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WEEKLY NEWSLETTER
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Ivory Coast
Index
Hotel at Abidjan
Courtesy Eszti Votaw
Public spending was handled under two different
budgets: the
Ordinary Budget (Budget Ordinnaire) for current government
expenditures, which were generally covered by domestic
revenues,
and the Special Investment and Capital Equipment Budget
(Budget
Special d'Investissement et d'Equipement--BSIE), which
partly
depended on foreign investment. The BSIE had two parts:
the BSIETreasury (BSIE-Tresor or BSIE-T), which was financed by
surpluses
from the Ordinary Budget, levies on business profits and
farm
incomes, and borrowing through bonds issued by the CAA;
and the
BSIE-CAA, which was funded by foreign borrowing.
The size of each budget reflected the state of the
economy. The
Ordinary Budget grew by an average of more than 20 percent
from
1976 to 1980 and then by an average of about 11 percent
per year in
1980, 1981, and 1982. By 1983, however, the deteriorating
economy
and consequent decline in tax receipts prompted the
government to
implement a series of austerity measures. Cuts were
initially
limited to the BSIE, which fell from CFA F277.6 billion in
1980 to
CFA F239.1 billion in 1984 and then fell dramatically to
101.8
billion in 1985. In 1984 the government cut the Ordinary
Budget for
the first time, by 1.5 percent from the previous year. The
government reduced the number of foreign technical
assistants,
froze civil service salaries, and sold one-quarter of the
official
fleet of 12,000 automobiles.
In 1986, after three years of severe austerity, higher
commodity prices increased revenues and, in turn, allowed
both
budgets to expand. Budgeted expenses rose by 8.6 percent,
with most
of the increase in the BSIE, where allocations were
increased by
13.7 percent. More than a third of these allocations went
toward a
road building plan cofinanced by the World Bank.
Agricultural
diversification was the second largest beneficiary. A 3.7
percent
increase in the Ordinary Budget again permitted civil
service
promotions following a protracted wage and hiring freeze.
The period of budgetary expansion, however, was brief.
In 1987
coffee and cocoa prices again dropped, resulting in a 5.2
percent
cut in the 1987 BSIE and an additional 19.8 percent cut in
the 1988
BSIE. For the second year in a row, the BSIE did not
receive any
funds from the CSSPPA, the agency that marketed the bulk
of Côte
d'Ivoire's coffee and cocoa. In 1987 the largest share of
BSIE
funding, amounting to CFA F85.8 billion, came from
multilateral
donor agencies (CFA F44 billion). Bilateral
creditors--including
France, Japan, Britain, the United States, and the Federal
Republic
of Germany (West Germany)--provided CFA F16.2 billion, and
commercial creditors provided CFA F25.6 billion.
Meanwhile,
domestically generated revenue for the BSIE was set to
increase
from the 1987 level of CFA F38.8 billion to CFA F 57.8
billion in
1988. The increase, however, represented only the
inclusion of
funds previously classified as extrabudgetary.
The 1987 overall budget increased by a modest 4.8
percent and
the 1988 budget by 2.6 percent. These increases were
primarily the
result of an increase in revenue from taxes on income,
imports,
fuel, agricultural products, and municipality receipts.
But because
of an annual inflation rate of approximately 7 percent, it
was
expected that real spending in 1988 would fall. Debt
rescheduling
agreements did not affect the budget because the
government
considered debt service to be outside the main budget
calculation.
Data as of November 1988
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