Sources of Local Government Funding in Cameroon

There exists 339 councils and 10 regions in Cameroon. Every local authority in Cameroon has two organs; a deliberative organ and an executive organ. According to article 55 in part ten of Cameroon’s constitution dedicated to ‘Regional and Local Authorities’:

·  Regional and local authorities of the Republic shall comprise regions and councils. Any other such authority shall be created by law.

· Regional and local authorities shall be public law corporate bodies. They shall have administrative and financial autonomy in the management of regional and local interests.

Article 56 of the constitution states that the law shall define the sharing powers between the state and regions in the areas of competence so transferred.

The state is the guarantor of harmonious development of all councils and is expected to create equilibrium among them. Regional and local authorities have been endowed with treasury stations set up by the order of the Minister of Finance. The collection of council revenue and the payment of council expenditure is ensured by the Municipal Treasurer, and where necessary, by the closest Treasury Accountant.

The statutory sources of revenue of local councils in Cameron include those gotten from CEFAM and FEICOM. The Local Government Training Centre, CEFAM, and the Special Inter-communal Equipment and Support Fund, FEICOM, are key players in the decentralization process in Cameroon. FEICOM’s roles in the decentralization process are: the collection and redistribution of additional council surtax and providing grants and soft loans to councils. The PNDP (National Community Driven Program) financially supports the local councils in their development initiatives.

Other statutory sources of revenue of local councils in Cameroon include royalties for the use of natural resources like forest and mine exploitation. The forest is one of the most exploited resources in Cameroon. Logging represents about 25% of Cameroon’s total exports. The Felling Tax, land area charge (RFA), and ‘FCFA 1000 Tax’ exit duty on logs are examples of taxes that are imposed on forest exploiters. The new decentralized tax system allows for the distribution of the RFA which is reserved for communities. Finance law determines the share reserved for communities as follows:

·        50% for the state;

·        50% for local councils

The ‘FCFA 1000 Tax’ represents a contribution by loggers to social projects.

Other sources of statutory revenue include:

·      Support funds;

·     Allocation funds received for investing;

·    Fiscal revenue – direct and indirect taxes and other tax deduction stipulated by law;

·    Deduction on state fiscal revenue, and council taxes;

·Allocations and subventions e.g. the General Operating Allocation granted to sub-divisional councils, and the General Decentralization Allocation;

· Proceeds from land management.

   Permissive sources of local councils’ revenue include:

·Proceeds from the sale of goods and property liens;

·Outstanding collections of previous financial years deemed to have been recovered;

·Production of capital assets by the council for itself;

· Resources from decentralized cooperation;

· Investment reserves.

The incidental sources of local councils’ revenue in Cameroon are:

·   Bonuses and fees granted by the state;

·   Proceeds and sundry profits;

·  Trade-in of amortization;

·  Donations and legacies.