The Minister of Finance and Budget, Calixte Nganongo, presented, Wednesday 30 October 2019, to the Members of Parliament, the draft finance bill of the State for the 2020 financial year, which amounted to 2175 billion 384 million in revenue, and to 1679 billion 423 million FCFA in expenditure, generating a positive fiscal balance of 495 billion 961 million FCFA. 

 Calixte Nganongo said that this budget remains consistent with the programme's assumptions with the International Monetary Fund (IMF), with a particular focus on social spending.

This draft finance bill also provides resources and cash expenses set at 114 billion FCFA and 1045 billion FCFA respectively, generating a financing requirement of 931 billion FCFA.

Revenue from the general budget amounts to 2092 billion 962 million FCFA. Tax revenue, projected at 846 billion 634 million  FCFA, are up 2 per cent compared to 2019 and represent 40.45 per cent of fiscal revenue. They take into account the situation in 2019, after updating the data recorded and the progress on all revenue reforms. They are detailed as follows: 

• Internal taxes, including parafiscal charges, set at 714 billion 834 million FCFA;
• Customs duties and taxes set at 131 billion 800 million FCFA. 

The ordinary grants expected for a total of28 billion FCFA, are based exclusively on those identified in connexion with co-financed projects in progress and subject to the duly signed agreements.

The other revenue are projected at 1218 billion 328 million FCFA, in particular oil revenue, which are estimated at 1197 billion FCFA, down from 1137 billion 776 million FCFA in 2019, accounting for 57.19 per cent of fiscal revenue.

The assumptions underlying this level of oil revenue are as follows: the price per barrel of oil set at 55.2 US dollars, the exchange rate at 585 FCFA for 1 US dollar, and an annual output of 140 million barrels.

Expenditure in the general budget                           

This expenditure is estimated at 1597 billion FCFA. Current expenditure is forecast at 1251 billion FCFA, or 78.33 per cent of total expenditure in the general budget ; investment expenditure estimated at 346 billion FCFA. They account for 21.66 per cent of expenditure in the general budget.

This expenditure is as follows: 

• Debt financial charges: 105 billion FCFA;
• Central Government salaries and wages: 391 billion FCFA;
• Goods and services: 192 billion FCFA;
• Transfers: 515 billion FCFA;
• Other expenditure (formerly common charges): 48 billion FCFA;
• Investments: 346 billion FCFA.                           

The revenue from the supplementary budgets is estimated at 10 billion 016 million FCFA. They are as follows:

• Tax revenue: 3 billion 066 million FCFA;
• Other revenue: 6 billion 950 million FCFA.

Charges of supplementary budgets are estimated at 10 billion 016 million FCFA, to observe the balance with respect to revenue. 

Revenue from the special accounts of the Treasury is estimated at 72 billion 407 million FCFA. It is broken down as follows:

• Tax revenue: 14 billion 300 million FCFA;
• Social contributions are estimated at 54 billion 897 million FCFA of which the employers' share is 37 billion 295 million FCFA and the employees' share is 17 billion 602 million FCFA;
• Other revenue: 3 billion 210 million FCFA.

The special accounts of the Treasury total 72 billion 407 million CFA.

Fiscal balance

As regards the fiscal balance, since fiscal revenue is higher than fiscal expenditure, the result is a positive fiscal balance of 495 billion 962 million FCFA. This balance will help reduce the financing gap by 931 billion CFA, referred to above. There is thus a residual gap of 435 billion 038 million FCFA which will be financed through:

• Draws estimated at 154 billion FCFA as part of the IMF's fiscal supports and other financial partners;
• The restructuring of the external debt under negotiation;
• Possible loans for the part of the gap not covered.

The overall strategy to achieve the objectives set out

In order to achieve the objectives set, a comprehensive strategy was developed. First financial policy.

 In order to achieve the objectives of this policy, the government is relying on a number of measures broken down into three areas:

1. Reducing oil subsidy. This concerns both the Congolaise de raffinage (Congolese Refinery) -CORAF- and the Centrale électrique du Congo (Power plant of Congo) -CEC-, relying on the efforts to reduce the operating costs provided for in the performance agreement signed with the State;
2. Reducing tax expenditure by the withdrawals of exemptions for certain companies, following the work of the committee in charge of the control of tax advantages granted in the Establishment Agreements;
3. Strengthening fiscal transparency through the application of the gross product rule on the one hand, which calls for the accounting of all revenue and expenditure, including those levied upstream by oil companies under specific agreements, the limitation of payments through special procedures, on the other hand.

All these reforms will be implemented against the backdrop of a move towards a more efficient public financial management information system, which will reinforce the administrative reforms already underway, such as the interconnection of the financial departments. 

Second, the financing strategy.

 It is not limited to 2020 alone. It is in line with the objectives of the Programme with IMF, with requirements to be fulfiled for the various draws.

 First, there are pre-requisites, which to date have been completed prior to the conclusion of the Programme. Second, “there are the structural benchmarks” that complete the list of conditionalities.

 To this end, an organisation which involves the actors directly concerned by these measures, with a view to their continuous monitoring, was set up, the minister of Finance concluded.

As a reminder, due to the still fragile macroeconomic situation, characterized by persistent economic and financial deficits, the fiscal policy stance is as set out in the 2020-2022 Medium-Term Fiscal Framework (CBMT) discussed with the Parliament. This is characterised by a continuation of a prudent fiscal policy, focused on reducing non-oil primary deficit, through: 

• Improving non-oil revenue;
• Rationalising fiscal expenditure;
• Restoring the sustainability of the public debt, with a view to making it sustainable.

The analysis of the macroeconomic situation has projected a real gross domestic product (GDP) growth rate of 2.8 per cent 2020, up from 4.0 per cent in 2019. This decrease is explained by a decline in the GDP of te oil sector from 11.6 per cent in 2019 to 3.5 per cent in 2020, while that of the non-oil sector would experience a positive growth for the second consecutive year, but at a low level in 2019 with 0.8 per cent and 2.5 per cent in 2020.

The primary non-oil balance, the programme's main indicator, would increase from -24.8 per cent in 2019 to -21.6 per cent of non-oil GDP in 2020.

Note that since Congo has a bicameral Parliament, the Minister of Finance will present to the Senate, Thursday, October 31, 2019, the same draft State Budget for the 2020 financial year.  

The Press office of the Ministry of Finance