Ministry of Finance wants greater budget discipline – Congo Independent

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Emergency measures are foreseen. They relate in particular to financial management on a cash basis, reduction of certain expenditures and respect for the expenditure chain. The benefit of good planning of public expenditure is that it reduces unforeseen expenses, which are the root cause of waste of resources.

Gaston Mutamba Lukusa

in his Public Finance Note No. 002 of July 24, 2024The Ministry of Finance confirms that the state of public finances requires budgetary adjustment and good governance. The authors of the report say that urgent measures must be taken following the stagnation of budget revenues. They specifically concern financial management on a cash basis, the reduction of certain expenditures, respect for the spending chain and the gradual implementation of the transfer of salaries of state agents and civil servants, starting from October^th to avoid a massive injection of liquidity. According to the fiscal law for fiscal year 2024, total revenues are expected to be 40.986 billion francs, while expenditures are 40.986 billion francs. But as of July 22, cumulative public revenues amounted to 14.233 trillion francs, while the planned level in the cash flow plan was 13.342 trillion francs. Cumulative expenditures on the same day amounted to 13.708 trillion francs, while the forecast was 13.747 trillion francs. Therefore, the revenues collected only account for 34% of the amount planned in the state budget for fiscal year 2024, which will lead to a serious budget deficit if all planned expenditures are implemented. Austerity measures must be taken. Some non-essential expenses must be cut and management must be strengthened. This will make some people cringe, especially those who make a living by misappropriating budget allocations. Without this, the Swiss franc exchange rate will depreciate faster and inflation will accelerate. The coming months will be more difficult due to the low cobalt price and the fact that some mining companies have already prepaid taxes. As a result, mining revenues will fall in the second half of the year, and the survival of the country’s economy depends on the extractive industry.To complicate matters further, there are many outstanding bills for payments that we must continue to finance the war in the east of the country. It is noteworthy that measures were taken to clean up the situation of public finances and the economic environment at the meeting chaired by the Head of State on July 17, 2023. In addition to members of the Government, the meeting was attended by the President of the Economic and Social Council, the Minister of Finance, the President of the Congolese Business Federation and the President of the Congolese Banking Association. Since this meeting, tangible results are still awaited. Unfortunately, the more things change, the more they remain the same. The Court of Auditors has repeatedly denounced the fact that budget execution does not always comply with budget entries and procurement procedures. Unforeseen expenditures continue to occur, endangering economic growth and the fair sharing of social benefits. These unforeseen expenditures are used for the consumption of a privileged few and for investments that are often not economically profitable. The lack of any public expenditure planning, that is, the failure to fully implement the instructions and directives related to the execution of the state budget, must be punished. The benefit of good planning of public expenditures is to reduce unforeseen expenditures, which are the root of the waste of resources. Good planning must strengthen the role of the State at the expense of the interests of a few. It will enable the State to implement its policies for socio-economic development and improvement of the living conditions of the population. But such governance exists only if there is real political will for change.

Gaston Mutamba Lukusa