Local Public Finance in Cameroon

• This course explores the concepts of local public finance in Cameroon
• It aims to help trainees understand its elements and interdependence in running a Regional and Local Authority (RLA)

The Concept of Local Finance

• Local finance will be examined based on its objective and origins
• Finance is managing public or private funds, often used as money or wealth synonym
• Public finance focuses on financial issues of public entities like the State
• Local finance is public finance concerning local authorities
• Confusion between ‘Regional and Local Authorities’ and ‘local authority’ was settled by the French Conseil d'Etat in 1982.
• The Constitution identifies Regions and Councils as local authorities in Cameroon

Legal definition of "local authority"

• Roger-Gabriel Nlep notes that neither the Cameroonian constitution nor decentralization texts define "local authority".
• Jacques Moreau identifies 5 characteristics: geographically limited territory, legal entity, own organs, subordination to supervision, and ability to manage interests
• Jean Claude Eko'o Akouafane says Cameroon's organization of local authorities is inspired by the French model with Sieyès' axiom
• This axiom is: “Deliberation is the work of many; execution is done by one person"
• Local authorities have two bodies: a deliberative organ and an executive organ
• Roger Gabriel Nlep notes that legal terms define it as public law entities, geographically located, with legal entity and state-conferred power to be administered by elected officials

Origins of Local Finance

• Local finance origins trace back to the late Medieval Period
• This was when the king's resources were insufficient for state expenditure
• The monarch asked lords for contributions to the State budget
• Lords made voluntary contributions to cover expenditure, oversaw subsidies granting
• Originating in England, public finance stems from these events
• This consists of prior budgetary authorization, revenue/expenditure, and taxation consent by representative assemblies
• This was instituted in the Magna Carta of 1215, and the 1689 Bill of Rights

Origins of Cameroon Public Finances

• Professor Alain Georges Bessala says Cameroon's public finances are part of the developing countries category
• Development is linked to the history of finance in the French colonies
• A finance law on April 13, 1900, instituted financial autonomy for colonies
• This was followed on December 30, 1912, by the Decree on the financial regime of colonies
• This decree from which present rules derive, appears to be the first source of public finance in Cameroon
• Ordinance No. 59-61 of November 21, 1959, regulated the mode of presentation and the general execution of the State budget
• Cameroon became legally autonomous on March 13, 1959.
• In terms of form, this text was made up of 52 Articles divided into 5 Parts
• The text was intended to govern Cameroon's public finances from January 1, 1960 as indicated in Article 51
• Ordinance No. 62/OF/4 on the financial regime of the Federal Republic
• This was amended by Law No. 2002/001, then repealed by Law No. 2007/006
• This broke from means logic in favor of performance-based budgets
• Law No. 2018/012 on the financial regime of the State and other public entities replaced the 2007 Law
• The 2018 law confirms/refines performance-based budgeting in Cameroon
• This harmonizes the public finance management framework of the State, local authorities and other legal entities
• Terms stipulate that "it sets medium-term budgetary policy for public finances as a whole, and the rules relating to the preparation, execution and control of budgets"
• The Code of Transparency and Good Governance in the Management of Public Finances in Cameroon was adopted
• This was promulgated on the same date as the aforementioned text, through Law No. 2018/011
• Decree No. 2020/375 on general public accounting, repealing Decree No. 2013/160, was published
• This became the benchmark for ‘executing public budgets, accounting, the control of financial operations, and the management of funds/assets of public entities
• These texts apply to regional and local authorities, considering local realities

Transformations in Local Finances

• Local finances play a central role in the transformation of societies, involved in the decentralization process
• This is confirmed in Cameroonian society through changes in local public finances

The Central Role of Local Finances in the Transformation of Societies

• According to Professor Michel Bouvier, local finances now play an important role in the process of transforming society
• Local finances transformations are taking place in today's societies, at the heart of decentralization reforms
• Affect the structures of the State and those of the economic and financial market
• In France, local government spending accounts for about 60% of State spending and 20% of public spending
• Local authorities account for almost three quarters of the Gross Fixed Capital Formation (GFCF) of general government, that is, 11% of the GFCF of the French nation
• In Cameroon, local authorities are expected to act as poles of economic growth
• This should be in strict compliance with the principles of equality and citizen participation
• The growth of the economy of Cameroon was 4.6% in 2023, which was subject to a mitigation of the effects of the Ukrainian crisis
• The oil sector is expected to grow by 4.8%, and the non-oil sector by 0.5%
• Growth in the non-oil sector should be boosted by local production in association with the continued implementation of the import-substitution policy

Transformations in Cameroon's Local Finance

• Local finances in Cameroon have been undergoing constant transformation
• This reflects the deepening of the decentralization process in the country
• In Yaoundé local authorities' general assembly
• This was on 6 and 7 February 2019, the central theme of which was deepening decentralization for a renewed Cameroonian council
• This was followed by the Major National Dialogue (MND), at the Yaounde Convention Centre, from 30 September to 4 October 2019
• Structured around eight commissions, the 8th devoted to decentralization and local development
• This led to the adoption of Law No. 2019/024 of 24 December 2019 on the General Code of Regional and Local Authorities (RLAs)
• It brings together all Cameroon legislation on RLAs in a single document
• Repealed previous provisions contradicting the 2004 and 2009 Decentralization Laws
• Governed the financial regime of RLAs and local taxation respectively
• Changes in local budgetary and financial management include strengthened management methods
• This is used by private companies through consolidating performance-based budgeting at local level in Cameroon
• This involves strengthening the performance culture in RLAs
• This is based on tools such as Annual Performance Projects (APPs) and Annual Performance Reports (APRs)
• This performance requirement is based on the Planning, Programming, Budgeting, Monitoring and Evaluation (PPBS) chain
• This chain is clearly set out in the General Code of the RLAs
• Rational management should be aimed for material resources and assets of local authorities
• This involves controlling local public spending, indispensable for controlling public finances
• The text reinforces local financial autonomy 'through the evolution of expenditure and revenue of local authorities"
• A General Allocation for Decentralization is instituted for the partial financing of decentralization
• The fraction mentioned may not be less than 15%
• Allocation insufficiency may involve State intervention may be by awarding special grants
• The resources needed for local authorities to exercise their powers are devolved to them either through tax transfers, grants, or both

Sources of Local Finance in Cameroon

• Sources are diverse and varied
• National and community legal
• Law No. 96/06 of 18/01/1996 on the Constitution of the Republic of Cameroon is a main legal source
• Ordinance No. 62/0F/4 of February 7, 1962 on the financial regime of the federal republic of Cameroon is an ordinance
• Law No. 2019/24 of 24 December 2019 is a law meant to institute the general code of regional and local authorities
• There are several community texts

Axes of the course

• Local finance is connected with financial resources of regional and local authorities
• A such a study can't be done without local budgets, which are the financial instruments used by local authorities to manage regional and local interests
• Two main axes
• Part One: The Budget
• Part two: Managing the local budget

Part One: The Budget

• It will show the meaning, preparation, principles, types

Meaning and Preparation

• Chapter I: The concept of the local budget
• Chapter II: Preparation of the local budget

THEOF Local Budget

• According to Michel Bouvier, Marie-Christine Esclassan, and Jean-Pierre Lassale, the concept of the budget is both ambiguous and evolutive
• Shed light on definition, types (Section I), and its content (II)

Definition and Types

• The definition will come before the types of local budget
• The ‘Budget’ is a political act, financial expression of a political vision, and a power issue
• Budget may refer to money, but that we do not yet have the money yet
• The budget is an act of forecasting and authorization relating, financial, operations
• Article 23 states that: "the budget determines the nature, amount, allocation of revenue and expenditure
• RLA also endorsed this with “the budget describes the resources and expenditure"; program

Types of Documents in the Budget

• The budget is a forward-looking document that sets out revenue, future, financial projection
• The budget is an act of authorization to grant discharge for revenue and payment
• The budget is an act of development, according to the General Code of RLAs, economic, social, health, education, cultural sporting
• Provisions introduce a performance-based budgeting, makes objectives and efficiency

Types of Local Budgets

• Chapter One, Part Three, Book Five of the General Code of RLAs provides two types of local budgets:
• Initial budget
• Amending budget

The Initial Budget

• The initial budget is prepared and voted, by deliberated organ, not, later, than December 15 yearly; executed, beginning, financial year, from 1 Ja

The Amending budget

• Section 388 of the RLA's General Code
• The intention of the code is to adjust the forecasts of the initial budget
• New allocation, revenue/expend expenditure operation carried from budget previous year

Content of local budgets

• The RLA budget is made up of two main parts: the first is devoted to revenue, and expenditure
• Local revenue is subdivided into operating revenue and investing

Operating Revenue

• Operating revenue are the ones that recurrence in tax and no tax
• The components of text revenue are deductions which form state services
• These include
  • council taxes
  • regional and living

A. Investment budget

• Investment budget is temporary that is exceptional or accidental
• There is impact of the asset in RLA
  • grants
  • repayment
  • proceed to sell

Local Expenditures

• The next part is the expenditure, there is -Article nine of decree to fix by the program

Operating expenditure

-Related to the costs is services and people and allowances

Investment expenditure

• According to the RLH the budget is the repayment of loans in other debts in land

Creating the budget

• The term is ‘to prepare', which is by reflection, it will create a budget with the performance

• Has two main phases which is adopting of the final budget

  Preliminary budget

  • Two major categories: advanced budget the advance phase

Advanced budget

• Consists of review activities of RLA
  • Consistency

The next is a performance review to achievement and discrepancies

Preparation principle

   - Annuity means the authorization is legislative of one year
   - Universality, the allocation; no compensation

Exceptions

• Annexed budgets special treasury support

The principle of budget unity

Is that everything must be in that

specialty

Is a special is the appropriation but cannot avoid

Balance

It says shall be balance

Emerging

sincerity, transparency with accuracy

• The principle of what was put forward must be followed -The general code put certain things that must be followed Is also the budget calendar for regions is certain months

Results

• Consideration citizens and the debate To vote and examine to adopt

Supervisory

• The State representative Approves the final budget

Management

It is divide into two, is to control into the local budget

In the local budget

This Is that certain steps must be studied, which is the procedure There were three main actors, the authorizing financial controller and the account There's also the manager the coordinator

The budget

Revenue

• It involves the collection are vouchers
• With the 3 leaf-book the reconciliation

Expenditures

It involves the payment and creditors as the cashier

Hierarchy

• It's very clear there are senior is subordinate

The budget begins once the preparation phase begins date

Action manager

Are responsibility implementation for data consolidation For the service and budget in program for the activity For costs

Execution procedures

The local budget

there are two major parts the revenue and expenditures

Expenditures

Which there is the administrative fees: commitment application

Revenue

• The authorization 2 issue with the depth of the claim

Controlling execution

• A democratic operation, transparency the financial control
• Audits and a legal system in the process administrative internal

Internal

The financial controller in municipal before

External control

Is the different ministries

Citizen control

To have access to report, minutes, committees with a free access

Legal Control

Is exerciser auditors That judging the statement in mismanagement