May 2008JJ/WBGSP Regional Conference1 Topic: Oil and Poverty Reduction in Cameroon Ali AHAMAT BREME NB: This topic was developed in the case of auditors’ training for 8th promotion GPE Program.

May 2008JJ/WBGSP Regional Conference2 General context: The problems of oil are in the center of the concerns, strategic stake, geopolitical in the World, in Africa and more precisely in the golf of Guinea. Indeed, since 1973, oil upsets the world economy. Since the oil crisis of 1979, sub-Saharan Africa followed a new way. These shocks were stronger, but touched the vulnerable African countries. The capacity of the African countries to retain the oil revenues appeared only through the various corruption and traffics. Africa sees each day the social inequalities increasing in spite of its abundant equipment in natural resources (oil, the forest, diamond, etc).

May 2008JJ/WBGSP Regional Conference3 General context (follow and end) With regard to Central Africa, it is one of the constitutive zones of the oil arc of the golf of Guinea. In spites of the incomes drawn from the sale of the crude oil, the countries of Central Africa know such a high level of poverty (the monetary rate of poverty is 50,6 for Cameroon and 38,4 for Chad). Oil being source of energy, its exploitation can lead to the improvement of the living conditions of the populations. It is what led us towards the question of following research:

May 2008JJ/WBGSP Regional Conference4 Question of research : What is the effect of the oil incomes on the reduction of poverty in Cameroon?

May 2008JJ/WBGSP Regional Conference5 The principal objective: To analyze the role played by the oil incomes on the reduction of poverty in Cameroon.

May 2008JJ/WBGSP Regional Conference6 Secondary objectives: 1- To make a state of the places of production of oil and the appreciation of the level of poverty in Cameroon; 2 - To evaluate the impact of the oil incomes on the reduction of poverty in Cameroon.

May 2008JJ/WBGSP Regional Conference7 From The results of this study arise the following observations: 1- The Cameroonian oil production, started in 1977 reached its peak in 1986, with more than 10 million tons produced in one year, that is to say an average of barrels per day against barrels today.

May 2008JJ/WBGSP Regional Conference8 From the results of this study arise the following observations (follow): 2 - Oil, after marketing by the HNS (Société Nationale des Hydrocarbures), its income is taken into account by the budget of the State. And this is since It is thus starting from the budget that the expenditure with the priority sectors is carried out according to the orientation of the government.

May 2008JJ/WBGSP Regional Conference9 From the results of this study arise the following observations (follow): The analysis of the impact of the oil revenue on the budget of the State and that of the budget of the State on poverty proved to be a necessity.

May 2008JJ/WBGSP Regional Conference10 From the results of this study arise the following observations (follow): The budgetary resources have been in constant increase in Cameroon for these last years (passing from 1721 billion in 2005 to 1861 billion in 2006 and to 2251 billion FCFA in 2007). This increase can be also explained by the taking into account of the receipts from the sale of oil wich knew a significant rise (688 billion in 2007, against 515 billion in 2006 and 310 billion in 2005). That makes possible to the State to raise the budget of certain ministries to fight effectively against poverty.

May 2008JJ/WBGSP Regional Conference11 From the results of this study arise the following observations (follow): Since the budgetary weight also rests on the oil receipts, the oil incomes contribute to this level with to fight against poverty. Even if the economic growth rate of Cameroon is increasingly constant these last years (around 4,8% per annum), poverty is observed in a notorious way in the country.

May 2008JJ/WBGSP Regional Conference12 From the results of this study arise the following observation (follow and end): There are moreover harmful effects of the exploitation of oil which negatively affect the living conditions of the populations. Destruction of the environment through the construction of the pipeline for example.

May 2008JJ/WBGSP Regional Conference13 Conclusion and recommendations: Ultimately, if it is true that the Cameroonian government worked out into 2003 a national strategy of reduction of poverty in order to approach the MDO (Millenium Development Objectives), efforts however remain to provide. That is why, for an effective contribution of the oil revenue on the reduction of poverty in the producing African countries of oil in general and in Cameroon in particular, it proves to be necessary to proceed to the recommendations of economic policy:

May 2008JJ/WBGSP Regional Conference14 Conclusion and recommendations (follow):  It is necessary to work for the right distribution of the fruits of oil by the investment of the incomes generated in the social sectors (education, health, infrastructures...) offering the services to costs reduced to the populations;

May 2008JJ/WBGSP Regional Conference15 Conclusion and recommendations (follow):  To improve and reinforce the levers of perennial growth such as the agricultural sectors, the breeding, fishing... by the oil incomes;  To collaborate with the organizations of the civil company committed in the monitoring of the management and the redistribution of the oil richness;

May 2008JJ/WBGSP Regional Conference16 Conclusion and recommendations (follow and end):  To incorporate the whole of the oil incomes in the national budget;  to abstain from resorting to loans guaranteed on oil until effective measures in favour of the transparency of the oil incomes and the budget are taken.

May 2008JJ/WBGSP Regional Conference17 Thank you for your kindly attention

May 2008JJ/WBGSP Regional Conference18 For more information: Ali Ahamat Brémé Tel :(Cameroon) (Chad)