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Jean-Oscar Ngalamulume: « The DRC’s budget can easily reach 60 to 70 billion USD »

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Jean-Oscar Ngalamulume: "The DRC's budget can easily reach 60 to 70 billion USD"

Jean-Oscar Ngalamulume is one of those Congolese who are convinced that it is possible for the Ilunkamba Government to raise the level of the State Budget, whose 2020 forecasts put a ceiling on it at around US$7 billion. This is enough to call on the Head of State to give the impetus for increased mobilization of public revenues.

This economist estimates that with taxes on human capital applied in a context of wealth creation and decent jobs, the Treasury can easily capture US$60-70 billion. Below, the content of his Tribune:

Since the beginning of the century, the sovereign missions of the modern state, that is, of a state governed by the rule of law, have become more and more diversified, while at the same time leading its objectives towards the economic growth it must achieve. However, this economic growth is to a large extent a function of investment, the most appreciated component of which is financial capital….

The primary source of the State’s income comes from taxes.

For a Congolese to pay taxes to the State, not only that he must have work, but also a decent salary that allows him to pay the rent, eat from the first to the thirty of the month, pay for transport, provide medical care, pay his children’s fees and save.

This Congolese man who meets these six conditions, thanks to his salary, whatever his social rank, will pay the tax to the State. So, to restore the broken economic balances, our country needs two capitals.

Human and financial capital

From a human capital point of view, we are estimated at 90 million inhabitants. The Congolese State has a duty to promote the training of the workforce and, above all, to specialize it.

The accumulation of human capital, capable of contributing to the country’s development, is an increasing function of the time devoted to education. That is, to the formation of human capital. It is formulated as follows: h,=S (l-u,) h.

Investment in human capital therefore includes expenditure on education, learning and training, which will enable companies to benefit from a skilled workforce, the one that should be part of an environment conducive to business development.

From a financial capital point of view, Congo has two choices. Either it self-finances its reconstruction, or it relies on the international financial community, while strengthening control over the allocation of mobilized capital to the reorganization of the factors of production, i.e., the creation of many jobs and decent wages for better consumption.

Indeed, if it happened that the Congolese State facilitated the task of private entrepreneurship, the only one capable of creating at least 500 million jobs and paying decent wages, that is, a minimum wage of 500 dollars per month, from which the State will receive only 50 dollars per month.

Let’s do the simplest calculation: let’s take 50 dollars that the State collects on the salary of each working Congolese and multiply by 50 million of the Congolese who receive 500 dollars, the State will have 2,500,00,000 dollars each month in its coffers. Multiply $2,500,000,000,000 by 12 months, the state will already have $30,000,000,000,000 in payroll taxes.

And when it adds DGRAD, DGI, DOUANE, DGM and other related tax services…..

The budget of the Democratic Republic of Congo can easily be estimated at between 60 and 70 billion US dollars.

Fiscal policy is the work of the Government through which it defines the policy that allows it to influence the country’s economy by using its power to set revenues and priorities in the allocation of public expenditure. It is therefore a means at its disposal to regulate the economy and carry out actions over economic cycles in order to achieve its objectives in both the social and economic fields.

The state, which has a good budget thanks to taxes, can reorganize and equip the intelligence services, the police, the army and the civil service. The State, which has more resources thanks to taxes, can carry out major public works by building hospitals, schools, prisons, bridges, etc.

The State which has more means thanks to taxes will pay civil servants and State agents decently. It could even give scholarships to humanities students.

On the condition that you remember one thing: ALL THAT IS UMPUNI IS PERMITTED.
When you have a patient, you should give him/her appropriate treatment instead of sedative.

The Congolese political class is specialized in numerous declarations and announcements in place of the debate in full responsibility on a good governance project, capable of restoring the broken economic balances, such as objective 80, the change of mentalities, the new citizenship etc.

Change of mentalities, a case of conscience….

« I am a teacher with an exceptional desire to change the mentality, I live in Bandalungwa and I work in N’djili… To get to my place of work, I have to use transport from my neighbours, my unpaid three-month rent, water, the electricity and the cost of my unpaid children… I arrive at school and take the exam for my 70 students… 40 succeed, 30 who have failed organize themselves, prepare the envelope and come to me, I Professor with an exceptional desire to change the mentality, they make me understand that they do not want to take the class again…« .

You give lessons in changing mentalities, instead of this Professor, which way will you look at it?

What I say for the teacher, I can also say for a civil servant, a law enforcement officer or a government official. We can only understand the present in order to build the future when we have a deep knowledge of the past.

Jean-Oscar Ngalamulume

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DRC: the « education » project will be submitted to the WB Board of Directors in February 2020

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DRC: Education project to be submitted to World Bank Board in February 2020

The Government’s emergency project on free « Basic Education » will be submitted to the World Bank’s Executive Board in February 2020. According to the Vice President for Africa, Hafez Ghanem, preparations are being intensified to ensure that this deadline is met.

« We are working very quickly on this education project. And we plan to bring this project to our Council as early as February. Regarding the height of the amount, we are in the process of making evaluations. It’s going to be a big amount, around a billion US dollars, » he told reporters at the end of his meeting with the Congolese delegation led by Finance Minister José Sele Yalaghuli.

Indeed, this emergency project is part of World Bank support for the Government’s efforts to provide free basic education, the implementation of which began last September.

To relieve the pressure on public finances to allocate at least US$25-37 million each month, the World Bank has pledged to support the Congolese Government in this regard.

https://twitter.com/Zoom_eco/status/1184909044315758593?s=20In line with the commitment of the Head of State, Felix Antoine Tshisekedi, and the President of the World Bank, David Malpass, the Minister of Finance, José Sele Yalaghuli, has clearly indicated the Congolese Government’s firm desire to see the process speed up so that funds are released within an acceptable time frame.

« This is the right time for the partners of DR Congo to match the real political will of the Congolese national executive to meet one of the aspects of the World Bank’s mandate, namely: the fight against poverty, » he said at a previous meeting with the World Bank delegation led by Jean-Christophe Carret.

With regard to the health coverage programme, Hafez Ghanem reiterated his institution’s commitment to continue working alongside the Democratic Republic of Congo, particularly in the fight against Ebola.

 

He added: « We will also work with the Government on a new health programme to strengthen basic health centres and improve access to health across the country. »

However, he gave no indication of the amount of funding for this health programme, especially since it is currently under study.

As a reminder, the delegations of DR Congo and the World Bank held a working meeting on Thursday 17 October 2019 in Washington DC. Experts from both sides, led by José Sele Yalaghuli and Hafez Ghanem respectively, reviewed ongoing projects within the World Bank portfolio and those under preparation.

In addition to education and health, projects related to infrastructure, connectivity (roads) and the digital economy were also discussed.

Eric TSHIKUMA, from Washington

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DRC: the three axes of the Accelerated Programme to Combat Poverty and Inequality

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DRC: the three axes of the Accelerated Programme to Combat Poverty and Inequality

The President of the Republic launched his Accelerated Programme to Combat Poverty and Inequality in Kinshasa on Wednesday 16 October at the site of my valley in the commune of Mongafula.

This Programme aims to ensure that twenty million Congolese living in rural and peri-urban areas in the 145 territories of our country leave poverty or extreme poverty within the next 5 years.

It has three components: improving rural and peri-urban populations’ access to basic socio-economic infrastructure and services; promoting rural and peri-urban economies; and building capacity in managing for development results at the national, provincial and local levels.

The first component aims to increase the population’s access to basic services such as housing, electricity through the promotion of micro hydroelectric power plants, drinking water, health and agricultural access roads. This list is not exhaustive.

The second component aims to ensure that people in villages and peri-urban neighbourhoods have improved and stable sources of income and that they consume at least one balanced meal per day. This component will place particular emphasis on promoting inclusive agricultural sectors.

The third component aims to develop a culture of autonomy, which will result in the appropriation of development by the beneficiary populations, the strengthening of self-esteem, meritocracy and a motivated attachment to their living environment.

Substantial resources for this ambitious program!

« The Programme, the main components of which I have just unveiled, requires ambitious funding over several years, » said Félix Tshisekedi, aware of these challenges. In the face of such an ambition, the Head of State asks the Government to spare no effort to explore all possible avenues likely to provide the means for this saving action for the people.

It is with this in mind that the last Council of Ministers adopted the hypothesis of a budget reaching the 10 billion mark.

In addition, Félix Tshisekedi intends to engage the country in far-reaching reforms ranging from the rebuilding of the state with justice as the epicentre to the sectors of national life.

This is how he makes his main focus the fight against anti-values, particularly corruption, embezzlement of public funds, tax fraud, smuggling and tribalism. And all means will be used to ensure that all State revenues are channelled into the Public Treasury.

Finally, to make this programme a success, the President of the Republic is counting on the involvement of all his compatriots, beyond the divisions.
political.

Harris Kasongo

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DRC: Economic and financial situation at the heart of a meeting at the World Bank

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DRC: Economic and financial situation at the heart of a meeting at the World Bank

The economic situation in DR Congo is the focus of a meeting on Thursday 17 October 2019 at the World Bank’s headquarters in Washington DC. The Minister of Finance, José Sele Yalaghuli, leads the delegation of Congolese experts.

In his presentation, the national silversmith described a macroeconomic framework for DR Congo that has remained stable.

Despite accumulated deficits of 420 billion Congolese francs at the end of September 2019, domestic prices and the exchange rate fluctuated slightly. And at this rate, the Government reports inflation of 4.2% at the end of December 2019, which is below the 7% end of period forecast level.

Referring to the strategic and political orientations of the Government of the Democratic Republic of Congo, Minister Sele Yalaghuli cited in particular the tightening of public spending in order to limit deficits and the subscription of treasury bonds with the ambition of mobilizing 150 billion CDF by the end of 2019 to fill the gaps.

The first results are promising, especially since a small monthly budget surplus was recorded at the end of September 2019.

Moreover, added Sele Yalaghuli, the third orientation concerns the Government’s firm commitment to pursue the implementation of reforms with the support of partners to remove obstacles sector by sector and to be able to remedy them.

With regard to cooperation between the Congo DR and the Bretton Woods institutions. After the break-up of the formal programme with the IMF in 2012, the ongoing recovery strategy of the current discussions is based on two options.

First, the interim program. Then, the formal program. If the first one will cover the preparation period of the second one, the conclusion of the formal programme could take place after the third quarter of 2020.

« This is the right time for the partners of DR Congo to match the real political will of the Congolese national executive to meet one of the aspects of the World Bank’s mandate, namely: the fight against poverty, » José Sele Yalaghuli said, addressing the World Bank delegation led by Jean-Christophe Carret.

With the World Bank, experts from DR Congo are working on preparations and options to initiate disbursement of funds for the Government’s priority sectors on are: basic education and universal health coverage.

This interaction with World Bank teams continued, with Hafez Ghanem, Vice President in charge of the Africa region, as the focus.

Eric TSHIKUMA, from Washington DC

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