On 21 December 2015 President Paul Biya, President of the Republic of Cameroon promulgated Law No. 2015/ 019 of 21 December 2015, Finance Act relating to the Republic of Cameroon for the year 2016. The budget stood at 4 234 billion Francs CFA against, 3 746.6 billion Francs CFA in 2015, an increase of 488.1 billion Francs CFA in absolute terms and 13.02% in relative value. There is no gainsaying that local councils contributed a huge amount of this revenue for the year 2016 especially as these councils house a greater part of economic activities in the country such as raw material exploitation. It remains a paradox that despite the role played by local councils in revenue collection in Cameroon, these councils remain poor and underdeveloped. One would have thought that with the inception of the decentralisation process in the 1996 Constitution of Cameroon a majority of councils in the country should have been developed by now. It was in 2010 that the state began the first transfers of competencies and resources to local councils. Councils cannot booast of road infrastructure like farm to market roads, water and electricity. In 2010 the state transfered 10 percent of taxes (TVA, IS) to local councils. The percentage has increased to 25 percent in 2015 but this remains insignificant. Is there a problem with the collection and redistribution of the taxes. Do the central services cooperate adequately with the local councils in tax collection and distribution ? Is there adequate good governance and transparency in the management of taxes collected so as to target local development ? These are some concerns this contribution seeks to address.
In 2010 just 9 ministries transfered funds to councils to the sum of 23 072 363 000 f cfa. In 2012 the number increased to 17 Ministries after a lot of pressure from government. These 17 ministries transfered 23 071 163 000 cfa, which was not significant despite the increase in the number of ministries. This was done under the banner of the ongoing decentralisation process.
In Cameroon, there is inefficiency with respect to the collection and redistribution of centralised state and local taxes. Taxes especially collected at the local level are centralised for subsequent redistribution. The blind centralisation of taxes affects the proper management of public funds as there is no transparency and no accountability. The end result of this is that even local communities with great economic potential like Mbanga and Penja in the Littoral region of the country remain underdeveloped. Likewise local councils like the Santa Council in the North West region of the country with enormous economic potential remain underdeveloped.
Another very disturbing issue is that in Cameroon, local communities do not have the freedom to set their tax rates. This leaves them no room to partake in tax competition that will allow them to fight against the draining of financial resources by the central government.
The management and use of funds generated from local councils in Cameroon remains an issue of concern. Bad governance and lack of transparency in the allocation of budgets remain a serious ill plaguing the underdevelopment of local councils in Cameroon.
Local councils in Cameroon cannot yet boast of well trained personnel capable of designing and executing large projects for the needs of thier local communities. This is the case of local councils in the economic capital of Cameroon, Douala as well as local councils in remote parts of the country like Nkambe. Not many personnel are well trained nor understand the dynamics of council development projects. According to a study commissioned by the state in 2008, 39% of agents do not have adequate training or have a diploma related to thier duties, but posses only drivers licences. 64% of them have qualifications inferior to the BEPC and only 20% of them attain the Bac level ( BAC + 3, + 4, ou + 5). This creates a scenario where even in rich councils like the Douala V Council we still find abandonned projects, poor roads and lack of other social amenities like waste disposal services.
The average allocation to capital investment to municipalities in Cameroon is very low. In 2007 it stood at 14% and in 2008 it dropped to 11% . On the other hand, recurrent expenditure for the same period was average. In 2009, it stood at 40% and 50% in 2010. Thus, a large proportion of expenditure was invested on general public services (administration) and salaries rather than on capital investment, reason why municipal councils in Cameroon suffer from lack of well trained personnel, poor roads, lack of water and electricity.
The territoriality of taxation needs to be respected in Cameroon. This means that a local council should be able to determine how taxes collected therein is to be channelled for development of that council. Value Added Tax for instance collected at local councils need not be transferred in its totality to the central government. There is need for local councils to be able to make sure that the taxes collected are used to finance its operations, and transfers should be made to the central administration if there is a surplus.
There is equally need for local councils in Cameroon to have the freedom to set their tax rates, which will give them room to partake in tax competition that will allow them to fight against the draining of financial resources by the central government. This competition will also introduce fiscal discipline and encourage good public expenditure management. Such motivation will attract more households and businesses to willingly pay taxes to thier respective local councils as such a propelling factor for development at local councils in Cameroon.
This article was originally published in french as ‘Décentralisation malade au Cameroun‘ by LibreAfrique.org
Chofor Che is founding President of the Central African Centre for Libertarian Thought and Action, Cameroon (CACliTA). He is also analyst with LibreAfrique.org, African Liberty.org and Audace Institut Afrique.