Date: April 7th, 2021 Time: 3:00 pm (Cameroon time) Duration: 90 minutes
Venue: Zoom Platform (Register Here)
The issue of financing is at the heart of the renewal of territorial decentralization marked by the establishment of Regions in Cameroon. The General Code of Decentralized Territorial Collectivities (GCDTC) adopted on December 24, 2019 did not ignore this thorny issue. Echoing the principle of the free administration of local authorities enshrined in the Constitution of January 18, 1996 with the corollary of the administrative and financial autonomy of the DTCs, the GCDTC specifies in its article 11 (2) that “Territorial Collectivities have budgets and own resources for the management of regional and local interests ”. Article 12 is even more precise when it states that “the resources necessary for the exercise by the local authorities of their competences are devolved to them either by transfer of taxation, or by endowments, or by both at the same time”. Reading this provision, it is easy to understand that taxation and grants constitute the two main mechanisms for financing decentralization.
In fact, the tax transfer mentioned above refers, on one hand, to the local taxes and duties, on which the legislator legislated by the 2009 law on local taxation with its subsequent amendments; On the other hand, the transfer of taxation also refers to those of state taxes, the proceeds of which are allocated in whole or in part to DTCs. Regarding allocations, the GCDTC provides in its article 25 (1) which “established a General Decentralization Endowment intended for the partial financing of decentralization“. This resource, indexed to a fraction of annual government revenue, may not be less than 15%. Moreover, special allocations may also be granted to local authorities by the state in the case where insufficient financial resources risk compromising the achievement or execution of public service missions.
In addition to local taxation, the General Decentralization Endowment (GDE) and special allocation, the GCDTC has considered other financing mechanisms. These are the resources emanating from the transfer of powers from the State to the DTCs, resources resulting from income-generating activities, the proceeds of the exploitation of the domain and of its services, the resources drawn from the exploitation of the soil and subsoil, equity investments, the creation of establishments or local public capital companies, decentralized cooperation, loans, public-private partnerships, financing of private individuals, donations and bequests.
In view of all these mechanisms, one would come, hastily no doubt, to the conclusion that the financing difficulties which have long obstructed the smooth running of decentralization are only a distant memory. But in reality, how effective are these financing mechanisms? The issue of efficiency deserves special attention in view of the obstacles inherent in the operationalization of the latter. It suffices to point out that the main sources of financing, namely the GDE and local taxation have not yet been acquired. In 2020, the GDE was 49.9 billion, or 1% of the state budget. In 2021, it increased significantly to 232.1 billion, or 7.2% of state revenue. Despite this increase, we are well below the 15% forecast by the GCDTC. With regard to local taxation, it remains a real Arlesian, because the fiscal autonomy of the DTCs is put to the test in practice, as is the management of subsoil resources. As for borrowing, it remains confined within a restrictive legal framework and a coercive financial framework. In an international environment disrupted by the COVID-19 crisis, an internal war in the North-West and South-West regions with a strong impact on public finances, a stifling domestic and external debt, a trade balance deficit and massive embezzlement of public funds, it is not without interest to debate the question of the effectiveness of the financing of territorial decentralization in Cameroon.
Objectives of the dialogue
The objective of this public dialogue is to question the effectiveness of the decentralization financing mechanisms provided for by the GCDTC. By giving the floor to experts, this public dialogue aims to:
- Clarify the specificities of each decentralization financing mechanism;
- Question the difficulties and obstacles inherent in their operationality;
- Explore ways and efficient financing solutions for the advent of effective decentralization.
Axes of dialogue
This public dialogue will be organized around three (3) axes.
Axis 1: What are the financing mechanisms for territorial decentralization? Does the General Code of Decentralized Territorial Collectivities innovate?
Axis 2: What are the practical difficulties inherent in the financing of decentralization? What are the obstacles to local taxation?
Axis 3: How to consider better financing of decentralization in Cameroon? What are the possible new financing avenues?
Organization and conduct of the dialogue
This Public Dialogue is organized by the Nkafu Policy Institute, Think Tank of the Denis & Lenora Foretia Foundation. This is an online event to be held on Wednesday, April 07, 2021 from 3:00 p.m. prompt and will last for 90 minutes. Led by a moderator, each panelist will present on the 03 different thematic for 15 minutes. Then, the phase of exchanges between participants and panelists will begin. This phase will last 30 minutes. (Register Here)