Treasury DG unveils innovations to boost cash flow, growth.

Moh Sylvester catalogued and presented as guiding principles, the innovations on Monday January 29, 2024, in Yaounde. This was during the annual conference of staff of the Ministry of Finance. 

The ceremony took place under the tutelage of the Minister of Finance, Louis Paul Motaze. The event that holds annually, sets the pace for resource mobilisation and efficiency in financial management of State resources.

It took place under the theme: “Controlling Budgetary Expenditure in 2024 as Challenge to the Viability of Public Finances”. 

In an inspiring and enlightening presentation at the gathering, the Treasury DG, detailed a path to streamlining expenditure and addressing recurrent issues that result in tension at the public cashbox.

Handling outstanding payments, reducing pressure on treasury

A key issue Moh addressed was what will guide the action of finance officials to reduce tension at the treasury. To do this, he called for the “integration of outstanding payments of the previous year into the budget”.

Acknowledging that “it can be very heavy”, he added that, “we are talking of 600 to 700 billion FCFA from the previous year, 2023”. 

The Treasury DG told reporters that “all these outstanding payments are not incorporated into the budget of 2024. It is the revenue of 2024 that will be used to pay them. That is why it creates tension already right from the beginning”. 

He disclosed that “the revenue of the first quarter will be used to pay for the previous year”.

Engaging commitments to rhythm of resource mobilisation

To avoid difficult situations, Moh said, engagements must be made in tandem with the “rhythm of the mobilisation of revenue”.

He explained that “when they say the budget is 6,740 billion FCFA, it is not like money that has been mobilised and is just ready to be used. It has to be mobilised progressively”.

The far-sighted Treasury DG counseled that this year, “commitments should also be progressive. If in the first quarter, we know that we can generate 1,500 FCFA, then commitments should not go far from the 1,500 FCFA”.

Balancing correspondents

To ensure continuity, he detailed that the Treasury Department will work to ensure “the balancing of correspondents”. 

He said there are “structures that have accounts in the treasury like collectivities and public establishments and ministries. Sometimes, some of them benefit subventions and they don’t use the subventions totally”. 

Moh added that: “As of 31 of December, they still had balances and these balances are carried forward to the following year and we continue paying; and we are paying now with the budget of 2024, so it causes a lot of tension”.

Reducing payment deadlines

Another area which Moh said needs improvement is that of reducing deadlines for the treatment of files. This, he said, coupled with the innovations he outlined, are needed to advance operations.

He sounded confident that, “if we do all these things, it will reduce payment deadlines to about 72 hours, 48 hours”. This, he underscored, “will come with a lot of advantages”.

Easing treasury bills purchase

Situating the positive multiplier effect on other sectors, Moh said, “if you bring payment deadlines to 48 hours and 72 hours, the banks will not have any constraints in terms of buying treasury bonds”.

Banks, he explained, will not face liquidity issues in buying treasury bonds. The 85 percent capital banks need to buy such bonds will always be readily available if cash flow is efficient.

“If a bank wants to buy treasury bonds, that bank has to have 85 percent of its own capital. If you are buying for 100, 000, you have to get 85,000. Whereas, if there is no accumulation of arrears, waiting will be at zero and this will be favourable for the purchase of treasury bonds,” the Treasury DG remarked.

Reducing search for finances

When money gets to the treasury and service providers are paid on time, Moh indicated that, it will result in a swift cycle of cash flow. This, he noted, will also limit the search for finances.

He indicated that, “when money gets to the treasury, it is used to pay suppliers, the money comes back to the treasury and the search for finances will even reduce”.

Motaze orders innovations implementation

As staff rose from the Yaounde meeting, Moh said, his boss, the Minister of Finance, Louis Paul Motaze, “has instructed that we work with the Budget Department to see how some of these innovations can be implemented”.

Citing outstanding payments, he said it looks difficult to impute the total amount into the current budget but averred that it is possible to address such by looking for long-term funding.

The 2023 Finance Law, he said, “authorised us to borrow 200 billion FCFA to finance outstanding payments and that was part of the solutions” last year.

Long-term loans, he maintained, come with the advantage of relieving “the pressure and then facilitate the execution of the current budget. If not, you will have things that are not in the budget that will come to disturb the execution of the budget”.

CDEC consulting stakeholders for stability of financial sector

At the level of the Deposit and Consignment Fund, CDEC, where Moh is the Chairperson of the Board of Directors, he said, they are working with partners to avoid destabilising the financial sector.

This, he said, is required as the institution gains momentum to deliver on its mission.

Inferring from a presentation of the Director General, DG of CDEC, Richard Evina Obam, at the Yaounde meeting, Moh underscored the place of consultation.

With legal instruments in place that give CDEC six months to recover such funds, he said, “we are doing it in a consensual manner, with banks, with notaries, with the judiciary and so on”.

He was firm that they are doing so “progressively but within the limit of the six months. He clarified that one of the concessions in order not to destabilise banks has been to open accounts in all the banks where money has to be transferred to CDEC's accounts”.

Merited recognition from Biya

The humble, yet competent and results-oriented Treasury DG, was during the same confab of MINFI officials, recipient of a presidential distinction. The Head of State raised him to the rank of Commander of the National Order of Valour.

The Minister of Finance, Louis Paul Motaze, decorated the celebrated Treasury DG, on behalf of the Head of State. Moh’s innovative reforms and fast-pace adaptation of the nation’s treasury to global shifts in the financial markets have been resounding.

In the last couple of years, Moh has, under the supervision of Minister Motaze, stood the test of time in managing scarce State resources. 

These have been heralded in the constant payment of civil servants’ salaries and honoring of both internal and external debts, despite the sociopolitical crisis in the North West and South West Regions.

His handling of the treasury also survived the disruptive effects of Boko Haram terrorist incursions in the Far North Region that slowed revenue collection.

When it comes to debt servicing but locally and internationally, Moh has been credited with sustaining Cameroon’s credibility on the financial markets. 

The recognition from the Head of State to the modest Treasury DG, many have said, is merited, given Moh’s unending exploits.