Considering that financing development from domestic resources can be more cost effective to a nation, there is urgent need to strengthen and mobilize the domestic resources of the Country. A more guaranteed source of domestic resources for financing development is through taxation.
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Mobilising domestic resources for sustainable development in cameroon is the current state of affairs good enough
1. MOBILISING DOMESTIC RESOURCES FOR SUSTAINABLE DEVELOPMENT IN
CAMEROON: IS THE CURRENT STATE OF AFFAIRS GOOD ENOUGH?
AUTHOR: SHILLIE PETER
1.0 INTRODUCTION
Cameroon is a middle income economy, targeting emergence by 2035, five years after the
attainment of the Sustainable Development Goals. To finance development in Cameroon, public,
private and foreign financial sources are available. Considering that financing development from
domestic resources can be more cost effective to a nation, there is urgent need to strengthen and
mobilize the domestic resources of the Country. A more guaranteed source of domestic resources
for financing development is through taxation.
1.1: WHAT IS THE CURRENT STATE OF AFFAIRS IN RELATION TO MOBILISING
DOMESTIC RESOURCES? – THE PROBLEM
The weak investment climate in Cameroon has rendered economic growth to be too slow and
according to the World Bank, Cameroon ranks 168 out of 183 economies (2011 Ease of Doing
Business Rankings) in the ease of doing business. This hinders the rate of investment. To make
things more disturbing, taxation, a source of mobilizing domestic resource that is needed to
finance development is still very problematic with unclear procedures. Past state investments in
the provision of public goods has been viewed generally by citizens to be disproportionate with
some regions feeling deprived of the national cake. With this unhappy mindset in a country
where the informal sector dominates, weak tax administration capacity, excessive tax incentives
for and tax evasion are very evident.
The call of the World Bank (2013), IMF (2013), on Cameroon to properly expand the tax base
and ensure tax reforms align with economic growth and social development seems to have been
plagued with a lot of insanity in the public service, with corruption dominating public business
such that today, a good number of former senior state officials are in jail for embezzlement
charges. A good number of people in Cameroon donot like to declare and pay their taxes. This
has negatively affected the potential for domestic resource mobilization.
2. Figure 1: CATTLE MOVED TO INACCESSABLE AND HILLY AREAS BY HERDERS
SO AS NOT TO PAY JAGALI TAX
Furthermore, development assistance for the past years has not been directed at investments that
can stimulate growth and thus expand the tax base. According to OECD/DAC (2013) the 5 year
average gross ODA disbursements by sector for the period spanning 2007 to 2011 shows that
Action relating to debt takes the giant average share of 452.33US$M, Education 89.57US$M,
Economic Infrastructure and Services 78.42US$M, Health and Population 72.21US$M, Program
Assistance 69.66US$M, Other Social Sectors 50.48US$M, Multisector/cross-cutting
40.83US$M, Production sectors 36.51US$M, unallocated/unspecified 26.76US$M,
Humanitarian Aid 12.34US$M and Administrative cost1.90US$M. It is evident thus that ODA
is more allocated to investment in consumption and not production.
More disturbing is the fact that the 2016 budget as has been the case with past budgets has a
significant proportion on debt servicing with more loans earmarked to be gotten from non-
3. domestic entities. Thus it is necessary to create a conducive sphere so as to guarantee domestic
mobilization of resources for financing development in Cameroon.
1.2 STAKEHOLDER (GOVERNMENT OR PRIVATE SECTOR) PARTICPATION –
THE COMPELLING REASONS
Considering that much still needs to be done in Cameroon regarding infrastructural development
like road network and the provision of social amenities, all, these which the government needs
finances to do, expanding the tax base is necessary as well as increasing production and
providing an enabling business environment is critical.. The private sector contributes the
greatest proportion of government revenue through taxation. By expanding the tax base implies
that many private sector enterprises will be taxed. Therefore, it is compelling for both the
government and the private sector to merge forces in fighting the ills inherent in mobilizing
domestic resources for financing development in Cameroon.
At the policy level, there seems to be a conception that the economic growth automatically
translate to social benefits (Pontus B., 2010). In this light with the emergence vision as a pull
factor, it is imperative for both the government and the private sector operators to consider
revising and developing strategies aimed at improving domestic resource mobilization in
Cameroon. Empirical studies carried out by Carree and Thurik (1999), Audretsch et al. (2002)
confirmed this conception showing that OECD countries exhibiting higher increases in
entrepreneurship also have experienced greater rates of growth and lower levels of
unemployment. This conception has proven to be false in the past years in Cameroon as the
gradual economic growth has been simultaneous with rising poverty and unemployment (Daniel
G. 2012). Can this be attributed to the fact that a significant portion of growth has been a
consequence of aid not thanks to mobilized domestic resources? This question thus makes it
important for the government to revisit issues related to domestic resource mobilization, seek
explanations to this phenomenon and suggest ways of reversing the relationship as Cameroon
gears towards emergence by 2035.
4. Figure 2: Location of a bar within private residences. such bars hardly pay taxes as they usually
pose as residence when the tax team is on the field
5. 1.3: WHAT THEN ARE THE MAIN OBSTACLES TO DOMESTIC RESOURCE
MOBILIZATION IN CAMEROON?
Conceptualization of obstacles to domestic resource mobilization in Cameroon
1.4: TARGET AUDIENCE
This artifact is for both the public and private sector operators. Public sector operators here are
municipal council authorities charged with making decisions especially related to raising revenue
and utilizing it for municipal development. Still with public sector operators, at the national level
this artifact is of interest to ministerial officials charged with drafting and enforcing taxation laws
Difficulty in mobilizing
sufficient domestic resources to
finance meaningful sustainable
development
Un-enabling business
environment to
motivate investment
High tax evasion
Weak tax
administration
mechanism
High corruption
High degree of
unconsciousness and
non-patriotism among
the citizens
6. and investment laws. The private sector audience is strictly investors and business operators who
need to know that by performing their civic responsibility of paying taxes, the government will
have resources to use to better the investment climate and business environment.
1.5 CONCLUSION
To present state of affairs in relation to mobilizing domestic resources to finance sustainable
development undermines the strategic vision of the country of being an emergent economy by
2035. With the projected double digit growth rate by 2017 (Growth and Employment Strategic
Paper) may be a dream not realized, and not realizing the dream indicates that the tax base has
not be broadened enough. Furthermore, not broadening the tax base limits the extent to which
domestic resources can be mobilized to finance development. Also, a serious and genuine change
in mindsets is needed so that citizens realized the need to declare and pay right taxes while at
same time state official make good use of the revenue collected through taxes and avoid
embezzlement. There is thus need for a paradigm shift at both the public sector and the private
sector.