Coming to Terms with Reality. Evaluation of the Belgian Debt Relief ...

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| 196 | Annexes Table 6 highlights the improvement in the current account balance, from a deficit of over 300 billion FCFA in 2004, to a surplus of 62 billion FCFA in 2006. The capital account remained positive after 2004, especially because of a decrease in the public debt transfers, and a slight increase in the private sector net inflows. Net foreign assets have been rising steadily since 1999. Starting from 1992 cumulated changes of net foreign assets amounted to nearly 500 billion FCFA by 2002 and to nearly 2,000 billion FCFA by 2008. The role of debt alleviation in this process, however, has been quite limited. 5.5 Public Finance We now turn to the effect of debt alleviation on public finance. Between 1996 and 2007 the share of interest payments in Government revenues has declined substantially. This can be explained first by the diminishing debt burden, and second by the increase in government revenues: Figure 18 Government Revenues, Expenditures and Fiscal Surplus, 1998-2008 Billions of CFA France 2500 2000 1500 1000 500 0 -500 Source: IMF 1998 1990' '2000 2001 Total Revenues (excluding privatization proceeds) 2002 Total Expenditures '2007(e) '2008(p) In figure 18 we present the evolution of Government revenues and expenditures between 1998 and 2008, and the fiscal surplus The country has had a budgetary surplus from the year 2000 onward (with the exception of the year 2005). This is mainly explained by the '2003 2004 2005 2006 Budgetary Surplus (if positive) Coming to Terms with Reality increasing oil revenues 105 . These revenues represented about 22% of total Government revenues in 2000 and went up to over 35% in 2007. For the sake of comparison, and to put the Government’s interest burden in perspective, we present in figure 19 the interest due on total public debt and the Government oil revenues between 1996 and 2008: Figure 19 Interest due on External Public Debt and Government Oil Revenues, 1996-2008: Percent (%) 1000 900 800 700 600 500 400 300 200 100 0 Source: IMF 1996 1997 1998 1999 2000 Oil Revenues Interest Expenditures due 2001 The oil revenues received by the Government doubled between 2004 and 2007, due to the increasing oil price combined with a slightly declining output. In the year 2007 these revenues represented about 630 billion FCFA, nearly twice as much as what the country received in interim debt relief under the HIPC Initiative between October 2000 and October 2006. Another way to put the oil revenues and interest payments in perspective is to analyze the difference between total and primary government expenditures and the difference between total government revenues with and without oil revenues. These variables are represented in figure 20. 105 For the year 2004, the fiscal deficit can be explained by a decrease in total grants and in the non-oil tax revenues. The oil revenues stayed nearly at their 2003 level. 2002 2003 2004 2005 2006 2007 (e) 2008 (p) | 197 |
| 198 | Annexes Figure 20 Total and Primary Government Expenditures (left) and Total Government Revenues with and without Oil (right), 1994-2008, billions of FCFA Billions of FCFA Billions of FCFA 2500 2000 1500 1000 500 0 2500 2000 1500 1000 500 0 1994 1994 1995 1996 1997 Source: IMF, Statistical Appendixes 1998 1999 2000 Total Expenditure Total Primary Expenditures 1995 1996 1997 1998 1999 2000 As figure 20 shows the HIPC Initiative, by decreasing the interest payments due by the Cameroonian Government, has translated into a decreasing difference between total and primary Government expenditure. The right hand side of the figure shows that in recent years the gap between Government revenues with and without oil has widened. Figure 21 represents the primary surplus (deficit) with and without oil revenues, and it shows us the importance of those revenues for the state: 2001 2001 2002 2002 2003 Total Revenues (excluding privatization proceeds) Total Revenues (excl privat. Procds. AND oil revenues) 2003 2004 2004 2005 2005 2006 2006 2007(1) 2007(1) 2008(p) 2008(p) 2009(p) Coming to Terms with Reality Figure 21 Primary Fiscal Deficit (+ = Surplus) with and without oil revenues, 1994- 2008, billions of FCFA: Billions of FCFA 600 400 200 0 -200 -400 -600 Source: IMF, Statistical Appendixes We conclude that the debt relief has contributed to a positive fiscal outcome. But as with the current account, the effect of the increasing oil price was by far more important than the HIPC debt relief. We now consider more specifically the government expenditure in the three main sectors highlighted by the PRSP, which are education, health and infrastructure. We present three pieces of evidence. First figure 22a shows public expenditures on education, health and infrastructure, as a percentage of total expenditures, for the years 1995, 2000 and 2004. We observe a steady growth in the share of health and education over the years and an increase of the share of infrastructure in the year 2004. We also notice the importance of the expenditures on education which represented more than 25% of total expenditures in 2004. Figure 22a Government Expenditures on Education, Health and Infrastructure, in percent of Total Public Expenditures, 1995, 2000 and 2004: Percentb of Total 30 25 20 15 10 5 0 1994 1995 1996 1997 Source: IMF, Country Reports 1998 1999 2000 2001 Primary Fiscal Balance (Oil Included) Education Part of Total (1995) 2002 Health 2003 Part of Total (2000) 2004 2005 2006 2007(e) Primary Fiscal Balance (Oil excluded) Infrastructure Part of Total (2004) 2008(p) 2009(p) | 199 |
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Main report Coming to Terms with Re
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1 Methodological approach of evalua
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Page 75 and 76: | 146 | Annexes Annex 3.1: Cash bal
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Page 85 and 86: | 166 | Annexes We started out on t
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Page 89 and 90: | 174 | Annexes 3 Debt Relief under
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Page 95 and 96: | 186 | Annexes 4 Efficiency of the
Page 97 and 98: | 190 | Annexes 4.4 Implementation
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Page 105 and 106: | 206 | Annexes 6 Impact on Economi
Page 107 and 108: | 210 | Annexes The 2004 survey rep
Page 109 and 110: | 214 | Annexes Figure 30 Debt serv
Page 111 and 112: | 218 | Annexes evolution is in lin
Page 113 and 114: | 222 | Annexes National Institute
Page 115: Published by: Kingdom of Belgium Fe
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