(2020-09) Prime Minister's Budget Framework Letter for FY2020-2021
Summary — Memorandum from the Prime Minister to all spending-unit authorizing officers setting the macroeconomic and fiscal policy framework for the FY2020-2021 budget. It reviews the deteriorated FY2019-2020 fiscal and monetary situation (COVID-19, 'Peyi Lok' unrest, gourde depreciation, inflation) and lays out the priority axes for the coming budget.
Key Findings
- FY2019-2020 revenue reached 69.2 billion gourdes over ten months (77.5% execution, 4.6 billion gourde cumulative shortfall).
- Expenditure reached 79.8 billion gourdes (54.7% execution), including 9.4 billion in investment spending, 7.1 billion of it COVID-19 related.
- Monetary financing hit 35.4 billion gourdes by end-July 2020, over 20 billion of it subsidizing energy (EDH and petroleum products).
- The gourde depreciated 25% on average over the first ten months of the fiscal year while inflation rose from 20.1% (Sep 2019) to 25.7% (Jul 2020).
- FY2019-2020 GDP is projected to contract 2.9% (revised up from an initial -3.6% forecast) with end-period inflation projected at 26.9%.
- The Post-COVID-19 Economic Recovery Plan (PREPOC 2020-2023) is structured around six pillars and two cross-cutting areas, targeting sustained inclusive growth and job creation by 2023.
Full Description
This memorandum, issued by the Office of the Prime Minister to all authorizing officers (ordonnateurs) of state institutions, transmits the Lettre de cadrage for the preparation of the FY2020-2021 budget, under the May 2016 law governing the budget process. It reviews a difficult FY2019-2020: recurrent 'Peyi Lok' socio-political unrest that paralyzed activity in the first quarter, followed by the COVID-19 pandemic, which worsened public finances (revenue shortfalls combined with higher COVID-related spending) and market pressures. Over the first ten months of FY2019-2020, revenue reached 69.2 billion gourdes (77.5% execution rate, +6% nominal y/y but below inflation, leaving a cumulative shortfall of 4.6 billion gourdes), while expenditure reached 79.8 billion gourdes (54.7% execution, +32% nominal y/y), including 9.4 billion gourdes of investment spending (7.1 billion of which for COVID-19 response). Monetary financing reached 35.4 billion gourdes by end-July 2020 (over 20 billion used to subsidize the energy sector, notably EDH and petroleum products), alongside 6.8 billion gourdes in net Treasury bill issuance. The gourde depreciated 25% on average over the first ten months of the fiscal year, and inflation accelerated from 20.1% (September 2019) to 25.7% (July 2020). End-of-year projections for FY2019-2020 point to GDP contraction of 2.9% (revised from an initial -3.6%), end-of-period inflation of 26.9% (22.9% average), revenue of about 85.1 billion gourdes (95% of the initial budget target), current expenditure capped near 105.4 billion gourdes, and total non-grant expenditure of 117.9 billion gourdes against 85.1 billion in domestic revenue, producing a financing gap of 32.8 billion gourdes to be covered by 9.7 billion gourdes in net T-bill issuance and BRH financing kept below 43.9 billion gourdes.
Notes
Cover page is undated ('Le Premier Ministre' letterhead, no explicit date line visible); publication month inferred as 2020-09 from internal references to events through 30 August 2020 (BRH FX intervention announcement, arrete du 30 aout 2020) and 31 July 2020 monetary-financing data being the most recent cited figures. Issuer is the Primature (Prime Minister's Office), not MEF, though the memo is addressed to budget-managing institutions and heavily references MEF-BRH coordination; organization field set to Primature per the letterhead, and doc_id/filename retain the mef- prefix from the original batch naming.