The International Monetary Fund (IMF) published a Report on the Observance of Standards and Codes (ROSC) dealing with Cameroon's Fiscal Transparency framework in 2000. At the time, the IMF found that Cameroon's legal framework was transparent to some degree, but that the system was too complex to be effective, and problems of enforcement further compromised transparency. In 2005, the IMF recommended that budget preparation and execution be more closely linked with both the Poverty Reduction Strategy and the objectives of the Medium Term Expenditure Framework. Fiscal policy transparency could be further enhanced by restructuring and privatizing the more loss-prone public enterprises.

General Overview

The most recent International Monetary Fund (IMF) Report on the Observance of Standards and Codes (ROSC) for Fiscal Transparency was published in 2000. At that time, the IMF found that Cameroon's legal framework addresses some criteria of transparency, but ultimately judged it to be "unable to comply with the Code of Good Practices on Fiscal Transparency" due to the overall complexity of the fiscal management system, its ineffectiveness, and enforcement inadequacies. The ROSC noted that the Cameroonian authorities had expressed a commitment to produce regular reports on the government's financial activities, including independent audit reports and reports on budget execution by the major ministries. In addition to these actions, the IMF recommended that the legal framework governing fiscal activities be simplified and government involvement in the economy be scaled back. It also called for more public dissemination of fiscal-policy related information, including relevant legislation, the annual budget bill and its execution, and explanations of policy and the macroeconomic framework underlying it, as well as enhancing fiscal management and controls. In a 2005 Article IV Consultation report, the IMF further recommended that budget preparation and execution be more closely linked with both the Poverty Reduction Strategy and the objectives of the Medium Term Expenditure Framework. Fiscal policy transparency could be further enhanced by restructuring and privatizing the more loss-prone public enterprises.

Writing for the International Budget Project's Open Budget Initiative (OBI), N. Memfih assessed Cameroon's budget process openness as "minimal," with a score of 29 percent. The OBI rates countries according to their production of seven budget documents, the public availability of those documents, and the quality of information presented therein. Cameroon produces five of the seven documents (Pre-budget Statement, Executive's Budget Proposal, In-Year Reports, Mid-Year review, and Year-End Report), but does not release the In-Year or Year-End Reports publicly. It does not produce two other reports deemed necessary by the OBI: a Citizen's Budget or an Auditor's Report. The most important document of the seven, according to the OBI, is the Executive's Budget Proposal, and the Cameroon document scores 41% in terms of the quality of information provided therein. The Mid-Year Review is judged to contain only minimal information.

In a 2003 Letter of Intent and Memorandum of Understanding (MoU) to the IMF, Cameroonian officials claimed that they had achieved real progress in the fiscal area. One such reform was the adoption of a general tax code, along with the institution of a taxpayer's unit. Another area of improvement was the implementation of new internal controls to enhance the transparency of public expenditures. This included legislative reform that more explicitly laid out the roles, responsibilities, and functions of the Chambre des Comptes, which is the external audit agency for government finances. The government also reaffirmed that it would move forward with the privatization program along lines worked out with the assistance of the World Bank. Additionally, the MoU affirmed a continued commitment to expand and improve its data coverage, quality, and timeliness. It requested IMF technical assistance in developing a more appropriate methodological approach to the compilation of national accounts data. The aim was to develop a new official national accounts data series that would be more useful in formulating economic programs and a long-term macroeconomic framework for the Poverty Reduction and Growth Facility.

Cameroon does not subscribe to the IMF's Special Data Dissemination Standard (SDDS), but participates in the less rigorous General Data Dissemination System (GDDS). The Director of the National Statistics Institute (INS) serves as the GDDS coordinator. Cameroon made available to the GDDS its metadata on all the requisite datasets at the time of first participation, in 2001.

The Principles

Clarity of roles and responsibilities.

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The IMF's 2000 ROSC reported that the Cameroonian Constitution governs the allocation of roles, responsibilities, and powers across the central and local government units, and finds that these "are well defined in procedural terms." The ROSC also found that "financial relations between the central government and the regional central bank (BEAC) are clearly defined." Less transparent, however, are the relationships obtaining between the central government and such public enterprises as the Social Security Company (CNPS). These relationships need to be made more transparent and their autonomy should be strengthened. Regulatory enforcement was also judged insufficient, with particular problems noted in the financial relationships obtaining between the central and local governments. The ROSC also found problems with control procedures for government financial operations (especially with regard to appropriations), and called for the imposition of penalties for regulatory violations.

Legislation calls for the annual production of operating accounts by all levels of government and by administrative public agencies, but the ROSC notes that these are often delayed and lacking in sufficient detail. A notable example of this is the accounts of the CNPS. The ROSC noted that Cameroon's highly complex legal environment and bureaucracy tend to encourage government interventions in the economy. The ROSC adds that delays in the execution of projects covered by the public investment budget can be attributed to a number of factors, including "institutional constraints, a lack of sectoral strategies (leading to poor project design), as well as cumbersome procedures."

Open budget processes

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Writing for the International Budget Project's Open Budget Initiative (OBI), N. Memfih assessed Cameroon's budget process openness as "minimal," with a score of 29 percent. The OBI rates countries according to their production of seven budget documents, the public availability of those documents, and the quality of information presented therein. Cameroon produces five of the seven documents (Pre-budget Statement, Executive's Budget Proposal, In-Year Reports, Mid-Year review, and Year-End Report), but does not release the In-Year or Year-End Reports publicly. It does not produce two other reports deemed necessary by the OBI: a Citizen's Budget or an Auditor's Report. The most important document of the seven, according to the OBI, is the Executive's Budget Proposal, and the Cameroon document scores 41% in terms of the quality of information provided therein. The Mid-Year Review is judged to contain only minimal information.

In its 2005 review for the Three-Year Arrangement under the Poverty Reduction and Growth Facility the IMF called for a closer link among the medium-term expenditure framework, the Poverty Reduction strategy and the budget preparation and execution processes. The IMF also suggested that loss-making public enterprises should undergo restructuring and privatization. At the time, Cameroon was working with the World Bank to develop its medium-term expenditure framework. The Article IV Consultations report of the same year suggested that the monitoring of budget execution could be enhanced by making improvements in data management. To do this, the Cameroon government planned to broaden its use of the SIGEFI system, which is Cameroon's integrated financial management system. The report adds that "in line with the recommendations of the December 2004 FAD technical assistance mission on fiscal data management and building on SIGEFI, the Government will accelerate the preparation of fiscal reports by compiling a preliminary version of the Treasury balances no later than 3 weeks after the reporting month" (p. 43).

The 2000 IMF ROSC describes the budget process as beginning with the submission of a draft budget law along with explanatory materials covering the economic context and governing policy. The ROSC found that these explanatory materials (in the form of an economic and financial report), needed to more effectively present the macroeconomic framework, taking into consideration the medium-term outlook. According to the ROSC, "new tax measures and budgetary allocations are clearly specified, and each budget law makes provision for using ordnances to correct any fiscal risks." While the ROSC noted that revenues and expenditures are distinguished from financing operations, and administrative categories are used to differentiation among expenditures, it found that "economic and functional classifications are insufficient and overly broad." The ROSC also noted that a new, integrated accrual-based accounting framework was being introduced that would enhance comprehensiveness of reporting and would expand the coverage of central government financial operations. This is being done in conjunction with the Poverty Reduction and Growth Facility program. The ROSC added that Decree No. 95/101 of 1994 regulates government procurement activities. Procurement procedures are subject to audit. Controls on spending were judged insufficiently efficient. Budget oversight could also be improved. The ROSC noted that monitoring of central government financial operations was achieved by the use of a monthly "performance indicators table," but identified deficiencies in comprehensiveness of these tables. These were being addressed at the time of the ROSC report.

Public availability of information.

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Writing for the International Budget Project's Open Budget Initiative (OBI), N. Memfih assessed Cameroon's budget process openness as "minimal," with a score of 29 percent. The OBI rates countries according to their production of seven budget documents, the public availability of those documents, and the quality of information presented therein. Cameroon produces five of the seven documents (Pre-budget Statement, Executive's Budget Proposal, In-Year Reports, Mid-Year review, and Year-End Report), but does not release the In-Year or Year-End Reports publicly. It does not produce two other reports deemed necessary by the OBI: a Citizen's Budget or an Auditor's Report. The most important document of the seven, according to the OBI, is the Executive's Budget Proposal, and the Cameroon document scores 41% in terms of the quality of information provided therein. The Mid-Year Review is judged to contain only minimal information.

Cameroon does not subscribe to the IMF's SDDS, but participates in the less rigorous GDDS. The Director of the National Statistics Institute (INS) serves as the GDDS coordinator. Cameroon made available to the GDDS its metadata on all the requisite datasets at the time of first participation, in 2001.

Independent assurances of integrity.

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The 2000 IMF ROSC reports that the 1962 ordinance mandated the creation of the Cour des Comptes, Cameroon's independent central audit office, which was tasked with verifying "the transparency and thoroughness of government accounts." The actual establishment of this office was delayed until the promulgation of the 1996 Constitution, and came into being gradually, over the course of a larger fiscal reform program. Officials were considering increasing the staff of the Statistics Directorate, and legislatively enhancing its independence from the Ministry of Economy and Finance, to which the directorate reports. The ROSC noted that Cameroon was regularly transmitting its macroeconomic forecasts and financial assumptions to the Fund. Finally, the IMF's GDDS website discloses that Cameroon has been a participant since December 2000.