CHAPTER ONE

 GENERAL INTRODUCTION

Background of the study.

This concept of a budget is basically a state budget, a state budget being a government budget. A Government budget is a document prepared by the government or other political entities presenting it anticipated revenues and proposed spending for the coming financial year.

In most parliamentary systems, the budget is presented to the lower house of the parliament. Through this budget, the government implements economic policy and realizes its priorities. Once the budget is approved, the use of funds from individual chapters is in the hands of government ministries and other institutions. 

The state budget is generally studied under public finance. According to Prof LEKENE DONFACK if one wants to link public finance to law, it will essentially public law because it is the finance of a public person. Public finance has always been considered as the lifeblood of the republic since they are absolutely necessary for the world functioning of any state.

No state can have effective political and economic sovereignty without necessary financial resources. According to Prof DALTON in his book principle of public finance states that “public finance concern with income and expenditure of public authorities and with adjustment of one to the other.” By this definition, we can understand that public finance deals with the income and expenditure of government entities at any level be it central, state or local.

Prof DALTON categories the scope of public finance as follows;

a) Public revenue. The study of various sources of government income, the principle guiding the raising of income (e.g. tax) their relative merits and demerits and their effect on the economy (e.g. impact and incidence of taxation. 

b) Public expenditure. The study of the manner in which public expenditure is classified, the principle guiding public expenditure.          

c) Public debts. The study of public debts from a very important part of public finance in modern times as governments are increasingly resorting to debt to meet the growing need of the people. Public finance studies the sources, burden and impact of public debt.

d) Financial Administration. This includes the study of the preparation, passing and implementation of the budgetary policies and their socio-economic impact, inter-governmental financial relations, fiscal management and responsibility.

Public finance has actually developed from classical or traditional public finance to modern public finance.

1.1) Historic development of public finance.                                                                                                                                                     

 Two great moment characterize the evolution of public finance; the period of classical public finance and that of modern public finance 

 a) The classical public finance 

Economic thinking about the role of public finance is expected to play has changed from time to time according to the changes in the economic situation. Before the Great Depression that gripped the western industrialized countries during the 30s, the role of public finance was considered to be raising sufficient resources for carrying out the government functioning of civil administration and defence from foreign countries.

During this period, the classical economist considered it prudent to keep expenditure to a minimum so that taxing of the people is avoided as far as possible. Under the impact of the great depression of 30s and the Keynesian explanation of it, the thinking about the role of public finance underwent a sea change.

The classical view of public finance could not meet the requirement of the then prevailing situation. In order to increase aggregate effective demand and thereby raised the level of income and employment in the country, public finance was called upon to play an active role. During the Second World War and after, the western economies suffered inflammatory pressures which were attributed to the excessive aggregate demand.

So in such inflammatory conditions, public finance was expected to check prices by reducing aggregate demand. Thus the budget which was previously meant to raise resources for limited government activities assumed a functional role to serve as an instrument of economic regulation. It came to be realized that the government can spend beyond their resources without offending canons of sound finance to restore the health of the economy.

Following the economic crises world wars, the state abandoned traditional public finance in favour of modern public finance. 

b)Modern Public Finance. This is a period of state interventionism, one entered the era of state mission expansion in addition to the sovereign mission, economic and social missions. The purview of public finance is considered to be threefold; government effect on (1) efficient allocation of resources (2) distribution of income and (3) microeconomic stabilization.

MIT Economist JOHNATHAN GRUBE has put forth a framework to assess the broad field of modern public finance. Gruber suggests public finance should be brought of in terms of four central questions.

 1) When should the government intervene in the economy to which there are two central motivations for government intervention, market failure and redistribution of income and wealth?             

2) How might the government intervene? Once the decision is made to intervene, the government must choose the specific tool of policy to carry out the intervention. (For example priority, taxation or subsidization). 

 3) What is the effect of this intervention on the economic outcome? A question to assess the empirical direct and indirect effect of specific government intervention.                                                                                                        

4)  And finally, why does the government choose to intervene in the way they do? This question is centrally concerned with the study of political economy, theorizing how others make public policy.

1.1.2. Introduction of the programme budget in Cameroon’s public finance.                                                             

The fiscal year 2013 marks the full effectiveness of law N^O 2007/006 of 26 Nov 2007 relating to the Fiscal Regime of the state. This law alights our country to a new approach to public management through programme budget. As a public finance tool, programme budgeting consists of preparing, presenting and implement finance law based on programmes.

In this method, ministers set medium-term goals and define the result they hope to achieve, accompanied by indicators for measuring these results afterwards. This is therefore a strategic management tool use in scheduling, planning and adjusting public action. According to this new financial regime, government department and public institutions have to “do better with less”.

1.1.3 Programme Budget And Resource Based Budget

The limitation of budgetary commitment for the year is replaced by multi-annual programming. A programme may be extended for three years even if it’s available annually. Until 2012, the state was given public administration resources according to their need. That’s why it’s called a resource-based budget and the programme budget calls a result-based budget.

The difference lies in the purpose of the expenditure; a manager was assessed of the regularity of expenditure whether he has solved a problem or not whereas now the same manager is evaluated on the result archived with the resources received. Moreover, this pre-supposes that public funds went to the right place.

The programme budget has been used in many country for many years it is the case of six African countries which are; South Africa, Mali, Tunisia, Mauritius, Morocco and Gabon. Outside Africa the country include USA, FRANCE, NEWZEELAND etc. have put in place a system of programme budget more4 than two decades ago.

1.2. Statement Of The Problem

The exclusive jurisdiction of in budgetary matters wrest with the parliament. But they do have neither a right of initiative nor a real right of amendment. The right to amend Bills held by the parliament is logically extended to the Finance Act. The effective adoption of private member bills. All these post a problem to look in to during this research.

1.3. Research Questions.     

  1.3.1 Main Question

1) What are the major roles of the parliament over budgetary matters in Cameroon?   

1.3.2 Secondary Question

2) To what extend is the parliament independent from the executive over budgetary matters?                                                   

 3) What are the limitations or restrictions of the parliament in budgetary matters?                   

 4) Are there any instance were the executive has power left to it over budgetary matters?                                                                   

1.4 Research Objectives       

1.4.1 General Objective 

 To critically assess the way in which the executive and the legislative powers control the state budget.

1.4.2 Specific Objective 

.To examine how the programme budget is prepared.                                                                                                                                                           

To determine the consideration and passing of the Finance Act.                                                                                                                                             

To determine the restriction of budgetary power of the parliament

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