The National Hydrocarbons Corporation (SNH) has said that Cameroon’s crude oil revenue would drop by 70 per cent in 2020 due to the negative effects of COVID-19 on the petroleum sector.
And the company has informed the government that because of these adverse trends, the SNH can only guarantee a contribution of 30 per cent of its quota to the national budget.
Unimpeachable sources at SNH which elected for anonymity because of protocol restrictions told HumAngle on Monday night in Yaounde that with this drastic drop in the contribution of petroleum to the national budget, it was almost certain the 2020 budgetary provisions would be reviewed downwards during the June session of the National Assembly.
“Even if petroleum revenue includes taxes usually imposed on petroleum exploiting companies which is directly collected by the fiscal administration, this would only slightly influence the global envelope of the said revenue, taking into account the largely very important SNH royalties. These include revenue from the exportation of crude oil and locally produced natural gaz”, the SNH source revealed.
In concrete terms, of the 443 billion FCFA (886 million dollars) oil revenue budgeted in the 2020 finance law which was voted by the National Assembly in November, 2019, the national treasury could finally register only about 130 billion FCFA (260 million dollars) based on the last previsions being studied by government.
This adverse development is not completely unexpected because the fear of diminished income had been looming since the advent of the COVID-19 pandemic.
“We already knew that we had nefarious consequences on our budgets. As concerns Cameroon, we have made some evaluations which merit being fine-tuned. If I take the case of petrol, we drafted our 2020 finance law on a hypothesis of 54.4 dollars per barrel of crude. Right now, we are at less than 30 dollars per barrel.
“You should understand the consequence of this disparity is immediate,” Cameroon’s Minister of Finance, Louis Paul Motaze, hinted on March 28, 2020, during the 3rd extraordinary session of the Pilot Committee of the Programme of Economic and Financial Reforms of the Central African Economic and Monetary Commission zone held in Brazzaville, Congo.
However, in making the declaration, Motaze could not possibly have envisaged such a drastic drop in revenue from the National Hydrocarbons Corporation because crude prices which had dropped to a historic low started an upward climb which hit 40 dollars per barrel before pointing downwards again.
In the final analysis, the rectification of the budget which is supposed to be decreed by the president of the Republic before the June 10 National Assembly session opens may not only reflect a drop in oil revenue but also a drop in excise duty collected by the Customs Department. And this because of a drastic drop in receipts due to a slow-down in economic activities in the country since the confirmation of the first COVID-19 case on March 6, 2020.
All this put together would certainly result in the slashing of the initial budgets of almost all ministerial departments with a special impact on the public investment budget for 2020.