Budgetary orientation debate in Parliament

Prime Minister, Anatole Collinet Makosso, presents the main options of the Medium Term Budgetary Framework (MTBF) 2022-2024
07 Sep, 2021

As part of the budgetary orientation debate, the Prime Minister, Head of Government, Anatole Collinet Makosso, presented on Monday 6 and Tuesday 7 September 2021, at conference centre in Brazzaville, respectively before the National Assembly and the Senate, the main options of his Government's budgetary policy for the next three years 2022-2024. 

The discussions between the Government and the two Houses of Parliament (presided over by Isidore Mvouba and Pierre Ngolo) is a crucial stage in the process of preparing the State budget for the year 2022, the first year of the above-mentioned period. 

At the outset, the Prime Minister outlines the main risk factors that have created budgetary and financial imbalances in Congo-Brazzaville, namely: the economic crisis, the financial crisis and the health crisis due to the Covid-19 pandemic. These factors have had a major impact on the implementation of the three-year programme concluded with the International Monetary Fund (IMF) under the 2019-2022 Extended Credit Facility (ECF). As a result, they have compromised all disbursements expected from the Fund under this programme, including disbursements related to the response to the Covid-19 pandemic.  Anatole Collinet Makosso deplored the lack of assistance from technical and financial partners (TFPs), which has not allowed his government to benefit from sufficient room for manoeuvre to stabilise and relaunch the economy. 

Despite this, he noted and praised the resilience and self-sacrifice shown by the Congolese in managing these crises.

Prime Minister Collinet Makosso then presented the priorities of his government's action for the next three years.

Faced with the vulnerabilities of the economy and public finances, Anatole Collinet Makosso committed his government to pursuing a prudent budgetary policy, with a view to re-establishing macroeconomic balances first. Secondly, to ensure the basis for a solid economic recovery.

In this perspective, the Medium-Term Budgetary Framework (MTBF) 2022-2024 will take into account the commitments made by the President of the Republic, Denis Sassou-N'Guesso, who was recently elected in the March 2021 presidential elections. This budgetary policy will focus on the continued modernization of the Tax and Customs administrations; the strengthening of fiscal policy; the rationalization of tax expenditures; and the restoration of the viability and sustainability of the public debt.

According to the Prime Minister, the Medium-Term Budgetary Framework 2022-2024 has been developed on the basis of assumptions derived from analyses of factors likely to influence growth in the long term. He indicated that the projections of economic activity over the next three years reveal an exit from the economic recession and signal that Congo- Brazzaville is entering a phase of sustainable economic growth for the years to come.

The Head of Government noted in particular, in this framework, an average growth rate of 3.6% of the Gross Domestic Product (GDP).  This development, he explained, would be linked to the good performance of activities in the non-oil sector, the fruit of the policy of diversification of the Congolese economy.  According to the Prime Minister, the assumptions for the oil sector show an average change in production of 113.1 million barrels.

Trends in the Medium-Term Budgetary Framework 2022-2024, according to the Prime Minister

 

"Based on these assumptions, the analysis of the Medium-Term Budgetary Framework 2022-2024 shows the following trends:

 

  1. An increase in budget revenues at an average annual rate of 5.8%. By economic type, tax revenues would increase by 6.7%; donations, bequests and assistance funds would rise to 6.5%; while social contributions would increase by 0.5%. Other revenues are expected to decline by an average of 4.5%;   
  2. A contained increase in budgetary expenditure, with an annual trend of 5.1%. Among the expenses of the general budget, there was a fall in the financial burden of the debt at an average annual rate of 20.5%; an increase in personnel expenses of 0.5%; an increase in expenses for goods and services of 6.5%; and an increase in investment expenses of 41.4%; 
  3. An increase, particularly in social expenditure, with an average rate of 20.3%. This recurrent expenditure will focus on health, social protection, basic education, the advancement of women, electricity, water and urban sanitation, agriculture, fisheries and livestock, and other infrastructure. Other state operating expenditure will increase by an annual average of 1.6%, In the end, we note that, overall, the state's budgetary expenditure over the next three years (2022-2024) will see an increase in expenditure linked to the social sectors and investments, as well as a stabilisation of expenditure in other sectors. To achieve these objectives, the government will continue to consolidate public finances, relying on two pillars. Firstly, better mobilisation and securing of internal resources. Secondly, the improvement of the quality of public spending”.

 

The Prime Minister reassured parliamentarians that a rigorous monitoring of budgetary balances will be carried out, especially the basic primary balance excluding oil, which is currently in deficit, and would represent 11.6% on average of gross domestic product (GDP).

For Anatole Collinet Makosso, it will be a question of ensuring that his government is able to improve the performance of the non-oil sector, as recommended in the new 5-year National Development Plan (NDP), currently being drawn up (2022-2026).

He added that the overall budget surplus, including grants, would represent an average of 2.9% of the Gross Domestic Product, while public debt would represent an average of 51.7% of GDP and would be below the CEMAC community norm (set at 70% of GDP).

 

To reach this level, the Head of Government announced that his country has relaunched negotiations with bilateral partners and commercial creditors, in order to benefit from new favourable conditions and pursue the objective of making the Congolese debt sustainable and viable.

Finally, he indicated that the coverage of the global deficit of financing of the State budget will be ensured as well by the resources emanating from an expected improvement of the economic situation; as by the restructuring of the public debt as well as by the contribution of the technical and financial Partners.

 

Recommendations of the Members of Parliament to the Government

At the end of the discussions, the Members of Parliament made some recommendations and suggestions to the Government which include:

  • Respecting the deadlines for submitting the Medium-Term Budgetary Framework documents for debate in Parliament, in accordance with Article 10 of Organic Law No. 36/2017 of 3 October 2017 on the Finance Laws;
  • Tracing, in a visible manner, in the State Budget, mining and digital economy revenues, on the one hand, and forestry revenues, on the other hand, by providing information on the share swallowed up by the tax system as contributions to the construction of roads to open up the country by forestry companies; 
  • Applying the provisions of the 2020 Finance Law concerning the share of taxes and levies intended for local authorities; 
  • Achieving the objective of zero exceptional exemptions, in accordance with the provision set out in the 2019, 2020 and 2021 Finance Laws;
  • Maintaining, in the Special Treasury Accounts in the 2022 Budget, the National Solidarity Fund for the support of businesses, which was set up following the Covid 19 pandemic;
  • Paying, on a regular basis, the pensions of retirees, following the example of civil servants' pay;
  • Paying students' scholarships regularly;
  • Including in the 2022 Finance Law, the contributions of all companies in the public portfolio;
  • Studying the possibility of creating the State Holdings Agency, responsible for managing the State's holdings in the various sectors, and ensuring that the country plays its role as a shareholder and investor in companies deemed strategic;
  • Operationalising the single land office, in order to facilitate the completion of all administrative, legal, technical and financial formalities for the large-scale registration of real estate properties and the updating of land titles,
  • Taking into account the victims of the 4 March 2012 disaster;
  • Taking into account the role of agriculture in the transfer of road maintenance resources (agricultural tracks for the evacuation of products from production basins to the major consumption centres);
  • Taking into account the construction of the bridge over the Sangha.

The Press Office of the Ministry of Finance

Category:NEWS
Sub Category:BUDGET