Prior
to the beginning of the 2014 World Cup, I in earnest told some of my friends
that I didn’t want my beloved country Cameroon to have a successful stint at
the World Cup, not because of any unpatriotic propensity or desire to stoke friendly conflict and enliven our football
banter. I made this statement because I thought we didn’t deserve it but most
importantly because I deep down feared any indomitable performance from the
Cameroonian squad would undoubtedly result in price hikes. I just couldn’t
shake off the feeling that most price hikes always came about in the midst or
vicinity of sporting events in which the Indomitable Lions are involved. While
Cameroonians would be huddled together in the seasonal unity often triggered when
the Indomitable Lions’ partake in tournaments, I thought, government would stealthily
step out and formalise a price hike. This was my fear before the Brazil- hosted
World Cup kicked-off. On June 30, 2014, days after Cameroon had left the World
Cup jamboree, the Secretary General in the Prime Minister’s Office, Louis-Paul
Motaze, turned my fears into reality by signing a communiqué “readjusting the
price of fuel and cooking gas”.
How
I saw it
At
the time of fearing this price hike, I was thinking of a direct increase in the
price of basic commodities. I was thinking of a scenario where after a
fulfilling evening, spent watching maybe Cameroon outmuscle maybe host country
Brazil, Cameroonians would pick a quarrel with their respective neighbourhood
shopkeeper after they accuse him of greedy mercantilism and he has tried unsuccessfully
to explain to them that he isn’t trying to cheat anybody and that prices simply
went up unexpectedly. I never envisaged that it would be an increase in the
price of fuel.
The price readjustment or hike
proper
According
to the communiqué, as from July 1, 2014, a litre of super previously sold at CFA Francs 569 will now cost CFA Francs
650, a litre of gasoil (diesel), formerly CFA Francs 520 will now be sold at CFA Francs 600, while a 12.5KG bottle of
cooking gas hitherto sold at CFA 6000
will henceforth cost CFA 6500 Frs. Only the price of kerosene has survived the
onslaught, remaining at CFA Francs 350 per litre. Despite popular outcry, it is
worth saying that ending the subsidies is a necessary and even indispensable evil given that
between 2008 to
2013, these subsidies are said to have cost Cameroon about 1,200 billion CFA Francs. For the first six
months of the current financial year, it has already sucked up 157 billion CFA
Francs, according to the communiqué. Furthermore the fuel subsidies stand
partly blamed for the country’s overall fiscal deficit for 2014 that was
projected to stand at 5.5% of GDP. According to the IMF, this deficit is
expected to hit 5.7% in 2015.
However
despite all the apparent economic credibility of arguments in favour of ending
the subsidies, countless questions persist, demanding equally convincing
answers.
Will
the fuel price hike not have a ripple effect on the price of basic commodities?
Although
government strove to reassure Cameroonians that the fuel price hike would not
affect the price of basic commodities, it is difficult to take the government’s
word for it, not because of any narrow-mindedness or opposition but because of
the dynamics of common sense and market practices. In Cameroon, fuel price
hikes have often, if not always, been synonymous with an increase in the price
of basic commodities. Upon leaving the port or factories, basic commodities are
often transported by road. Transporters and business persons have inflexible
profit margins which they would not sacrifice on any grounds whatsoever. So
whenever a fuel price hike bites into these profit margins, they immediately
compensate by increasing the price of basic commodities. The brunt of this
increase ends up always being borne entirely by ordinary Cameroonians who have
no one else to transfer the price increase burden to. The buck always stops
with them. Sure government has promised a salary increase to enable Cameroonians
comfortably sustain the fuel price hike effects, it has also promised some tax
breaks, but this promise doesn’t answer the essential question of whether or
not this latest fuel price hike won’t send basic commodity prices up. It leaves
it unanswered and even engenders other questions: when will this salary
increase come about? If ever it materialises, how much will it be? Will it be
enough to enable Cameroonians not feel the pinch of the fuel price hike? Will
this promised salary increase not provide business persons with a good reason
to increase the prices of basic commodities? Conscious of the ripple effect the
price of fuel has on the prices of other products in Cameroon, especially basic
commodities, this question remains the most important in the wake of this fuel
price hike.
On the side-lines of
the ripple effect questions lie others of a somewhat marginal yet pertinent
nature.
Why
call a spade a long stick for digging?
It
was interesting to see how the Government parcelled, and through its media,
delivered this unwelcome news. The communiqué announcing the fuel price
labelled it the “readjustment” of the prices of fuel and cooking gas. The
national daily, Cameroon Tribune, in its headline talked of “prices adjusted”
(my translation from French) while the word “modification” was used on national
television. This consistent use of soft and easily-digestible synonyms like
“adjustment and modification” begs the question of why the decision not to call
a spade a spade? Why the refusal to give this decision the name it deserves?
Why the decision to call a price hike a “price readjustment”? Should this not
be seen as a way of manipulating Cameroonians so that they can easily swallow
this bitter bill?
What’s
next?
It
is no secret this latest fuel price hike is the culmination of pressure from
the International Monetary Fund and the ever- heard- but- never- seen donors.
Since Cameroon has been a long and loyal destination for IMF dogma,
officialising the end of fuel subsidies should not come as a surprise, from an
economic perspective at least, “Ajustment structurel oblige”. But from a
nationalist perspective, this is worrying and should get every Cameroonian uncomfortable
and thinking whether they are okay with the constant national implementation of
foreign conceptualisations, irrespective of their publicised selfless ends. It
should equally make Government ask itself whether Cameroonians are happy with
the sovereignty –depleting and socially-hazardous effects of these IMF
intellectual concoctions when we know that some Asian countries spited similar
suggestions of IMF origin and yet blossomed into Asian tigers. A case in point is Malaysia. These questions
are even more pertinent when we compare the promised and actual outcome of some
IMF proposals. National electricity company SONEL was ceded to American
ownership with the promise that service delivery would be better but that has
not been the case. Power cuts are still pretty common and the rudeness of the
ladies at the cash desk seems to have gone from bitter to venomous. So
shouldn’t Cameroonians be weary of the endorsement of another IMF proposal
especially when it makes a supposed sovereign government and country dance to
the whims and caprices of its wisdom? Most especially, it should get
Cameroonians asking what is the next IMF suggestion Government will implement?
Where
will the money saved go to?
If
the argument in favour of ending the fuel subsidies is anything to go by then
for the remaining six months of the current financial year, State coffers
should save at least extra 157 billion CFA Francs that would have been used for
fuel subsidies had it not been scrapped? Consequently this reality begs the
question of where will the money go to? To what ends will it be put? Given the
rampant corruption, Government should spare a little space in its mind for our
sceptism.
