PRESS BRIEFING ON THE ECONOMIC RECOVERY FUND FOR THE PRODUCTIVE SECTOR: THE CASE OF SMES, CRAFTSPEOPLE AND SOCIAL ECONOMY ACTORS

MINPMEESA > News > PRESS BRIEFING ON THE ECONOMIC RECOVERY FUND FOR THE PRODUCTIVE SECTOR: THE CASE OF SMES, CRAFTSPEOPLE AND SOCIAL ECONOMY ACTORS

Since the outbreak of the first cases of Covid-19 in Cameroon, the Government, under the leadership of Prime Minister Chief Dr Joseph DION NGUTE and in application of the Instructions of the Head of State, His Excellency Paul BIYA, has taken a number of measures to curb the health and socio-economic effects of this pandemic in Cameroon. Consequently, the measures taken to mitigate the spread of the virus on 17 March 2020 include the closure of Cameroon’s land, air and sea borders; the closure of training institutions and the reduction of opening hours of commercial establishments; the prohibition of gatherings of more than fifty (50) people; and the prohibition of overloading in public transport.

The easing measures of 30 April 2020 aimed, for their part, at supporting the national economy and relieve the most affected sectors. Among the nineteen (19) measures, were the suspension for the 2nd quarter of the 2020 general accounting audits, except in cases of suspicious tax behaviour; the granting of moratoria and payment deferrals to companies directly affected by the crisis while suspending forced recovery measures against them; support to the cash flow of companies through the allocation of a special envelope of CFAF 25 billion, for the clearance of stocks of VAT credits awaiting reimbursement; the postponement to 30 September 2020 of the deadline for the payment of property tax for the 2020 financial year; the total deductibility for the determination of corporate tax of donations and gifts granted by companies for the fight against the COVID-19 pandemic; the exemption for the second quarter of the withholding tax and municipal taxes (market place duty, etc.); for the benefit of small food retailers (bayamsellam); the continued pay, during the months of May, June and July, of family allowances to company staff who were not able to pay social security contributions or who have put their staff on technical leave because of the economic downturn, particularly in the restaurant, hotel and transport sectors; an increase in the level of family allowances from CFAF 2,800 to CFAF 4,500; a 20% increase in the level of old pensions that did not benefit from the automatic revaluation that occurred as a result of the 2016 reform, etc.

Multi-stakeholder consultations, bringing together representatives of the public and private sectors were conducted under the leadership of the Prime Minister, Head of Government, to lay the foundations for sustainable State’s support to the national economy. It is in this context that the response process was part of the design and implementation of a response strategy to the Covid-19, combining health measures and economic and social support measures.

Thus, on31 March 2020, the Head of State decided to set up a National Solidarity Fund for the fight against Covid-19: CFAF 1 billionwas injected as seed capital fund to finance operations under the response strategy to the spread of the pandemic in Cameroon. This national solidarity fund, sustained by contributions from the Cameroonian State, development partners, and Cameroonian natural and legal persons, has been progressively endowed with resources that culminate at CFAF 180 billionfollowing the Budgetary Collective of 3 June 2020 resulting from the Ordinance signed by the Head of State. These resources, therefore, contribute to the implementation of the response which was centred around four pillars, namely the strengthening of the health system; the economic and financial resilience; the strengthening of research and innovation; and the social resilience and strategic procurement.

Therefore, Decree No. 2020/3221/PM of 22 July 2020 of the Prime Minister, Head of Government distributed this Special National Solidarity Fund based on the above-mentioned four pillars and as such, among the administrations in charge of articulating the response to the economic activity slowdown, MINPMEESA has been allocated a budget of CFAF 2 billion to provide support to craftspeople and social economy actors, or CFAF 1.5 billionin favour of entrepreneurs and pandemic-stricken enterprises and up to CFAF 500 million for SMEs that produce hydro-alcoholic gels and face masks.

This allocation aimed at supporting SMEs, craftspeople and social economy actors represents one more effort within the framework of the sacrifices made by the State to keep the productive sector of our country afloat. It should be recalled that the 18 measures made public on 30 April 2020 have been estimated at CFAF 114 billion and the support to very small producers of the Ministry of Small and Medium-sized Enterprises, Social Economy and Handicrafts is also added to a whole series of measures taken in favour of SMEs. The latter also aims at supporting enterprises, notably through the Ministry of Economy, Planning and Land Management (MINEPAT) which is the depository of CFAF 10 billion for business support; the Ministry of Mines, Industry and Technological Development (MINMIDT) which has been provided with CFAF 1 billion for the strengthening of the production capacities of local pharmaceutical industries ; the Ministry of Agriculture and Rural Development (MINADER) to support small agricultural enterprises and small producers in the rice, corn, millet, organic fertiliser and seed production sectors to the tune of CFAF 6 billion; the Ministry of Livestock, Fisheries and Animal Industries (MINEPIA) with an allocation of CFAF2 billion to support production in the fish, chicks, small ruminants, eggs, piglets and fry sectors; the Ministry of Women Empowerment and Family (MINPROFF) for the production of masks in the 360 councils, for the acquisition and distribution of equipment and agro-pastoral inputs for the benefit of 3,600 women for an amount of CFAF 1.5 billion and finally, the Ministry of Tourism and Leisure (MINTOUL) which received an allocation of CFAF1, 7 billion  of which CFAF190 million made available to Very Small Enterprises and Small and Medium-sized Enterprises in the catering sector to face the difficulties linked to the economic slowdown following the Covid-19. Other types of financing are added to this envelope made available to Very Small Enterprises and SMEs. BGFI BANK through its Cameroonian subsidiary has made available to the Ministry of Finance (MINFI) on 1 September 2020, a financing line of CFAF 10 billion to support SMEs and boost the recovery of their activities.

ECONOMIC RECOVERY FUND FOR THE PRODUCTIVE SECTOR ALLOCATED TO MINPMEESA

The Ministry of Small and Medium-sized Enterprises, Social Economy and Handicrafts, within the framework of the Economic and Financial Resilience Programme, is in charge of setting up an Economic Recovery Fund to the tune of CFAF2 billion for the benefit of the productive sector. It is worth recalling that the support of craftspeople and actors of cooperative societies manufacturing handicraft masks and hydro-alcoholic gels amounts to CFA F 500 million, while direct support to high potential SMEs strongly affected amounts to CFA F1.5 billion.

Fair and rigorous eligibility conditions

SME promoters, craftspeople and Social Economy organisations in the ten (10) regions of Cameroon are all eligible for support from the Special National Solidarity Fund for the fight against COVID-19. This support aims at meeting exclusively the needs of inputs in order to increase their production and/or improve the quality of their products; technical equipment and/or tools with a view to strengthening their technical capacities; and financing in order to strengthen the financial capacity of their units.

To be eligible, SMEs are entitled to justify a legal existence and be a member of an umbrella organisation; operate in sectors that have been strongly impacted by the Coronavirus pandemic, such as the processing of local products, the digital economy and the production of media for events; operate effectively and continuously since at least the beginning of the 2019 financial year; having recorded a significant decrease in activity compared to the 2019 financial year during the period of implementation of government measures against the spread of the Coronavirus.

Craftspeople and handicraft enterprises shall be registered in a Handicraft Communal Office (HCO) for at least three (3) years; be from the textile or cosmetics sector; be a member of a professional association, a professional organisation or an inter-professional organisation in the handicraft sector; be up to date with its contributions to the tax authorities (withholding tax) and prove that they are members of the National Social Insurance Fund (NSIF); have at least three (3) years’ seniority in the trade; prove of at least three (3) years’ payment of the tax at source; identify its markets; work in the manufacture of handicraft masks and hydro-alcoholic gels; justify, where applicable, training courses relating to Cameroonian standards for the manufacture of face masks (NC2970) or hydro-alcoholic gels (NC2982).

Social Economy Organisations shall prove their legal existence; be a member of a professional association, a professional organisation or an inter-professional organisation in the Social Economy sector; carry out an income-generating and job-creating activity in the manufacture of masks and/or the production of hydro-alcoholic gels; justify, where applicable, training courses relating to Cameroonian standards for the manufacture of face masks (NC2970) or hydro-alcoholic gels (NC2982).

Transparency in the selection

At the end of the application process, for which the documents to be provided vary from one sector of activity to another, applicants are entitled to fill in the support application forms, which can be obtained from MINPMEESA’s central services, regional and divisional delegations or downloaded from the MINPMEESA website www.minpmeesa.gov.cm. A user guide has been developed to serve this purpose. Candidates shall have a period of thirty (30) days, from the date of publication of the Call for Applications, to submit their complete application files to the MINPMEESA’s divisional and regional delegations against receipt. After the pre-selection of candidates carried out by the regional ad hoc committees, the files shall be forwarded with a reasoned opinion to the “Task Force” housed in the central services of MINPMEESA; the Task Force shall consolidate the results and forward the list of selected enterprises and their files to MINFI; At the end of the selection process, the Minister of Small and Medium-sized Enterprises, Social Economy and Handicrafts shall officially release the list of enterprises definitively selected.

Direct support and rigorous accountability

Support granted to SMEs, craftspeople and SEOs are direct support. This support shall be exclusively in cash and shall be made payable to the SME promoter, craftspeople and SEOs concerned or their duly authorised representatives. Nevertheless, at the end of the selection process, the beneficiaries of direct support are entitled to produce an expenditure account in triplicate addressed to the Minister of Small and Medium-sized Enterprises, Social Economy and Handicrafts. The modalities of control and monitoring-evaluation of the use of the resources allocated within the framework of the Fund will be specified in Specifications signed by the Minister of Small and Medium-sized Enterprises, Social Economy and Handicrafts.

Moreover, MINPMEESA shall act in this process as the Government’s adviser in the selection of actors whose files will be forwarded to the Ministry of Finance (MINFI) for commitments and the provision of resources to beneficiaries. It is in this capacity that it specifies the conditions of access to these resources through this press briefing during which it makes available to journalists the support guide which has been prepared for this purpose, and which indicates the terms and conditions of identification and access of SMEs to the said resources.

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