1. This supplement contains information that has become available since the issuance of the above-referenced report to the Board on December 3, 2003. The thrust of the staff appraisal remains unchanged.
A. Prior Actions
2. All the prior actions were met as of December 8, 2003. These were: (i) preparation of the first list of uncashed checks from taxpayers, the date of receipt of which is exceeding two months’ old or more (para. 2 of the TMU); (ii) adoption of an action plan for the effective operationalization of the large taxpayers’ unit within the tax department created on June 30, 2003 (para. 3 of the TMU); and (iii) completion of the final phase of the information and financial management system (IFMS) for all central government revenue and expenditure (including at the local branches of the central government), based on the new budget classification system (para. 4 of the TMU).
B. Recent Economic Developments
3. Based on preliminary data, macroeconomic developments in the third quarter of 2003 were broadly in line with the program estimates.
4. Oil output reached 8.9 million barrels during the third quarter, as anticipated. The 12-month average inflation rate (based on the Consumer Price Index) continued to decline to 1.1 percent in September 2003, with a moderate increase in foodstuff prices. As compared to the third quarter of 2002, non-oil exports increased in CFA francs value by 4 percent, benefiting from the significant volume growth of some traditional agricultural exports (particularly bananas and cocoa). During the same period, the value of imports declined by 6.4 percent, partly as a result of the completion of the construction of the Chad-Cameroon oil pipeline.
5. The slightly lower-than-anticipated non-oil revenue performance in the third quarter of 2003 was offset by higher oil revenue collection, reflecting larger-than-projected oil prices. Noninterest expenditures exceeded somewhat the program estimates, owing to larger-than-envisaged payments on account of transfers and subsidies and restructuring expenditures. Disbursements for capital outlays were below target.
6. Broad money growth decelerated to 5.8 percent (on a year-on-year basis) by end-September 2003, reflecting notably a slowdown in expansion of credit to the private sector. Cameroon’s contribution to the foreign assets of the regional central bank, the BEAC, remained constant during the third quarter of 2003.
C. Draft Budget Appropriations Act for 2004
7. Based on available documentation, the draft Budget Appropriations Act for 2004, which was submitted in early December to the National Assembly, is consistent with the program’s fiscal targets.
D. Structural Measures
8. The end-November 2003 structural benchmark relating to the specification of the poverty reduction expenditure-related budget items, based on the new functional budget classification system, prior to the submission to the National Assembly of the draft Budget Appropriations Act for 2004 was implemented as foreseen (para. 10 of the TMU).