Financing growth, mitigating shocks: Treasury reforms sustaining Cameroon’s economic resilience.

Placed under the control of the Director General of Treasury, Financial and Monetary Cooperation, Sylvester Moh Tangongho, who is answerable to the Minister of Finance, Louis Paul Motaze, Cameroon’s treasury has been at the centre of tranquilising major State financial engagements and commitments. 

The gains that have been made and still counting are on the strength of reforms at the Treasury Department, that tie with the State’s financing plan. 

Thanks to the consistency in reforms and foresightedness in a volatile global economic environment, the Treasury Department has remained solid and buoyant, ensuring a meticulous management of scarce resources.

It is an institution that has worked in line with instructions from the Head of State, President Paul Biya, in maintaining the credibility and financial worthiness of Cameroon at the international monetary market. 

Till date, investors continue to show increasing interest in bonds issued on both the domestic and international markets. This alone, economic analysts are unanimous, continues to make a case for the accruing reforms-driven benefits that the Treasury Department boasts off.

How and why Cameroon has not defaulted in its domestic and international commitments have been credited to the Treasury Department. 

Government has across the years been able to regularly pay salaries, despite the difficult security situation in the North West and South West Regions for eight years running and Boko Haram incursions in the Far North Region. There is also the influx of refugees from the neighbouring Central African Republic, CAR; which has increased government’s spending. 

Officials have always taken actions to ensure that there is no tension at the treasury. It is a treasury that handles monthly salary package for State workers at over 110 billion FCFA in addition to addressing the needs of various service providers. 

It has also kept pace with financing major development projects and social interventions without disfavouring other set goals.

Global inflation and a multiplicity of global wars amid rising interest rates have rattled financial institutions and the economies of nations but in Cameroon the effects have been minimal, thanks to the ingenuity of the brains at the Treasury Department. 

They are being credited for always being able to find ways around to stay Cameroon’s economy relevant and assertive, especially when it comes to liquidity.

Within the Economic and Monetary Community of Central African States, CEMAC, Cameroon still holds an enviable debt to Gross Domestic Product, GDP, ratio. 

While the debt ceiling in the Subregion is pegged at 70 percent of GDP, Cameroon’s debts to GPD is still within the 45 percent threshold.

Even in terms of global classification, the ratio makes for a good case in Cameroon’s dynamism as an economy with uncommon resilience.

Structural scales that speak 

Under its pro-active leadership, the Treasury Department of the Ministry of Finance has, in the last couple of years been consistent in introducing reforms. 

The varied adjustments, experts are saying, makes for its successes across different markets and management prowess.

Some of these reforms are; strengthening the budgetary and accounting data of regional and local councils. 

There is the overhaul of the Single Treasury Account; adjustment of the information system to develop the PATRIMONY Software; boosting Accounts Internal Auditing; cataloguing Cameroon’s fixed assets in certain regions plus the switch to asset accounting.

These reforms have become major aspects that are driving stitch-in-time services, putting money in the public till where it is needed and ensuring priority in line with the directives of hierarchy.

Commenting on the positive impact of the landmark reforms, in the latest publication of the Treasury Department quarterly publication, Bulletin Du Tresor Camerounais, the Director General of Treasury, Financial and Monetary Cooperation, Moh Sylvester, said “…these operations confirm the Public Treasury’s role as a major actor in financing the national economy and mitigating shocks”.

He further commented that the gains are because the measures “highlight the financial engineering that combines the prospection of financing debt sustainability and regulation of outstanding debts”.

Cameroon’s credibility in international market

In recent times, the Treasury Department made waves when it went to the national and international financial markets to operationalise the raising of 616 billion FCFA as authorised by the Head of State, Paul Biya, through a decree of July 22, 2024.

Asserting that bonds placements remain a vital instrument among countries in financing investments and budget deficits, the Director General of the Treasury said it was Cameroon’s “first recourse to private placement issue for such substantial amount”.

To note that within the operation, Cameroon raised over 335 billion FCFA from the international financial market, for which the Minister of Finance had indicated key areas where the money would be directed to.

Commenting on the operation in the August 2024 edition of Treasury Department quarterly magazine, Moh Sylvester underscored that “beyond the credit worthiness of the State, the success of the operation has led to a substantial increase in the demand for the sovereign instruments of the State of Cameroon in financial markets”.

Moh Sylvester also situated that the placements have “rendered these instruments more liquid and attractive to investors. In Cameroon, it is subject to the State financing plan, which is based on the annual finance law”.

Treasury DG pushes for more reforms 

Despite the high rating and exploit of the Treasury Department, its Director General, Moh Sylvester, has intimated that “we must continue flagship reforms, such as the operationalisation of the Deposits and Consignment Fund, which promotion have reached a satisfactory pace”.

He added that when it comes to the Deposits and Consignment Fund, CDEC, things are on the right path with gains as desired by “national and some regional stakeholders”. 

To note that within a few months of operation, CDEC has mobilised over 17.5 billion FCFA.

Moh Sylvester saluted the putting in place of a team, grouping officials of the Bank of Central African States, BEAC; Central African Banking Commission, COBAC; and the Association of Financial Institutions of Cameroon, APECAM, to address unclear issues relating to the surrendering of funds to CDEC.

“We need to specify COBAC’s supervisory role on the banking activities of the Deposits and Consignment Fund. These Funds fall under the exclusive jurisdiction of Member States,” the Treasury DG stated in Bulletin du Tresor Camerounais. 

This article was first published in The Guardian Post Edition No:3260 of Tuesday October 15, 2024