THE CURRENT CASH PLAN OF THE PUBLIC SECTOR OF THE

[Congo]

THE CURRENT CASH PLAN OF THE PUBLIC SECTOR OF THE

DRC (PTR) FOR FISCAL 2020

Introduction

The Finance Law has three main parts in the DRC:

– The general budget;

– Additional budgets;

– Special accounts.

The Budget for a financial year is not to be confused with the corresponding Cash Plan.

The latter is a tool for managing and steering the execution of the Budget with regard to fluctuations in the economic situation and constraints found in the field. Thus, the Cash Plan is adjustable, that is to say varies periodically depending on the data present.

To obtain the Treasury Plan, it is necessary to deduct from the Finance Law, at the level of the general budget external resources in the form of grants or loans which are already pre-allocated, the annexed budgets and the special accounts, which fall under the activity of companies emerging at this level.

Thus, after deduction of these elements, the 2020 Finance Law is voted in balance at 18.545.2 billion CDF. This overall amount is brought down to CDF 13.869 billion taking into account the underlying macroeconomic framework. This amount can be considered for the Cash Plan as the maximum amount of income and expenditure, in other words in cashable products and disbursements.

However, as the macroeconomic framework is not frozen but shifting and the circumstances which prevailed when the Budget was adopted have changed, the Cash Plan takes up the realities of the moment in its content.

The Public Sector Treasury Plan based on current realities

This Cash Plan results from taking into account the unfavorable trends of the current economic situation. It retains total revenue and expenditure of CDN 9,195.6 billion and 9,545.6 billion respectively.

The result is a CDF 350 billion deficit to be covered by the issuance of treasury bills to be subscribed by commercial banks.

This Treasury Plan is therefore based on zero monetary funding from the Central Bank of Congo in accordance with the criteria of the reference program (from January to May) and the formal program to come.

The level of revenue refers to the current statements of the Financial Boards after taking into account in particular the consecutive slowdowns in global growth and their repercussions on domestic growth as well as the lagged effects resulting from the collapse in the last quarter of 2018 of the price of Cobalt.

The new revenue level was determined by applying a 20% increase on current revenue stopped at the end of December 2019 (CDF 7,487.947 billion) based on the trend observed over the past three years. Their monthly payment is obtained by applying the average monthly weighting by heading.

With the exception of remuneration, external debt service and retrocessions to the financial authorities, for the remainder of the expenditure, the average for the achievements for 2019 was applied with some adjustments in relation to the projected annual and monthly balance.

The compensation envelope retained in the 2019 fourth quarter Treasury Plan has been updated on the basis of information communicated by the Payroll Department for the first quarter of 2020, followed by an increase of CDF 30 billion for the second quarter of 2020. , from CDF 20 billion for the third quarter of 2020 (same envelope for the fourth quarter). The projections of the Directorate General of Public Debt on external debt have been aligned;

As for retrocessions to the financial authorities, the usual rates of 5% and 10% respectively for the receipts of the General Directorate of Taxes (DGI) and the General Directorate of Customs and Assizes (DGDA), and for the General Directorate of Administrative Receipts, , state and portfolio (DGRAD) were applied. The reimbursement of issues of public securities made in the last quarter of 2019 has been taken into account.

observations

The difference between the two Treasury Plans is due in particular to the variability of the economic situation, the periodicity linked to the deadlines for implementing revenue control measures and the impact of the structural reforms envisaged in 2020.

Generally speaking, the responses to these structural measures and reforms, if they are properly applied and monitored, will not be possible until 2021.

In any case, it is imperative to note that the budgetary commitment plans must be adjusted to the different Cash Plans that will prevail. In this way, the stacking of commitments, liquidations and orders will be avoided, in short the swelling of budgetary outstandings and even the risk of recourse to monetary financing from the Central Bank. It goes without saying that such management excludes recourse to emergency procedures and secondments.

Coordination between the Ministries of Budget and Finance and the latter with the Central Bank must be essential.