The Prime Minister, Head of Government, Clément Mouamba, took note of the recommendations made by the members of the Parliament following the Budget Orientation Debate (BOD) 2020-2022. This commitment was made during the two plenary sessions on Monday 12 August 2019, held on the eve of the closing of the 6^thordinary sessions of the two Houses of Parliament, which opened on 2 June at the Palais des Congrès in Brazzaville.

Following the scrutiny and adoption of Reports of their respective Economic and Financial Committees, the members of Parliament debated with the Government (including the Prime Minister and the Minister of Finance) issues related to the Budget Implementation Summary as at 31 March 2019 and the Medium-Term Budget Framework (MTBF) which sets out the State budget projects with a three-year outlook (2020-2022).

After the MPs and senators have been informed of the budgetary orientations contained in the MTBF, and which foreshadow the priorities to be included in 2020 budget of the State of Congo, they have given their views on these orientations and made recommendations to the Government. 

Reminder of the main macroeconomic indicators and parameters

The evolution of main macroeconomic indicators and parameters of Congo is as follows:

• Economic activity experienced growth relatively after two years of crisis. This economic growth is as follows:  -2,8 % in 2016; 3,1 % in 2017; 1,2 % in 2018, and a 5 % rate is expected  for 2019;
• inflation rate remains below the community standard limit of 3 % (0,4 in 2017; 1,2 % in 2918, and in 2019, 1,5 % is forecast);
• the current account deficit improved significantly to 392 billion FCFA in 2018 compared to -295 billion FCFA in 2017;
• the deficit of the balance of services will continue to increase by -1,049 billion FCFA in 2017; -1,410 billion FCFA in 2018, and will reach -1,555 billion FCFA in 2019;
• the deficit in the income account worsens further, from -405 billion FCFA in 2017, -718 billion FCFA in 2018, and will reach -722 billion FCFA in 2019;
• the deficit in the balance of current transfers is constantly decreasing (-255 billion FCFA in 2017, -248 billion FCFA in 2018, and will rise to -237 billion FCFA in 2019);
• the deficit in the financial account continues to increase, after having been surplus in 2017 by 1,968 billion FCFA, by -34 billion FCFA in 2018, and it would be -516 billion FCFA in 2019;
• the capital account surplus was 80 billion FCFA in 2017 and 4 billion FCFA in 2018; and it would be 32 billion FCFA in 2019;
• the balance of payments presents respectively  a deficit balance  over the period 2017 to 2019 of 249 billion FCFA, -75billion FCFA and -133billion FCFA;
• the improvement of the net external asset position (212 billion CFCFA in 2017; 252 billion in 2018, and 400 billion FCFA at the end of 2019;
• domestic lending is declining, from 1,807 billion  FCFA in 2017to 1,772 in 2018, to 1,877billion FCFA in 2019. 

 Summary of the budget implementation as of March 2019

As at 31 March 2019, revenue amounted to 474,9 billion FCFA, 23 % of the annual forecast, and expenditure amounted to 289,1 billion FCFA, an execution rate of 18,5 % forecast From this implementation of the 2019 budget, there is a budgetary surplus of 185,8 billion FCFA, an achievement rate of 39 % compared to the annual target.

 Budget forecasts for 2020

Consistent with the priorities of the 2018-2022 National Development Plan (NDP) and the implementation of the three-year Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF), the revenue and expenditure assumptions used for budget 2020 are as follows:

The oil sector

Parameters used for the assessment of oil revenue are as follows:

• Production: 140 million barrels in 2020 compared to 132 million barrels in 2019 ;
• Brent barrel price : 59.0 $ in 2020 compared to 58.2$ in 2019 ;
• Discount applied to Congolese oil : 2.7$ in 2020 compared to 2.5$ in 2019 ;
• Congolese crude oil prices : 56.3$ en 2020 compared to 55.2 en 2019 ;
• Exchange rate: 1$ = 555.2 FCFA in 2020 compared to 560 FCFA in 2019.

Projections of budgetary resources

Revenue from the State budget for the 2020 financial year would increase to 2,139.9 billion FCFA compared to 2, 077.9 billion FCFA in 2019, are as follows:

• Tax revenue will amount to 846 billion FCFA in 2020 compared to 806.3 billion FCFA in 2019;
• Donations and bequests would amount to 28 billion FCFA in 2020 compared to 29.2 billion FCFA in 2019;
• Other revenue will increase to 1,211 billion FCFA in 2020 compared to 1,160.8 billion FCFA in 2019.

Projections of budgetary expenditure

The expenditure of the State budget in 2020 would increase by 2.6 % compared to 2019 estimates, to 1,602.4 billion FCFA.

General Budget Expenditure

They would reach 1,057.63 billion FCFA in 2020 compared to 1,552.1 billion FCFA in 2019, and are broken down as follows:

• Financial debt costs would significantly fall in 2020, to 86 billion FCFA compared to 212 billion FCFA projected for 2019; 
• Staff costs would increase, from 383 billion FCFA in 2020 up from 374 billion FCFA in 2019. This progress reflects the government's desire to preserve the achievements of State employees in this context of economic crisis;
• Expenditure on goods and services would amount to 188 billion FCFA in 2020 compared to 186 billion FCFA in 2019;
• Transfers expenditure will decrease to 511 billion FCFA in 2020 compared to 561.2 billion FCFA for 2019;
• Capital expenditure will increase to 272 billion FCFA in 2019 to 511 billion FCFA in 2020; 
• Other expenditure are set at 48 billion FCFA in 2020.

Expenses of ancillary budgets and the special accounts of the Treasury

Ancillary budgets and special accounts of the Treasury are, in principle, balanced in resources and in expenses.

• The expenses of ancillary budgets will fall in 2020 to 10 billion FCFA compared to 11.8 billion FCFA forecast in 2019;
• The expenses of the special accounts of the Treasury will continue to increase to reach 70.3 billion FCFA in 2020.

The fiscal balance

The management of Public finance in 2020 will record a surplus budget balance that will gradually reduce the deficit of the basic non-oil primary balance, finance the funding gap and reduce in the medium term. 

The public debt

The stock of public debt in 2019 shows an average of 4,707.5 billion FCFA, the stock of this debt would decline at an average annual rate of 736.3 billion FCFA. In 2020, the external debt would gradually fall to 3,809.6 billion FCFA and domestic debt.

Orientations on budget resource allocations by sector for 2020 

Budget Resource Allocations for 2020 are directed to continue to deliver on the priorities of the Government's Agenda for Action, as recorded in the NDP, as follows:

• Social sectors: 494.2 billion FCFA, representing 35.6 % of total allocations, including:
• Operation: 404.2 billion FCFA;
• Investment: 86.9 billion FCFA;
• Defense and security: 247.4 billion FCFA, 17.8 % of total allocations.

Main recommendations of Members of Parliament  

The main recommendations of MPs concerned the reduction of the deficits of the primary non-oil balance, from 27 % to 17 %; reduction, through securitisation, domestic public debt, both commercial and social, to boost the economic fabric); good governance (which implies, in particular, the fight against corruption and the reconciliation of oil, forestry, mining and other revenue recovered by the State). In addition to these recommendations, the diversification of the economy (outside the oil sector) through the involvement of Congolese actors in agriculture; the elimination of the screaming deficit of teachers in schools  of all cycles; the completion of the Accelerated Municipalization projects in the 12 divisions of Congo; the effective implementation of the transfer of financial management and basic social infrastructure to local authorities: roads, schools, hospitals provided by local authorities), etc.

 The Government took note of all these recommendations. The Prime Minister, its leader, went on to say “they will be taken into account gradually, within the limits of available resources, and respecting the objective of the overall balance”.

I recall that this budget orientation debate is an application of the Congolese Law N0.10-2017 of 9 March 2017 relating to Code on Transparency and Accountability in the Management of Public Finance, and the Organic Law N0.36-2017 of 3 October 2017 on finance laws. These two texts stem from the New Harmonized Framework for the Management of Public Finance of the Economic and Monetary Community of Central Africa (CEMAC), which obliges the government, among other things, to regularly inform Parliament of the implementation of the budget before the tabling in Parliament of the draft finance law. 

The press office of the Ministry of Finance