to the half-yearly forecast of 268 billion, their implementation rate is 75.4%.
Non-oil revenue rose from 1 305.3 billion at the end of June 2020 to 1 458.2 billion at the end of June 2021, an increase of 152.9 billion (+11.7%) between the two periods. Compared to the half-yearly forecast of 1 481.1 billion, they show a realization rate of 98.5%, which is the result of the combined effect of the good performance of domestic taxes and duties and the underperformance recorded in customs and non-tax revenues. The evolution and implementation of the main components of non-oil revenue are given below.
Tax and duties revenue collected in the first half of 2021 amounted to 994.3 billion against 938.2 billion in the first half of 2020, i.e. an increase of 56.1 billion (+6%) year-on-year. This increase can be observed in all the main headings, except for IRPP. Indeed, year-on-year, VAT increased by 12 billion (+4.2%), tax on non-oil companies by 16 billion (+7.1%), excise duties by 21.7 billion (+18.1%), registration and stamp duties by 7.8 billion (+16.2%), and TSPP by 5 billion (+7.3%). On the other hand, PIT fell by 9 billion (-5.6%). Compared to the 991.6 billion target for the first half of the year, tax revenues exceeded the target by 2.7 billion, i.e. a 100.3% implementation rate. This performance was driven by excise duties, which had a realization rate of 123.2%, the STPP (110.8%), and the tax on non-oil companies (107.9%). The collection of domestic taxes and duties benefits from the reforms linked to the digitalization of procedures and the reorganization of tax services undertaken in recent years, which have improved the monitoring of taxpayers and facilitated the discharge of tax obligations.
Customs revenue amounted to 388 billion at the end of June 2021 compared with 300.7 billion at the end of June 2020, an increase of 87.4 billion (+29.1%) year-on-year. This increase can be observed in the main items as follows: import customs duties (+37.1 billion), import VAT (+41.1 billion), and import excise duties (+9 billion). It is explained in particular by: (i) the revival of activity post COVID; (ii) the gradual resumption of imports; (iii) the partial settlement of the debt of marketers and the State; and (iv) the new measures of the Finance Law. Compared with the 396.1 billion forecast for the first half of 2021, this revenue is down by 8 billion, or a implementation rate of 98%.
Non-tax revenues increased by 9.4 billion (+14.2%) on an annual basis and stood at 75.8 billion at the end of June 2021. Compared to the half-yearly forecast of 93.5 billion, they are down by 17.7 billion, i.e. a implementation rate of 81.1%. These revenues are negatively impacted by the low level of information on the revenues allocated to education and health.
Loans and grants disbursed during the first half of 2021 amounted to 426.7 billion against 831.8 billion in the first half of 2020, a drop of 405.1 billion (-48.7%) between the two periods. This drop is mainly due to the absence of loans from the IMF and budgetary support, unlike at the end of June 2020 when they were 181.6 billion and 52.7 billion respectively. Loans and grants had an implementation rate of 59.3% compared to the half-yearly target of 719.7 billion.
Table 1: Mobilization of budgetary resources by the end of June 2021
(In billions of CFA francs, unless otherwise specified)
| HEADINGS | 2021 | 2021 | Jan-June 21 | Jan-June 21 | Jan-June 20 | Implementation rate | Variation | ||
| FL | R.F.L | Forecasts | Implementation | implementation | Gap | (c/d) | (c/d) | ||
| (a) | (b) | (c ) | (d ) | (e)=(c-b) | (c/b) (%) | (abs) | (%) | ||
| A- INTERNAL REVENUES | 3349,7 | 3466,1 | 1749,1 | 1660,4 | 1502,3 | -88,7 | 94,9 | 158,1 | 10,5 |
| I- Oil revenues | 393,2 | 536,0 | 268,0 | 202,2 | 197,1 | -65,8 | 75,4 | 5,2 | 2,6 |
| 1-NHC royalty | 336,5 | 479,3 | 239,7 | 181,3 | 152,8 | -58,4 | 75,7 | 28,5 | 18,7 |
| 2- oil CT | 56,7 | 56,7 | 28,4 | 20,9 | 44,3 | -7,5 | 73,7 | -23,4 | -52,8 |
| II- Non-oil revenues | 2956,5 | 2930,1 | 1481,1 | 1458,2 | 1305,3 | -22,9 | 98,5 | 152,9 | 11,7 |
| 1- Fiscal revenues | 2743,1 | 2743,1 | 1387,6 | 1382,4 | 1238,9 | -5,3 | 99,6 | 143,5 | 11,6 |
| a- Revenue from taxes and duties | 1938,4 | 1938,4 | 991,6 | 994,3 | 938,2 | 2,7 | 100,3 | 56,1 | 6,0 |
| of which – PIT | 313,0 | 313,0 | 159,0 | 152,8 | 161,8 | -6,2 | 96,1 | -9,0 | -5,6 |
| – VAT | 717,7 | 717,7 | 330,5 | 293,8 | 281,8 | -36,8 | 88,9 | 12,0 | 4,2 |
| – Non-oil CT | 340,0 | 340,0 | 222,9 | 240,5 | 224,5 | 17,6 | 107,9 | 16,0 | 7,1 |
| – Excise duties | 225,0 | 225,0 | 114,7 | 141,3 | 119,6 | 26,6 | 123,2 | 21,7 | 18,1 |
| – Registration and stamp duties | 115,5 | 115,5 | 55,5 | 56,1 | 48,2 | 0,5 | 100,9 | 7,8 | 16,2 |
| – STPP | 132,0 | 132,0 | 66,3 | 73,4 | 68,4 | 7,1 | 110,8 | 5,0 | 7,3 |
| b- Customs revenue | 804,7 | 804,7 | 396,1 | 388,0 | 300,7 | -8,0 | 98,0 | 87,4 | 29,1 |
| of which – Import customs duty | 344,6 | 344,6 | 169,6 | 164,0 | 126,9 | -5,6 | 96,7 | 37,1 | 29,2 |
| – Import VAT | 357,9 | 357,9 | 176,2 | 175,4 | 134,2 | -0,8 | 99,5 | 41,1 | 30,7 |
| – Import excise duties. | 50,4 | 50,4 | 24,8 | 26,2 | 17,2 | 1,4 | 105,5 | 9,0 | 52,2 |
| – Exit duty | 44,8 | 44,8 | 22,0 | 19,4 | 17,5 | -2,6 | 88,3 | 1,9 | 11,0 |
| 2- Non-tax revenues | 213,4 | 187,0 | 93,5 | 75,8 | 66,4 | -17,7 | 81,1 | 9,4 | 14,2 |
| 3- Loan refunds | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | 0,0 | – | 0,0 | – |
| B- LOANS AND GRANTS | 1470,3 | 1969,1 | 719,7 | 426,7 | 831,8 | -293,0 | 59,3 | -405,1 | -48,7 |
| – Project loans | 703,4 | 703,4 | 351,7 | 196,7 | 212,7 | -155,0 | 55,9 | -16,0 | -7,5 |
| – Grants | 106,9 | 64,7 | 32,4 | 19,4 | 13,8 | -12,9 | 60,1 | 5,6 | 40,9 |
| – IMF loans | 0,0 | 85,0 | 42,5 | 0,0 | 181,6 | -42,5 | 0,0 | -181,6 | -100,0 |
| – Budget support | 260,0 | 185,0 | 52,6 | 0,0 | 52,7 | -52,6 | 0,0 | -52,7 | -100,0 |
| – Government securities issuance (net) | 350,0 | 431,0 | 215,5 | 204,2 | 238,8 | -11,3 | 94,8 | -34,6 | -14,5 |
| – Bank loans | 50,0 | 50,0 | 25,0 | 6,3 | 132,2 | -18,7 | 25,2 | -125,9 | -95,2 |
| – Eurobonds | 0,0 | 450,0 | 0,0 | 0,0 | 0,0 | 0,0 | – | 0,0 | – |
| TOTAL BUDGETARY REVENUE | 4820,0 | 5435,2 | 2468,8 | 2087,1 | 2334,1 | -381,7 | 84,5 | -247,1 | -10,6 |
II- BUDGETARY EXPENDITURE
Expenditure planned for the 2021 budget has also increased by 615.2 billion (+12.6%) in the amended finance law, through the balanced budget. At the end of June 2021, total budgetary expenditure amounted to 2 374.5 billion against 2 417.6 billion at the end of June 2020, i.e. a drop of 96.7 billion (-3.9%) between the two periods. This drop can be observed in current expenditure and public debt servicing. They present an implementation rate of 43.7% compared to the 5 435.2 billion provided for in the amended finance law.
Current expenditure authorized stood at 1 092.3 billion in the first half of 2021, a 43.8% implementation rate compared to the rectifying finance law. Year-on-year, it decreased by 79.3 billion (-6.8%), due in particular to the drop in pressure from health expenditure relating to the COVID-19 pandemic. The evolution and achievements of the main headings of this expenditure are given below.
Personnel expenditure increased by 1% to 517.9 billion in the first half of 2021, compared with 512.8 billion in the same period of the 2020 fiscal year. At the halfway point, it was implemented at 48.4% compared to the annual forecast of 1 069.8 billion.
Expenditure on goods and services fell by 35 billion (-9.5%) year-on-year and stood at 331.9 billion at the end of June 2021. The implementation rate of this expenditure is 38.8% compared to the 856.1 billion forecast in the amended finance law.
Expenditure on transfers and pensions amounted to 242.5 billion at the end of the first half of 2021, down by 49.4 billion (-16.9%) compared to the same period of the previous fiscal year. Compared to the 568.8 billion planned for the year, they recorded an implementation rate of 42.6%.
Investment expenditure amounted to 454.2 billion at the end of June 2021 against 423.3 billion at the end of June 2020, i.e. an increase of 30.9 billion (+7.3%) between the two periods. Compared to the annual forecast of 1 449.8 billion, their implementation rate is 31.3%. The evolution and achievements of the various headings of this expenditure are presented below.
Investment expenditure from own resources amounted to 220.1 billion at the end of June 2021, thus increasing by 36.2 billion (+19.7%) in annual terms. Compared to the forecast for the year, they show an implementation rate of 30.5%.
Investment expenditure on external financing stood at 216.2 billion at the end of June 2021, down by 7.1 billion at an annual rate (-3.2%). Compared to the 693.8 billion of the amended finance law, their execution rate is 31.2%.
Restructuring expenditure amounted to 17.9 billion at the end of June 2021 against 16.1 billion at the same period of the 2020 fiscal year. Their implementation rate is 51.1% compared to the 35 billion annual forecast.
3- Public debt service
Public debt service stood at 603.1 billion in the first half of 2021, compared with 748.5 billion in the first half of 2020, a year-on-year decrease of 145.4 billion (-19.4%). This decrease is observed in the two main public debt categories. Compared to the 1 490.7 billion forecast for the year, the implementation rate of public debt service is 40.5%.
The effective service of the external debt stood at 151.6 billion at the end of June 2021 against 201.5 billion at the end of June 2020, i.e. a decrease of 49.9 billion (-24.8%). It shows an implementation rate of 21.1%.
Payments for domestic debt fell by 95.5 billion (-17.5%), from 547 billion at end-June 2020 to 451.5 billion at end-June 2021. Compared to the 770.7 billion planned for the year, the implementation rate of these payments.
III- BASIC BUDGET BALANCES
At the end of the first half of the 2021 financial year, reflecting the revenue and grants received and the expenditure incurred, the budget deficit (ordinance basis) is 200.5 billion. The primary balance (ordinance basis) is -130.4 billion, and the non-oil primary balance is -332.6 billion./-
Table 2: Budgetary expenditure implementation as at end of June 2021
(In billions of CFA francs, unless otherwise specified)
| HEADINGS | L.F. | L.F.R | Jan-June 21 | Jan-June 20 | Implementation rate | Variation | ||
| 2021 | 2021 | implementation | implementation | Gap | (c/b) | (c/b) | ||
| (a) | (b) | (c) | (d)=(b-a) | (b/a) (%) | (abs) | (%) | ||
| I- Current expenditure | 2425,1 | 2494,7 | 1092,3 | 1171,6 | -1402,4 | 43,8 | -79,3 | -6,8 |
| Personnel expenditure | 1069,8 | 1069,8 | 517,9 | 512,8 | -551,9 | 48,4 | 5,1 | 1,0 |
| Expenditure on Goods & Services | 793,7 | 856,1 | 331,9 | 366,9 | -524,2 | 38,8 | -35,0 | -9,5 |
| Transfers and pensions | 561,6 | 568,8 | 242,5 | 291,9 | -326,3 | 42,6 | -49,4 | -16,9 |
| II- Investment expenditure | 1409,8 | 1449,8 | 454,2 | 423,3 | -995,6 | 31,3 | 30,9 | 7,3 |
| From external funding | 733,8 | 693,8 | 216,2 | 223,3 | -477,6 | 31,2 | -7,1 | -3,2 |
| From own resources. | 641,0 | 721,0 | 220,1 | 183,9 | -500,9 | 30,5 | 36,2 | 19,7 |
| Restructuring expenditure | 35,0 | 35,0 | 17,9 | 16,1 | -17,1 | 51,1 | 1,8 | 11,2 |
| III- Miscellaneous expenditure to be regularised | 0,0 | 0,0 | 199,1 | 85,9 | 199,1 | – | 113,2 | 131,7 |
| IV- On-lending | 0,0 | 0,0 | 25,8 | 41,8 | 25,8 | – | -16,0 | -38,4 |
| V- Public debt service | 985,1 | 1490,7 | 603,1 | 748,5 | -887,6 | 40,5 | -145,4 | -19,4 |
| External debt | 491,0 | 720,0 | 151,6 | 201,5 | -568,4 | 21,1 | -49,9 | -24,8 |
| Domestic debt | 494,1 | 770,7 | 451,5 | 547,0 | -319,2 | 58,6 | -95,5 | -17,5 |
| of which – Amortization of principal | 354,8 | 536,0 | 105,4 | 134,0 | -430,6 | 19,7 | -28,6 | -21,4 |
| – Repayment of VAT credits | 72,0 | 72,0 | 39,0 | 62,0 | -33,0 | 54,2 | -23,0 | -37,1 |
| – Domestic arrears and instances | 97,5 | 97,5 | 287,4 | 282,7 | 189,9 | 294,8 | 241,7 | 529,3 |
| TOTAL BUDGETARY EXPENDITURE | 4820,0 | 5435,2 | 2374,5 | 2471,1 | -3060,7 | 43,7 | -96,7 | -3,9 |
