Sunday, December 22, 2019

European Union donation: Cameroon faces 55 conditions

We have known for a month. Cameroon should conclude a second program with the International Monetary Fund (IMF) after the one that ends in June 2020. The European Union (EU), which considers "judicious" that the country continue its "collaboration" fruitful? ”with the IMF, has just pledged to support it in this direction through a donation of 50 million euros, or nearly 33 billion FCFA.

A small part of this money (2 million euros, or over 1.3 billion FCFA) is intended for "? Additional measures?". The rest (48 million euros, or 31.44 billion FCFA) must be transferred to the Treasury to help finance the budget. This is the reason why this funding is called budget support. 

But the disbursement of these 31.44 billion FCFA is subject to the implementation of a set of reforms agreed between Yaoundé and Brussels. They are contained in the addendum to the Sector Reform Contract (CRS), signed on December 16, 2019, by the Minister of the Economy, Planning and Regional Development (Minepat), national authorizing officer of the European Fund for development (Fed) where this money comes from, Alamine Ousmane Mey, and the head of the EU delegation to Cameroon, Hans-Peter Schadek. This endorsement covers a period of two years (2020-2021). 


According to this document, to benefit from the entire European donation, Cameroon will have to fulfill, in all, 55 conditions. They are divided into two categories: 23 general conditions and 32 targets (public policy objectives in the rural sector), grouped into eight indicators. 

Funding is divided into two tranches: fixed and variable (see table below). Satisfaction of the general conditions gives rise to the release of fixed tranches and is a prerequisite for the transfer of variable tranches. These are also subject to the achievement of the 32 public policy objectives in the rural sector.

Concretely, in terms of general conditions, Cameroon must make changes in the implementation of the Rural Sector Development Strategy and the National Agricultural Investment Program (SDSR / PNIA) and in terms of economic stability (reduction of deficits current and budgetary, improvement of the business climate, increase in the rate of fiscal pressure), management of public finances and budgetary transparency (publication of budgetary information, strengthening of the independence of the Chamber of Accounts, continued membership in the EITI, gender-sensitive budgeting, etc.). 

For specific conditions, it is a question of achieving precise objectives in several matters. It will be a question of supporting the implementation of the national plant seed policy (eg target: 70% of cocoa and corn seed companies must receive three visits from Minader inspectors in 2020), animal health and public health veterinarian (e.g. cleaning up the veterinary drug market). 

It is also planned to open up the agro-pastoral production areas (eg the Mintp must sign a decree numbering and inventorying municipal roads in 100 municipalities); improve the level of concertation and inclusiveness in the development of value chains (e.g. adopting a structuring plan for the cocoa, cotton, oil palm and aquaculture sectors), the quality of public expenditure management in the rural sector (e.g. 70% of projects and public establishments in the Minader must send their 2019 operational and financial reports no later than March 20, 2020) and mutual accountability of Sodecoton (e.g. payment in 2020 of the VAT credit , at the end of 2019, duly approved by the different parties). 

It is also expected to increase the transparency and mobilization of the taxes allocated to the cocoa (e.g. reforming the seed fund) and timber (e.g. developing a database integrating the information available for 2018 and 2019). 


The implementation of the CRS is evaluated in August of each year. Depending on the conditions satisfied, transfers are made in December. During the first budget support, amounting to 100 million euros (65.5 billion FCFA), Cameroon lost one million euros (655 million FCFA) for not having achieved, in time, the manual of procedures for the granting of agricultural inputs. 

According to the parties, the risk of losing funds is higher for this second budget support. For Alamine Ousmane Mey, "? We will need more active involvement of all the players concerned to reach, within the allotted time, the targets of the eight indicators 2020 and 2021 linked to the variable tranches of this amendment?". 

In order to anticipate blockages, a workshop was held from December 9 to 12 in Ebolowa, the regional capital of the South. "It was intended to deepen the common understanding of the actions to be implemented by the various stakeholders?", Informs the Support Unit for the National Authorizing Officer of the Fed, a structure which assists the Cameroonian authorities in implementing work of cooperation with the European Union. 

At the end of this workshop, it appeared in particular that activities linked to the achievement of certain indicators had not been included in the 2020 budget. They therefore run the risk of not being carried out. To make up for the shortfall, the participants suggested that Minepat use budget chapters 94 and 95, which are often used to manage unforeseen events. 

This question will undoubtedly be at the center of the round table of stakeholders announced for the beginning of 2020. Hosted by the ministers involved in the implementation of the CRS, one of the objectives of this meeting is indeed to guarantee a optimal implementation of this budget support.