In its annual report on economic reform, the Central African Economic Community points out the shortcomings in the mobilization of budget revenues in Congo-Brazzaville.
From our correspondent in Brazzaville,
According to its 2020 report, in the first pillar of budgetary policy, PREF-Cemac could not achieve certain objectives, in particular not to improve the quality of public spending.
In addition, the mobilization of non-oil revenues in Congo has not been easy for the reasons mentioned here by Professor Cyr Djena Wembou, Permanent Secretary of PREF-Cemac. “I think all our states have made efforts to mobilize non-oil revenues. But there have been delays in Congo; delays linked to its negotiations with the IMF,” he explains.
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Negotiate debt to traders
Discussions between the Congo and the International Monetary Fund (IMF) under the Enhanced Credit Facility (ECF) have stalled since 2019. The Bretton Woods Institution is asking the country to renegotiate its debt to traders. Because of this debt, companies and citizens are facing unprecedented tax pressure, analyzes Brice Makosso from the Congolese coalition “Publish what you pay”.
“This situation (of debt) puts Congo in a budgetary complexity. It causes the government to exert tax pressure on companies and citizens. It is very clear that this scenario can probably get out of hand by maintaining this pressure on companies and citizens, states Mr. Makosso.
The effects of the health crisis
In 2020, the health crisis due to Coronavirus has had a good impact on the collection of non-oil revenues, says economist and tax expert Ray Okana. “The tax that provides more resources to the budget is VAT or consumption tax. In times of crisis, however, consumption is generally very low because purchasing power decreases sharply due to redundancies and many shocks, he states.
At the same time, the health crisis is presented by economists as an opportunity that has made it possible to discover the shortcomings in the economy. When it comes to mobilizing without oil revenues, Ray Okana is optimistic about restarting the machine in 2021. “I think the machine will work, and therefore restart, better than the regime we were able to follow in 2020,” he said.
To optimize the mechanism for the collection of non-oil revenues, many experts recommend the authorities to lead a major fight against corruption and exceptions.