Culled from Daily Update99
While Congo Brazzaville recently announced its inability to meet its financial commitments, joining the growing list of African countries in default or on the brink of bankruptcy, Cameroon continues to stand out with remarkable financial stability. This situation highlights the daily work of the Cameroonian Minister of Finance, Louis Paul Motaze , recently crowned the best Finance Minister of CEMAC. Yet, his achievements in managing the State’s finances often go unnoticed by those who benefit the most: the Cameroonians.
In a gloomy global economic context, Louis Paul Motaze manages to accomplish financial feats that may seem trivial but are vital for the proper functioning of the country. Since taking office, the minister has ensured that civil servants’ salaries are paid regularly despite the severe crisis, while also progressively clearing accumulated salary debts. A notable effort has been made for teachers, whose debt should be fully settled by the end of 2024, with 85% of arrears already paid. Meanwhile, Cameroon continues to strictly honor its commitments to foreign creditors, thus maintaining its financial credibility on the international stage. This timely payment of external debt serves as a bulwark against the specter of default, which currently looms over several African states.
The minister has also not neglected domestic debt, whose settlement helps revitalize the local economy and strengthen the confidence of economic operators. Furthermore, sovereignty expenditures, essential for the proper functioning of the State, have been covered smoothly despite increasing budgetary constraints. In terms of public finance management, Louis Paul Motaze has undertaken a vast project to clean up the payroll file, stopping more than 50 billion FCFA in annual fraud. Besides the physical counting of State personnel and the audit and cleanup of sometimes fictitious leases paid by the State, this rigorous cleanup extended to military and police pensions, previously untouchable sectors, with the detection and removal of 13,000 fake acts, further cleaning up public finances.
The recent completion of a private placement of 335 billion FCFA on the London financial market confirms Cameroon’s credibility with international investors. This successfully conducted operation demonstrates renewed confidence from funders in the country’s ability to meet its financial commitments. This success is the result of rigorous and transparent public finance management, confirmed by the PEFA (Public Expenditure and Financial Accountability) diagnosis, which praised the good management of Cameroonian public finances. The report highlights the Ministry of Finance’s efforts to enhance budget transparency and improve public expenditure management.
This recognition adds to the satisfaction expressed by the International Monetary Fund (IMF) regarding the correct conduct of the ongoing economic and financial program. The reforms implemented, particularly within the framework of this program, have helped consolidate the country’s macroeconomic stability despite an unfavorable international context. Under the leadership of Louis Paul Motaze, the Ministry of Finance has managed to stay the course by strengthening financial governance and ensuring the payment of both domestic and external debts.
At the same time, the Minister of Finance has led an unprecedented modernization of the tax and customs administrations. The digitization process initiated now allows for more efficient collection of public revenues while improving transparency. This modernization dynamic has also affected the public treasury, whose payment management has been deeply reorganized for greater efficiency. Transparency is now at the heart of the preparation and management of the State budget, with the systematic publication of all budget documents on the Ministry of Finance’s website.
Beyond internal management, Louis Paul Motaze, in accordance with President Paul Biya’s instructions, has focused on supporting strategic sectors of the economy. Public entities receive constant support, as does the private sector, which sees these measures as a strong signal of the government’s willingness to support it during this period of economic difficulties. The banking and financial sector remains stable thanks to prudent regulation, thus ensuring investor confidence. The minister has also ensured that essential goods are subsidized to mitigate the effects of inflation on Cameroonian households.
These impressive results are achieved in an international context marked by major challenges. Many African countries are facing liquidity crises, with some even in default. The post-Covid-19 global economic recession has left deep scars, while the oil shock caused by the war in Ukraine continues to exacerbate budgetary tensions and fuel inflation. Public development aid is declining, further complicating the situation of developing economies. Domestically, Cameroon must simultaneously manage the war in NOSO (North-West and South-West) and the persistent threat of Boko Haram in the North, conflicts that heavily weigh on public finances as these three regions not only contribute almost nothing to the national effort in terms of taxes but also cost more in security, socio-economic, and reconstruction expenditures. Added to this is the decline in national oil production, once the pillar of the economy, and the structural deficit of the trade balance, exacerbated by imports always exceeding exports.
Public finance stability
Despite these headwinds, Louis Paul Motaze and his team at the Ministry of Finance manage to stay the course set by President Paul Biya : the stability of public finances, support for key sectors of the economy, and courageous reforms testify to rigorous management and unwavering commitment. The efforts made by the Minister of Finance to maintain budgetary balance and support the national economy are all the more remarkable as they unfold in a hostile international context. Whether in debt repayment, public finance cleanup, or support for strategic sectors, Louis Paul Motaze continues to prove that Cameroon’s resilience is not the result of chance but of wise and proactive State finance management..
Nkengni Nembot Didérot
Economist
