The Unbaised Economists Perspective on Government Policy Cuting Back on Fuel Subsidies

By Ateh Thomson Pepeah (Political Economist)

Ateh Thomson Pepeah

Since 2009, the government has worked harder towards accomplishment of her 2035 vision. Heavy projects have been initiated cooperation between the country and foreign governments, and lobbies for sound partnerships have been fruitful. However,growth rates have been sluggish, even with minimal inflation rates. Following international pressure on the need to cut back on fuel subsidies, the government of Cameroon  on June 30, 2014.eventually considered this decision.

Under strict economist perspectives, a cut back on fuels subsidies will imply a positive and negative effect to the Cameroonian economy.The Problem lies on which of these effects is more stronger.

Several empirical studies have indicated a significant negative relationship between subsidy removal and poverty reduction within various economies. In Cameroon, it is  important to recall that subsidies fall undercurrent expenditures which benefits the now only and effects, very short leaved. Creating more fiscal space by cutting back on fuel subsidies therefore can lead to spending reallocation towards capital investment on infrastructure,health care, and education etc in the long run.

Consider for instance the Balance of Payment situation (BOP): My clairvoyance reveals that a cut back in subsidies pushes up product cost and brings about a visible long run reduction in domestic demand (Cameroonians prefer trekking and car owners public transport). This extra fuel may then accumulate for the international markets which subsequently improves the Balance of payment situation but the TOT--Terms of Trade becomes favorable too. Revenue from international trade in extras from petrol--everything being equal then swell the national income of the country.

According to the world bank report, subsidies are said to only benefit the richest 10% of the population . They  stated that massive fuel subsidies reduces fiscal space such that government have fewer sources to promote economic growth through investment in infrastructure or human capital. That definitely worsens income distribution in thecountry because most of the fuel subsidies are enjoyed by the non poor,rather than by poor groups.Concretely this imbalance should be address by such a solution with reallocation towards more productive sectors.

However, these reallocation policies might not be effective to compensate the adverse impacts of the percentage removal of fuel subsidies if economic agents try to seek gain through mark-up pricing over the increase of production costs. Pumping stations all around towns have now added an inexplicable 50frs to the final cost of fuel and this is dangerous because it rather motivates resistance to such policy reforms.

On a General note, this decrease in fuel subsidies will be followed by a decrease in macro-economic indicators, such as private consumption, import s and gross domestic product (GDP), while other indicators, net indirect tax and consumer Price index (CPI) will increase. On a more technical bases adjustment effects, which result from real wage, price and structural rigidities in the economy, add to the direct income effect. Higher oil prices inevitably lead to inflation,increased input costs, reduced non-oil demand and reduces the attractiveness of the investment climate. Tax revenues  tend to fall and the budget deficit increases, due to rigidities in government expenditure, which drives interest rates up. Because of resistance to real declines in wages, an oil price increase typically leads to upward pressure on nominal wage levels. Wage pressures together with reduced demand tend to lead to higher unemployment, at least in the short term. These effects are greater the more sudden and the more pronounced the price increase and are magnified by the impact of higher prices on consumer and business confidence. If not properly contended through non-violent government economic and social responds measures, Violence becomes inevitable in the near future.

  

In many countries like, the Philippine  etc, fuel subsidy removal despite relative government struggle came with some rational attached to their argument. Firstly, their oil fields as attested were becoming more and more empty—the natural resource was getting exhausted. Secondly, they were little alternatives to depend on than becoming net importers of oil. As such subsidy removal and refocusing on other avenues that equilibrate   living standards and welfare of consumers became the best alternative .

In Cameroon however, production and refinery capacity seems to have stagnated not as a result of the absent of oil wells but due to lack of investment in exploring new oilfields and declining production from maturing fields. I hold the view that several other wells still exist in the Country but have not been identified. This if taken seriously would increase production given the rapid growth in consumption. In addition,an increase in the middle class population also put pressure on fuel demands. More and more youths are gaining access to cars, or getting involved in productions that entail the use of fuel in Cameroon .These figures imply that even if all the available domestic crude oil were refined in Cameroon, it might not still meet the need of Cameroonians faced with an apparent youth bulge . Therefor investment in exploring new oilfields should be given a priority.

Again the fuel allocation of administrators should be drastically reduced. It will not be just having an office with very limited mobility yet being allocated over 922millionFCFA for fuel alone while the common man bears the entire burden. These reforms should be made known to Cameroonians and the total about secured be channeled with full explanations towards capital investments  which enhances growth.

More especially, the government should implement—not promise–compensation programmes to mitigate the obvious effect of subsidy removal. This programme might included cash transfer, health insurance, education subsidies and also rural infrastructures development. In the Philippine in 2008 for instance after cutbacks on subsidies, the Government launched a package of pro-poor spending programs that were financed by windfall VAT revenue from high oil prices. The policy package included electricity subsidies for indigent families, college scholarships for low-income students, and subsidized loans to farmers that reduced their cost relatively. In addition, the Government distributed subsidized rice to low-income families and started a conditional cash transfer program. The option went well and was successful. In Cameroon the situation is delicate, not only fuel prices but cooking gas prices have sore. This heavily affects house wholes and the majority student population—youths for that matters. If the Cameroon government can actually adapt this measures, it is possible, this policy would go through without major hitches. This should urgently be done before trade unions all around the country finalize their discussions and plans concerning the weeks ahead.

Effective communication to the general public is an eminent requirement to avoid misgivings that might transform in to political instability.The Philippine government used this amongst other measures in their case and it did worked for them in 2008.In Cameroon, this will go peacefully only if deliberations in parliament by parliamentarians validate such a pertinent policy with major impact on the lives in their constituencies. So because, as at now, such a defactor decision is unlawful for a law abiding country that Cameroon should be.

In 2012, i wrote thus......."As an indispensable catalyst within various sectors of pertinence in affecting country prosperity , it holds therefore that no alterations of this sector_( Transport) transmitted through increasing fuel prices goes without kickbacks effects to the entire economy. Enough reasons why governments should gauge economic policy in tandem to the countries stage of development and corresponding welfare levels therein before effecting such weighty adjustments. Without this, any other endeavor only comes to challenging the initial essence of such policies. Fuel subsidies for sure were intended to reduce the cost burden on Cameroonians given government judgement at previous, that citizens couldn't bare the entire cost and maintain a decent living standard. The point was on welfare and how to better the same. If today, a cut back on such subsidies (more than previous,) greatly dampens welfare, then government must have challenged the essence of the same policy. Perhaps, the economy might just need a little more time before getting ready for such policies. This gauging must come from within the country, not otherwise. for what worked else where must not necessarily be the case with Cameroon(consider the Structural Adjustment programs--SAPs).... Here we are!!!

I strongly belief,Cameroonians are not cowards. If fighting, they fight for a just course, if striking, it is just their rights they sick protection of. Can the government proposes to the general public a more Specific, Measurable, Attainable,  Realistic, and Time bound compensation and mitigation plan?

God Bless Cameroon!!!

Ateh Thomson Pepeah
Hon. Attempted; MezameCentral Const.

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

Where is MINMAP Delegate for Donga Mantung?

Tongues are waging in Nkambe, Divisional Headquarters of Donga Mantung following a communiqué issued by the Senior Divisional Officer, Ngone Ndodemesape Bernard calling on the Divisional Delegate of Public Contracts-MINMAP, Chin Emmanuel to resume his post with immediate effect. Fear and consternation is reported to have gripped stakeholders and vote-holders when the communiqué was aired on local radio stations. Reports say the where-about of the Divisional Delegate became a topic of discussion in “sha” and “nfiang” drinking spots as well as drinking parlours giving that he was more of a visiting delegate than resident. Yet it is alleged that those who are closer to him know MINMAP Delegate as someone who visits his office once in a blue moon and or is spotted only when he has pressing issues to handle (note contractors, et cetera). It is feared that the execution of Public Investment Budget-PIB in Donga Mantung is likely to be the lowest nationwide. Last year, Donga Mantung was ranked as the lowest in the North West Region, a situation that has sparked worry amongst the populace. Allegations are rife some beneficiary communities were threatening to move to the streets to express their disgust. Yet, the depending doom was rescued by the communiqué by Donga Mantung SDO. However, classified source say Chin Emmanuel was spotted in Nkambe yesterday. When contacted, the SDO confirmed that the Divisional Delegate regained his office yesterday Thursday July 3^rd. Notwithstanding, a school of thought holds that there is a tussle of interest as to who should award contracts. 

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

Anti Corruption Commission (CONAC) Wrapped in Corrupt Scandal

(I’m questioning everything else)

Rev. Dieudonne Massi Gam: Guilty or Not?

 The Cameroon Anti- Corruption Commission-CONAC, a one-time enviable structure created by government to combat white-collar economic gangsters is wallowing in the gutter of corrupt practices. Panic is reported at CONAC head office in Yaounde over what observers say is the beginning of the end of a long established corrupt in-house network which has chopped it foundation silently for years. Not only are Cameroonians expecting heads to roll but above, public opinion is requesting that all that the entire staff and management should be dismissed.

The fêted Chinua Achebe once likened the world to mask. But with the present conspiracy at CONAC, Cameroonians have contextualize it by adding that the world is not only a mask but some sort of mystery that if you want to see it well, you shouldn’t stand on one spot.

When CONAC was created, everyone around it wanted to be seen as an exceptional replica in the fight against corruption. Some of them, including the clergies transformed selves over nights to demi-gods behaving like people who have never deep hands into their mother’s soup at prime age. Yet recent happenings have proven that it was a make-belief to rig the country of its resources. Seemingly, they were goats in sheep skins. To understand, it is crucial to scrutinize how people function with different people in different circumstances. Dieudonne Massi Gam is the head of the Government anti-corruption Commission-CONAC and at the same time he is a Board Member of Elections Cameroon-ELECAM. The question as to whether Rev. Dieudonne Massi Gam is not benefiting from two salaries abound high. But that is not the main worry for now. The worry is that this structure which was created to clean Cameroon of the mess of corrupt practices is seemingly the most corrupt.   

 In fact, Aristotle is considered one of the most luminous thinkers of all times, given that he had one hypothesis which made the intellectual community very uncomfortable. He believed that if two different weights of the same material were dropped from the same height they will fall at different speeds. The weight of the Supreme State Audit seems to be more than that of CONAC when it concern auditing. The question is: What is CONAC panicking and why is Dieudonne Massi Gam shivering when Supreme State Audit auditors came in to check the management of resource at CONAC? Was CONAC preaching virtue and practicing vice? In fact, that is why I am questioning everything.

CONAC has been a nightmare to corrupt Cameroonians. Many have used just the name to enrich themselves, others have flown out of the country when told CONAC was about to visit them and now it seem many have enrich themselves fraudulently by putting their hands deep into the resources destined to combat corruption.

The issue is that the hunter is now the hunted. Allegations are rife at that the Supreme State Audit is about to uncover the mighty corruption practices at CONAC. Newspaper reports say salaries of some workers at CONAC secretariat have been held for obvious reasons. Did they stretch hands deep into the coffers to collect what was not for them? If yes, how much have been stolen? The question is whether this is not embezzlement. If it is not, what do we call such an act? Can Reverend Dieudonne Massi Gam give a clear balance sheet on the expenses of resources allocated from state coffers to this structure? These are the multi- million FCFA questions that Cameroonians are expecting Massi Gam give convincing answers.

The Bible teaches us that the prodigal son was received with enthusiasm by his father, but there is no indication in the Bible, that he was later treated with more trust and reverence than his eldest brother who stayed by his father, the fatted calf was not slaughtered for him on a daily basis or even after the reception. The Supreme State Audit has a role and it is only her scrutiny that will expose how CONAC has been transformed into a sinkhole of taxpayers’ money? No police interrogation, many have observed given that CONAC is expected to serve as a model for others to copy.

Every human being is pushy, but when ambitions is unchecked, like the one exhibited at CONAC in the management of funds allocated to them to fight corruption; it cannot but preface a crash. Alas, natural blindness of mockery to or for power is always short of the instincts that power corrupts and absolute power corrupts absolutely. Pitiable that Rev. Dieudonne Massi Gam is one of the “clergies” who passes for anything and everything in world but quickly finds fault in everyone. What explains that he has decided to hold the salary of some workers for the month of June? Is the Man of God trying to play the ostrich before Supreme Audit Report unveils the malpractices in the structure which he heads?

It is often said in English that you can be hanged for a lamb as well for a sheep. The assumption is that you stole the lamb because there was no access to the sheep. But the nature of man remains a mystery, Thomas Hubbs also puts it.  Now that CONAC is being wrapped in a corruption saga, it is clear that some human beings have proven that God must be a composite creature who is able to fulfill his mission of creation in diverse manners without making a mistake. And if God made man in his image, then I find fault in the state not punishing CONAC thieves. Chief Nangah one of the characters in Man of the people used the term ungrateful ingrate to described Odile. Such is the trust that Cameroonians gave to Rev. Massi Gam and his crew at CONAC. 

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

Star for a Day: Eto’o’s Ex Girlfriend Beats Record

Tongues are still waging in Yaounde over the controversy surrounding Samuel Eto’o and his former girlfriend, Nathalie Koah. "Traffic Jam" there was at the time Martinez Zogo just ended her interview which was live over a local radio, Amplitude FM.

Nathalie Koah

The crowd of onlookers clumped near to arouse the curiosity of passersby. "She's already out?", "She even where" "I also want to see how she looks like the girl", many said.  Moments later, a young man, the little brother of Nathalie Koah, wearing a set Jeans: breeches and shirt, matched with a cap, above the long-awaited lady. The "Nathalie" appears. She wears close-fitting black pants, rolled up at the ankles, a senior wide bicolor, black and white, with low shoes moccasin style. She wears boyish, her short hair are veneered back and let her discover clear neck like the rest of his body. She also wears a pair of glasses a little too big for her delicate face which blends with the handbag she was clinging to her arm. Bloggers and facebookers could be seen opening their laptops to be able to capture an image.

From a far distant, some onlookers who have been there for close to an hour could be seen running to see her, while others were scrambling to get a better visibility. Despite the excitement of the crowd and the questions that burst from either side, the 27 years old girl managed to clear a path to meet the driver who is waiting nearby. Away, Nathalie Koah leaves behind a barrage of questions from the inhabitants of Elig-Essono. Her meeting with the captain of the Indomitable Lions to accusations made against her today, everyone has his/her comment.

(Up next: What Nathalie told Amplitude FM)

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

CamCCUL Resolves to Check the Phenomenon of Money Laundering, Terrorism, Others

The Annual General Meeting of the Cameroon Cooperative Credit Union League-CamCCUL LTD holding in Bamenda at the Pastoral Center, Up-Station this 28^th Day of June, 2014, having discussed and deliberated on various issues featuring on the Agenda, hereby adopts the following resolutions.

1)    The various reports as presented are discussed and amended including the appropriation of the financial results for the year ended 31^st December 2013, the 2014 operational and investment (CAPITAL) budgets are hereby adopted. Quitos is thus given to the Boards, Management and Auditors on the said reports and their implementation.

2)    The CamCCUL network thanks H.E the minister of Finance and the Government of Cameroon for laudable efforts of the Director General of Taxes to resolve burning tax issues related to our sector. We again humbly appeal to government to create a specific and simplified tax regime for microfinance institutions. Management should ensure that Tax seminars and trainings are envisaged in 2014 going forward.

3)    In view of the urgent need to reorganize the CamCCUL network, from the affiliates through the chapters to the Apex organ, in line with current realities of membership, volume of transactions, financial weight of credit unions, geographical and compliance considerations, the Board of Directors (BoD) and Management of CamCCUL are mandated to fine tune a new organigram and putting in place a five year development plan (2015-2020) with the help of experts assistance.

4)    An Ad Hoc Strategic Reflection Committee is hereby created and placed under CamCCUL BoD whose assignments amongst others will be to reflect  on the five years development plan, the organogram, facilitate in the review of the various policies and also to act as Think Tank on various other important issues affecting the CamCCUL network.

5)    Following the growing delinquency in the CamCCUL network, the BoD and Management are mandated to take urgent measures to put in place new recovery strategies to curb delinquency in the CamCCUL network using available resources at their disposal. They are also required to organize more recovery sensitization and workshops within the CamCCUL Network.

6)    The delegates positively appreciated the finished work of the CamCCUL building at the Bamenda Commercial Avenue and urge Management of CamCCUL to take all necessary measures to get electricity and its accessories connected into the building to make the same fully habitable.

7)    The Board of Directors and Management are mandated to urgently ensure the restructuring/revision of some key policies of the network, notably in the domain of lending and recovery, the Internal Rules and Regulations, money laundering and fight against terrorism and risk management. In this vein and following the resolutions of the G37 meeting in Bafoussam in 2012, risk management rates are reduced down from 80 to 65 per one thousand.

8)    The CamCCUL network takes cognizance of the recent COBAC conditional approval for the entry of a new investor from South Africa into the capital and management of UBC. CamCCUL BoD is mandated to continue to negotiate with other shareholders/stakeholders of the bank, the new investor, COBAC, MINFI and other administrative authorities, taking necessary measures to protect the bank and our investments.

9)    Credit unions are encouraged to participate in the relevant international and national conferences especially those organized by WOCCU, PROXFIN, ACCOSCA etc and to sensitize their members and take adequate measures to participate massively during celebrations marking International Credit Union Day and other such events locally. It was resolved that the International Credit Union Day be celebrated this year in Bafoussam.

10) The CamCCUL network is appreciative of the kind gesture from our various partners, including SOWEDA, ADPAM, the German International cooperation(Giz), MINEPAT, CAT-CAMEROON, PADMIR, the AGRIFIN INITIATIVE and the Belgian Raffeisson Foundation (BRS) who have in the last few years supported CamCCUL intellectually, financially, materially and otherwise, to the upgrading of its internal processes.

11) The CamCCUL Board of Directors and Management are instructed to ensure that the necessary corrective measures recommended by the last COBAC controls are implemented in the entire network with emphasis on the network discipline as contained in CEMAC/UMAC/COBAC regulations on microfinance activities

12) The recommendations in the audit report of CamCCUL and the credit unions on issues and irregularities identified by the COBAC control and CamCCUL audits should be strictly followed up in order to ensure the proper functioning of the CamCCUL network.

13) The delegates take recognizance of the numerous applications presented for the affiliation into the CamCCUL network and mandates the BoD and Management to follow up these in line with the applicable procedures of CamCCUL. On the issue of disaffiliation, members resolve and reiterate that credit unions wishing to withdraw their membership should do so in strict respect of the various regulatory and statutory provisions and in particular the instructionof H.E The Minister of Finance vis-avis the disposition of the CEMAC/UMAC/COBAC regulations on microfinance activities.

14) In order to mitigate the various risks encountered by CamCCUL and its affiliates in the various aspect of their operations, the BoD should constitute a risk mitigation committee at CamCCUL and at the level of its affiliations, to help mitigate these risks.  

15) CamCCUL should lead a delegation to meet with mamangement of CDC in a bid to resolve the issue of non-payment of Receivables to CamCCUL affiliates.

16) Validates the election of Mr. Fongu Julius Atanga, President of Bayelle Cooperative Credit Union by the Bamenda Chapter in replacement of the vacancy in the Supervisory Board of CamCCUL.

17) Members note with dismay, acts of insecurity and organized blackmail against CamCCUL , its credit unions and officials. The BoD, Management and the Strategic Reflection Committee are hereby mandated to take all necessary legal and other actions against such individuals and their sponsors.

Done in Bamenda this 28^th day of June 2014

Sign:

Secretaries: Fombin Raphael,  Nzoupet Lemou Merlin

Scrutinners: Nzegge Joseph,   Guietang Bernard,  Nello Francios

Chapter Representatives: Bamenda, Fako, Kumba, Douala, Fundong, Kumbo, Nkambe, Mamfe, Bafoussam, Garoua

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

AtLast FECAFOOT Chairman of Normalization Committee Speaks

Recent allegations of fraud around Cameroon 2014 FIFA World Cup three preliminary games, especially Cameroon vs. Croatia, as well of "the existence of seven bad apples" in our national team, do not reflect the values and principles promoted by our administration, in line with FIFA Code of Conduct and the ethics of our nation.

We wish to inform the general public that, though not yet contacted by FIFA in regards to this affair, our administration has already instructed its Ethics Committee, to further investigate these accusations. We are strongly committed to employ all means necessary to resolve this disruptive matter in the shortest delays.

In the meantime we legitimately request that any related information, unless brought before our federation and/or its Ethics Committee, be held for or treated as mere assumption.

We wish to reinstate that in fifty-five (55) years of existence, FECAFOOT has never been sanctioned for, involved in, or even linked to match fixing or any fraud of any kind. 

Yaounde, 30 June 2014
PRESIDENT
NORMALISATION COMMITTEE
JOSEPH OWONA

 

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

Scores Feared Death in Maiduguri Bomb Blast

Scores of people are feared death in the rubbles of an explosion that took place in a market in

Maiduguri, Nigeria. Reports say the car bomb explosion at the central market, in Maiduguri, today, Tuesday, July 1, 2014 is suspected to be the handiwork of the Islamic Extremist group, Boko Haram. Boko Haram, the Islamic extremist group whose birthplace is Maiduguri and which is accused of a series of recent bomb attacks and the abduction of 276 Chibok school girls. Eye witness say the bomb reduced the entire market place into dust. Cars, market sheds and other items have been shattered around allegation abounds.

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)

Boko Haram Leader “Babuji Ya’ari Involved in Chibok Girls Abduction Arrested

Nigeria's military said Monday it had broken up a Boko Haram intelligence cell and arrested its leader, alleged to have taken part in the abduction of over 200 teenage girls in April.

A defence headquarters statement said that troops have found a militants' 'intelligence cell' headed by a businessman "who participated actively in the abduction of school girls in Chibok," in northeast Borno state last April 14.

Of the 276 girls abducted, 57 have been found while 219 are still missing.

The businessman identified as Babuji Ya’ari, who was also a member of a civilian youth group that worked along with the military, popularly known as Civilian JTF (Joint Task Force), allegedly used his position as a cover to work for the militants, it said.

"The arrest of the businessman who is known to deal in tricycles has also yielded some vital information and facilitated the arrest of other members of the terrorists’ intelligence cell who are women," the military said.

The statement accused the suspect of spying for the Islamists as well as spearheading the murder of Emir of Gwoza in Borno state a month ago.

A grab made on May 5, 2014 from a video obtained by AFP shows the leader of the Islamist extremist g …

He has been coordinating several deadly attacks in Maiduguri since 2011, including the attacks on customs and military locations in the town, a hotbed of the sect, it said.

There is no independent confirmation of the military claim.

Boko Haram Islamists are blamed for killing thousands since 2009, but the first half of this year has been the bloodiest stretch of the insurgency, with more than 2,000 people killed.

An attack on churches on Sunday near Chibok blamed on Boko Haram gunmen killed 54 people, an official has said.

They hurled explosives into churches, torched buildings and fired on worshippers as they tried to flee, residents said.

 

When News Breaks Out, We Break In. (The 2014 Bloggies Finalist)