CEMAC countries decry increase in public debt

The Economic and Monetary Community of Central Africa (PREF-CEMAC) has described as unsatisfactory “the deterioration of budget balances and the increase in public debt”, APA has said.

This was made in a statement at the end of an extraordinary summit of heads of state in N’Djamena, Chad on Thursday.

Launched in July 2016, the PREF-CEMAC program is implemented at only 32 percent, a situation CEMAC said is “far from the average level”.

According to experts, “it would be useful to define a common method of assessing the economic and social profitability of public projects, such as those financed by external aid.”

In addition, through the 2017/2019 roadmap of PREF-CEMAC some solutions were proposed to the states for a better implementation rate of the program.

These include “the reduction of state subsidies to companies or the strengthening of the capacity to monitor the transposition of texts into national legislation, the delay of which contributes to the lack of transparency in public finances.”

According to the APA report, the PREF is based on three fundamental pillars, namely strengthening tax policy, streamlining and improving the quality of public spending through targeted fiscal policies and the harmonization of procedures, improved coordination of budgetary policies, all key for the cohesion of the monetary union and financial integration.


Among the failures witnessed are “the low mobilization of tax revenues, the mixed increase in the indirect tax rate of the VAT and excise taxes, as well as stagnation of direct taxation”.

The statement said: “States with a low tax burden must continue the efforts of convergence towards the CEMAC’s average”.

This presupposes “the rationalization of tax expenditures, the use of a reduced rate of VAT as an alternative to exemptions, the introduction of a self-liquidation mechanism of the VAT for the importation of certain goods and equipment, the strengthening of tax administrations by a revision of the regional tax legislation (transfer prices, permanent establishment, thin capitalization rule) following the inclusive framework proposed by the OECD.


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