Gov’t to increase 2024 State Budget by over 500 billion FCFA.

The President of the Republic, Paul Biya, on June 20, signed an ordinance, through which he is asking Parliament, presently in session to increase the current budget by 533 billion FCFA. A preponderant amount of the addition expected to come from foreign loans.

In specific terms, the ordinance revising the 2024 state budget, shows an increase of 8%; which means the budget will be raised from 6,679.5 billion FCFA to 7,212.5 billion FCFA. 

Observers say requesting approval from Parliament is a formality, given that the ruling CPDM party has a crushing majority that will enable it to easily push through the budget adjustment.

Meanwhile, to raise the funds needed to support the increase, reports say the government plans to accelerate borrowing. 

The revised budget proposes an additional 488 billion FCFA in “loans and other financing,” which makes up 91.5% of the total budget increase. 

Consequently, the total borrowing is expected to rise from 1,489.4 billion FCFA to 1,977.4 billion FCFA, with most of the new debts expected to come from international and bilateral lenders.

The ordinance calls for a reduction of 95 billion FCFA in public securities usually issued domestically. 

It also plans for an additional 240 billion FCFA in programme loans from multilateral lenders, increasing loans in this sector from 125.9 billion FCFA to 365.9 billion FCFA.

Internally generated revenue

President Biya highlighted in his ordinance that government expects a slight increase in internally generated revenue before the financial year runs out in December.

Also, the government plans to secure 467 billion FCFA from private foreign financiers, a source it had not initially included in the 2024 State Budget. 

In addition to the planned borrowing, government estimates the slight increase in domestic revenue to be an additional 533 billion FCFA. 

Total revenue is projected to rise by 45 billion FCFA, from 5,190.1 billion FCFA to 5,235.1 billion FCFA. This increase includes an expected 35 billion FCFA rise in tax revenue, reaching 4,203 billion FCFA from the previously projected 4,168.1 billion FCFA.

Also, the government aims to boost external trade, forecasting an additional 14 billion FCFA from “taxes on external trade and international transactions” above the initial 515.3 billion FCFA, and 13.7 billion FCFA more from "other tax revenues”. 

“Domestic taxes on goods and services” are expected to increase by 2.6 billion FCFA from the initially projected 2, 204.4 billion FCFA.

This story was first published in The Guardian Post issue No:3148 of Monday June 24, 2024