Oil Wealth in Central Africa: Policies for Inclusive Growth by Bernardin Akitoby Sharmini Coorey

Author:Bernardin Akitoby, Sharmini Coorey
Language: eng
Format: epub
ISBN: 9781475549126
Publisher: Washington
Published: 2012-08-15T00:00:00+00:00

Ineffective Allocation of Public Resources

In addition to mismanaging the aggregate levels of public spending out of oil revenue, these countries have misallocated resources across different uses. The discretion allowed by opaque public expenditure management practices and the need to deal with various demands from fragmented political constituencies have led to striking discrepancies between stated development objectives and actual executed public spending. Two cases in point are Cameroon and Chad.

In Cameroon, budget discipline has not always been strong, contributing to poor practices in budget preparation and execution, and allowing political interference in the budget process. Overall, poor planning and preparation of the budget, and the lack of broad participation by line ministries in the process, has lead to weak ownership and acceptance of the budget. Despite multiple controls in budget execution, the controllers are neither empowered to do their jobs without outside interference nor held accountable, further reducing the efficiency of budget execution.

The social sectors, health and education in particular, along with agriculture and infrastructure, appear to constitute the pillars of the government’s investment strategy. The share of these four key sectors in the investment budget increased from about 42 percent in 2004 to about 68 percent in 2008. This expansion was driven mainly by the infrastructure sector, whose share more than doubled during these four years (from less than 20 percent in 2004 to more than 40 percent in 2008).

However, these priority sectors represented a much smaller share of the treasury’s actual payments, declining from about 44 percent in 2006 to about 30 percent in 2008 (Figure 6.7 and 6.8). This decrease may reflect the difficulty of implementing projects in key sectors or a shift in the government’s priorities between the planning and payment stages. The infrastructure sector again saw the biggest changes: it represented 45 percent of the planned investment outlays in 2008, but only 19 percent of the payments. None of the government’s priority sectors differed from this pattern.

Figure 6.7 Budget Allocation to Priority Sectors in Cameroon, 2004–08

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