Identifier
Created
Classification
Origin
06LIBREVILLE486
2006-07-24 12:24:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Libreville
Cable title:
GABON'S REVISED BUDGET MIRRORS IMF GUIDANCE
how-toVZCZCXYZ0001 PP RUEHWEB DE RUEHLC #0486 2051224 ZNR UUUUU ZZH P 241224Z JUL 06 FM AMEMBASSY LIBREVILLE TO RUEHC/SECSTATE WASHDC PRIORITY 9235 INFO RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS LIBREVILLE 000486
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EFIN GB
SUBJECT: GABON'S REVISED BUDGET MIRRORS IMF GUIDANCE
REF: A. LIBREVILLE 446
UNCLAS LIBREVILLE 000486
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EFIN GB
SUBJECT: GABON'S REVISED BUDGET MIRRORS IMF GUIDANCE
REF: A. LIBREVILLE 446
1. (SBU) Summary: The Gabonese legislature is expected to
act shortly to approve the state's revised budget. The
Minister of Finance described the new budget as addressing
the IMF's concerns (reftel) and said it was a critical
step for securing a three year program with the Fund. The
IMF representative in Gabon says the budget looks good on
paper, but the key will be the GoG's ability to execute
it. End Summary
2. (U) On July 12, 2006, the Council of Ministers approved
and forwarded to the National Assembly the state's revised
2006 budget, which includes revenues and spending of about
CFA 1,629.9 billion, or about $3.1 billion. Sixty-five
percent of revenues are from the oil sector and 35% from
non-oil activities. About 41% of expenditure is dedicated
to operating expenses, 12% is for investment, 7% is
interest on the national debt, and 31% is dedicated to
repaying principal on Gabon's debt. The remaining 8%
includes loans and advances. Of particular interest to
the IMF is the fact that this budget includes CFA 110
billion (about $212 million) in subsidies for petroleum
products. Price controls at the refinery have created an
implicit subsidy, but it has never before appeared
explicitly in the GoG's budget. The Finance Minister
explained the budget's objectives as decreasing the non-
oil deficit, improving the management of public finances,
and accelerating structural reform to improve the business
climate.
3. (SBU) Although the budget increases expenditures
sharply above the level in the budget presented at the
beginning of the year, all parties knew the initial budget
was a placeholder with unrealistically low spending and
revenue projections. According to IMF Resident
Representative, Richard Randiamaholy, this revised budget
is fully consistent with IMF priorities. The key,
however, will be how the revised budget is implemented.
WALKLEY
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EFIN GB
SUBJECT: GABON'S REVISED BUDGET MIRRORS IMF GUIDANCE
REF: A. LIBREVILLE 446
1. (SBU) Summary: The Gabonese legislature is expected to
act shortly to approve the state's revised budget. The
Minister of Finance described the new budget as addressing
the IMF's concerns (reftel) and said it was a critical
step for securing a three year program with the Fund. The
IMF representative in Gabon says the budget looks good on
paper, but the key will be the GoG's ability to execute
it. End Summary
2. (U) On July 12, 2006, the Council of Ministers approved
and forwarded to the National Assembly the state's revised
2006 budget, which includes revenues and spending of about
CFA 1,629.9 billion, or about $3.1 billion. Sixty-five
percent of revenues are from the oil sector and 35% from
non-oil activities. About 41% of expenditure is dedicated
to operating expenses, 12% is for investment, 7% is
interest on the national debt, and 31% is dedicated to
repaying principal on Gabon's debt. The remaining 8%
includes loans and advances. Of particular interest to
the IMF is the fact that this budget includes CFA 110
billion (about $212 million) in subsidies for petroleum
products. Price controls at the refinery have created an
implicit subsidy, but it has never before appeared
explicitly in the GoG's budget. The Finance Minister
explained the budget's objectives as decreasing the non-
oil deficit, improving the management of public finances,
and accelerating structural reform to improve the business
climate.
3. (SBU) Although the budget increases expenditures
sharply above the level in the budget presented at the
beginning of the year, all parties knew the initial budget
was a placeholder with unrealistically low spending and
revenue projections. According to IMF Resident
Representative, Richard Randiamaholy, this revised budget
is fully consistent with IMF priorities. The key,
however, will be how the revised budget is implemented.
WALKLEY