LRC ECONOMIC SIRUATION DEGENERATES AND TURNS RED

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• December 12, 2022

The colonial LRC government admits its inability to provide solutions.

I would like to apologize to the readers for being quite long. But given the gravity of the situation, it is necessary. An audio that has gone viral on WhatsApp since December 8, 2022 is heard by the Colonial LRc’s Minister of Finance, during the review of Cameroun's 2023 budget. Speaking on behalf of the colonial failed Yaounde government and not on his own behalf, this minister said that Cameroun's tax and customs revenues would amount in 2023 to some 3000 billion FCFA. But that these 3000 billion will simply cover in their entirety, current operating expenses. There will therefore be practically nothing for investments and the payment of the especially domestic debt. State service providers, and other state creditors like teachers, need to be well prepared to drag the devil by the tail. This statement sends shivers down the spine and should seriously worry Camerounese. Indeed, in 2023, the money collected will essentially be used to pay civil servants, the military, military expenses, the purchase of administrative cars, fuel for the administrations. There will be practically nothing for public investment, especially productive (industry, etc.).

In short, the development of French Cameroun will be put more on hold.

This situation had been foreseeable for years, given the budgetary orientations on State expenditure. No real productive investment policy capable of generating resources has been put in place since 2006, the year in which the completion point of the HIPC initiative was reached. We still remember the fire alert launches of the economist Christian PENDA EKOKA or Dieudonné ESSOMBA. French Cameroun has been content to resort to external indebtedness to finance the current expenditure of the State or infrastructure which, until now, raises questions about their economic reliability. The African Development Bank (AfDB), which is the pan-African tool for financing development in relation with the African Union (AU) and the United Nations Industrial Development Organization (UNIDO), produced the 24 last November, while LRC were immersed in the atmosphere of the World Cup, a classification on the low level of industrialization of Cameroun.

Despite its enormous potential, LRC is ranked 24th behind Gabon, Equatorial Guinea and Congo. A worrying drop from its rank in the 1980s, when it was among the first most industrialized countries in Africa. This very dishonorable ranking, once again questions the outcome of all these structuring projects announced with great fanfare during the CPDM presidential campaigns: "Great Ambitions, Great Achievements, Great Realisations, Great Emergence..." It is also proof that LRC's significant debt, which amounts to 12,000 billion in June 2022, according to the latest report from the Caisse Autonome d'Amortissement, will not have been used to provide the country with production tools.This allows us to say that LRC's debt is unproductive. Because debt must be able to create and generate activities that repay it. What, therefore, will all these debts have really been used for, these loans which should have supported the industrial development of LRC? During the questions to the colonial government, the PCRN, MP the Honorable Cabral LIBBII had asked an essential question, but voluntarily remained unanswered, on the share of productive investment on the budget and the indebtedness of LRC.

What does LRC put as money for its industrialization? Even infrastructure such as hydroelectric dams, highways and roads are unfinished and below their productivity expectations. This is the case of the "indebted" projects of the Meemvele dam or the Douala-Yaoundé highway. The consequence of this finicky economic policy is that there are no industries, and more generally no activities in the sector of large-scale productive investments that can impact the growth of the country’s economy.As a reminder, it is productive investments that create wealth, boost growth and generate jobs in a country. It is also the returns from direct productive investments that repay debts.However, the absence of productive investments obliges LRC to repay its debt: - By going into even more debt, to pay its debts. This is called refinancing. This is what happened in 2021 with the last eurobond of 450 billion CFA francs, which is an international bond loan, which made it possible to repay another eurobond from 2015.

- By increasing taxes and duties.

As a result, it is the common people, already deprived of the minimum existential conditions of life, who are called upon to repay the unproductive debt contracted by the sailed Yaounde colonial government:

Fiscal stamps go up from FCFA 1000 to FCFA 1500 in 2023

The Airport Tax (droits de timbre d'aéroport) which had been cancelled is now to be reinstated as a separate payment, per the 2023 Finance Law effective January1.

- 1,000 for all domestic flights

- 25,000 for flights within the CEMAC Region

- 40,000 for international flights out of CEMAC Region in Economy.

- 120,000 frs for flights outside the CEMAC x in Business Claas'.

Hence this crazy tax increase that is going on with the 2023 finance law.

And yet, in their own SND30 and well before the DSCE, they had nevertheless listed productive investments and particularly industrialization, in particular through the transformation of our raw materials, as priorities. And how to achieve an industrialization of LRC and therefore productive investment when, for example, the mining law only reserves 15% of its mining resources for local processing? All industrial experts are unanimous in saying that this 15% reserved for local industry cannot help develop the industrial sector of a country, which truly has industrialization ambitions.

This is also the case with the forestry industry.

After passing laws and even regulations at the community level, LRC continues to export logs, while these processed locally would have created income-generating and job-creating industries. Similarly, in the area of fishing, LRC does not have fishing industries allowing fish to be caught on its maritime coasts. This would also have avoided fish imports which further widen the foreign exchange deficit. According to a recent report by a Belgian television channel, more than 100 foreign vessels falsely flying the Camerounese flag are fishing off both the Camerounese and Ambazonian coasts, having obtained front fishing permits from the colonial LRC authorities. All this fish is sold outside and these fishing boats mainly employ foreigners.

The colonial LRC’s Minister of Finance also mentioned the example of rising prices in the price of clinker which is the raw material that allows the manufacture of cements. How can we accept that LRc is still obliged to import Clinker when this material is in abundance in Guider? All you have to do is create a Clinker factory there to supply the various cement factories in the country. With these few examples, the CPDM regime shows that it has no intention of industrializing or fostering productive investment in Cameroon.To deny it, the colonial LRC's mining code must therefore be revised on the quota of 15% of mining resources reserved for local industries, the ban on the export of logs must be implemented, as well as the creation of Camerounese companies, fishing and clinker manufacturing in Guider. Even at the level of the SNH which manages LRC hydrocarbon resources, information indicates that Cameroun is in negotiation with Equatorial Guinea to export our gas resources there for their industrial transformation in Equatorial Guinea. How can a country develop the industry of Equatorial Guinea instead of its own? Such an undertaking is an act of high treason. It must be stopped. Where is the national preference in all this?

Young Camerounese need jobs and it is in Cameroun that they must find industries that would employ them Also, in relation to the sum of 800 billion annual fuel subsidies that the the colonial government prides itself on supporting to avoid increases at the pump, why not go into debt to build and provide LRC with a refinery that will process its own oil? What can otherwise justify the maintenance of imports of refined oils or to be refined, if not the collection of commissions, by a few stakeholders and actors hidden in the high corrupt colonial administration?

And only God knows how juicy the commissions on trading petroleum products are!

By Christian Ntimbane Bomo, edited for Undaunted

Civil Society of RECONCILIATORS