ASSESSMENT OF REVENUE GENERATION AND MANAGEMENT IN CAMEROON'S PUBLIC INSTITUTION: A CASE STUDY OF MINISTRY OF FINANCE AND ECONOMY

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

In the contemporary global economic landscape, efficient revenue generation and management within public institutions have become paramount for sustaining national development agendas. According to  Kouedjou & Kamdem (2020), revenue generation refers to the process through which funds are collected by the government to finance public expenditures and provide essential services to citizens. In Cameroon, revenue generation primarily revolves around taxation, natural resource extraction, tariffs, and other forms of levies and fees. Taxes constitute a significant source of revenue for the Cameroonian government. This includes income tax, value-added tax (VAT), corporate tax, property tax, and excise duties. However, challenges such as tax evasion, informality in the economy, and weak enforcement mechanisms impede the efficiency of tax collection and other sources.

Njoh (2021) emphasized the significance of revenue generation is tied to the management practices of the public institution involve, he thus stated that revenue management involves the effective administration and allocation of funds to ensure optimal utilization for public goods and services. In Cameroon, the Ministry of Finance and Economy plays a central role in revenue management. Cameroon possesses abundant natural resources, including oil, gas, minerals, and timber. Revenue generated from the extraction and export of these resources contributes to the government's budget. However, Asongu & Nguena (2019) reckoned that fluctuations in commodity prices and issues related to transparency and accountability in the extractive industries pose challenges to maximizing revenue from this source.

Similarly , revenue management involves the effective administration and allocation of funds to ensure optimal utilization for public goods and services. In Cameroon, the Ministry of Finance and Economy plays a central role in revenue management. The ministry is responsible for preparing the national budget, allocating resources to different sectors, and ensuring alignment with government priorities. Budgeting involves forecasting revenue streams, setting expenditure targets, and monitoring spending to prevent budget deficits. The ministry oversees financial transactions, maintains financial records, and enforces accountability standards to prevent fraud, mismanagement, and corruption. Therefor effective financial control mechanisms are essential for safeguarding public funds and maintaining fiscal discipline.

Within the context of Cameroon, a country grappling with multifaceted socio-economic challenges, the effective functioning of public institutions, particularly the Ministry of Finance and Economy, holds significant importance. The Ministry of Finance and Economy serves as the cornerstone of fiscal policy formulation, revenue mobilization, and financial resource allocation, thus playing a pivotal role in shaping the country's economic trajectory. By examining the existing frameworks, practices, and challenges associated with revenue generation and management, the research endeavors to provide insights that can inform policy interventions, institutional reforms, and best practices for enhancing revenue mobilization and financial management within the public sector.

1.2 Statement of the Problem

Cameroon, located in Central Africa, possesses a varied economy encompassing sectors such as agriculture, mining, energy, and services. Despite its economic potential, the nation grapples with significant challenges, including poverty, unemployment, and deficiencies in infrastructure. Effective management of public finances, especially in terms of revenue generation and allocation, is crucial for addressing these issues and promoting sustainable development (Boko, 2019). In terms of institutional framework, public finance management in Cameroon is guided by legal structures and administrative systems designed to uphold fiscal discipline, transparency, and accountability. 

Unarguably,the Ministry of Finance and Economy plays a central role in formulating and executing fiscal policies, managing public revenues, and overseeing government expenditures. However, Ndikumana & Sarr (2017) note instances of corruption and opacity in revenue collection and expenditure allocation within Cameroon's public institutions, eroding public trust in the Ministry's operations and hindering its objectives. Moreover, the absence of robust policy frameworks and regulatory mechanisms exacerbates challenges in revenue generation and management, creating opportunities for mismanagement and malpractice. The Ministry's capacity to streamline processes and enhance revenue management efficiency is further hampered by outdated technological infrastructure and limited adoption of modern financial management systems.

Despite initiatives to boost revenue generation, Cameroon continues to face persistent challenges. These include issues such as tax evasion, weak enforcement mechanisms, informal economic activities, and dependency on volatile revenue sources like oil exports (Jouko & Akom, 2018). Additionally, the complexity of Cameroon's tax system, characterized by numerous taxes and administrative burdens, poses obstacles to compliance and revenue collection efficiency. Njoh (2021) highlights that the management of public finances in Cameroon is marred by inefficiencies, corruption, and insufficient accountability mechanisms. Weak financial controls, coupled with limited transparency and mismanagement of public resources, undermine confidence in government institutions and impede socio-economic development. Furthermore, the lack of coordination between revenue collection agencies and spending ministries exacerbates inefficiencies in resource allocation (Asongu & Nguena, 2019).

Institutionally, public finance management in Cameroon is guided by legal frameworks and administrative structures aimed at ensuring fiscal discipline, transparency, and accountability. The Ministry of Finance and Economy serves as the principal institution responsible for formulating and implementing fiscal policies, managing public revenues, and overseeing government expenditures. Bizarrely, Ndikumana & Sarr (2017), mentioned that in Cameroon’s public institution instances of corruption and opacity in revenue collection and expenditure allocation undermine public trust and confidence in the Ministry's operations, thereby hampering its ability to achieve its objectives. The absence of robust policy frameworks and regulatory mechanisms exacerbates challenges related to revenue generation and management, leaving room for mismanagement and malpractice. Outdated technological infrastructure and limited adoption of modern financial management systems hinder the Ministry's ability to streamline processes and enhance efficiency in revenue management.

Despite efforts to enhance revenue generation, Cameroon faces persistent challenges. These challenges include tax evasion, weak enforcement mechanisms, informal economic activities, and reliance on volatile revenue sources such as oil exports (Jouko & Akom, 2018). Furthermore, the complexity of Cameroon's tax system, characterized by multiple taxes and administrative burdens, hampers compliance and revenue collection efficiency. Njoh (2021) added that  The management of public finances in Cameroon is marked by inefficiencies, corruption, and inadequate accountability mechanisms. Weak financial controls, limited transparency, and mismanagement of public resources undermine trust in government institutions and hinder socio-economic development. Moreover, the lack of coordination between revenue collection agencies and spending ministries exacerbates inefficiencies in resource allocation (Asongu & Nguena, 2019).

Although studies on resource management exist in other developing economies like Nigeria, and Ghana, there is paucity of data on how revenue is generated and managed within the confines of public institutions. Against this backdrop, understanding the intricacies of revenue generation and management within the Ministry of Finance and Economy emerges as a crucial area of inquiry.

1.3 Objective of the study

The broad objective of this study is focused on assessment of revenue generation and management in Cameroon's Public Institution: A case study of Ministry of Finance and Economy. Specifically, the study seeks

To explore the primary revenue sources utilized by the Ministry of Finance and Economy in Cameroon.

To find out how efficient is the existing revenue generation and management  mechanisms in Cameroon.

To examine the factors influencing the effectiveness of revenue generation efforts within the Ministry.

1.4 Research Questions

What are the primary revenue sources utilized by the Ministry of Finance and Economy in Cameroon?

How efficient are the existing revenue generation  and management mechanisms in Cameroon?

What are the factors influencing the effectiveness of revenue generation and management efforts within the  Ministry of Finance and Economy in Cameroon?

1.5 Research Hypothesis

Ho: The existing revenue generation and management mechanisms in Cameroon's Public Institution is not efficient and effective.

Hi: The existing revenue generation and management mechanisms in Cameroon's Public Institution is efficient  and effective.

1.6 Significance of the study

The significance of the study lies in its potential to inform policy decisions, institutional reforms, and capacity-building initiatives aimed at enhancing revenue generation and financial management within Cameroon's public institutions, particularly the Ministry of Finance and Economy. By providing insights into the challenges and opportunities associated with revenue generation and management, the study can inform the development of evidence-based policies and strategies to improve fiscal performance and promote economic development in Cameroon. The findings of the study can guide institutional reforms within the Ministry of Finance and Economy, helping to address deficiencies in revenue collection processes, expenditure management practices, and governance structures. 

Empirically, the study contributes to the academic literature on public finance management, revenue generation, and institutional governance in developing countries. It enriches existing knowledge by offering empirical evidence, theoretical insights, and practical implications that can guide future research endeavors and scholarly discussions in the field.

1.7 Scope of the study

The scope of the study encompasses an in-depth analysis of revenue generation and financial management within public institution.  Empirically, the study examined of the primary sources of revenue for the Ministry, including taxes, non-tax revenue, grants, and other sources of income and the effectiveness of existing revenue collection mechanisms, including tax administration, compliance, enforcement, and the use of technology. Geographically, the study will draw its participant  Ministry of Finance and Economy in Cameroon.

1.8 Limitations of the study

The study acknowledges certain limitations, including constraints on data availability, time, and resources, which may affect the depth and scope of the analysis. The study focuses solely on revenue generation and management within the Ministry of Finance and Economy, which may overlook broader systemic issues or interactions with other government agencies and sectors. The study focuses solely on revenue generation and management within the Ministry of Finance and Economy, which may overlook broader systemic issues or interactions with other government agencies and sectors. Findings and recommendations derived from the study may have limited generalizability beyond the specific context of Cameroon's Ministry of Finance and Economy and may not be applicable to other countries or institutions.

1.9 Definition of Terms

Revenue Generation: The process of generating income or funds for a government or organization through various sources, including taxes, fees, tariffs, grants, and other forms of revenue.

Revenue Management: The strategic planning, allocation, and control of financial resources, including revenue collection, budgeting, expenditure management, and financial reporting, to achieve organizational objectives efficiently and effectively.

Ministry of Finance and Economy: A government department or agency responsible for formulating and implementing fiscal policies, managing public finances, regulating financial markets, and promoting economic development within a country.