Containing Inflation : Heavy Weight On Public Funds

Inflation which is defined as the general increase in prices of goods and services in an economy due to several factors, is something most governments, including that of Cameroon battles with on a daily basis to keep under control. In most situations, government shoulders the responsibility of providing subventions to most consumer goods in order to maintain an affordable standard of living to the population.  As a result, measures carried out by government to contain inflation which principally involves subvention of prices especially by uplifting customs duties on some consumer goods, have an adverse impact on public finance in general. 
The 2022 amended finance law on the State budget of Cameroon for example, reveals a reduction in its customs revenue of FCFA 40 billion (-4.4 per cent). That is, the initial projected FCFA 903.9 billion to be collected as customs revenue, has been dropped to FCFA 863.9 billion. Simply put, the government of Cameroon has cancelled a quota of customs duties to be paid on certain goods and services in order to maintain their prices at a reasonable rate in the local market. In essence, 80 per cent of customs duties are shouldered by the government and this costs approximately between FCFA 40 to 45 billion yearly. 
The unfortunate ongoing conflict between Russia and Ukraine has further complicated a not-too-good situation already imposed by the outbreak of the Covid-19, especially in petroleum and flour related products, which are dependable commodities in every economy, Cameroon inclusive. Faced with the situation, government took a first decision on November 16, 2021, and extended for the second time on June 3, 2022 for a period of three months, which includes an 80 per cent reduction on the cost of cargo imported by sea. This decision, taken in a " context of an unprecede...