DRC PARLIAMENT DEBATES 2007 BUDGET

UNCLAS KINSHASA 000588

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON PGOV CG
SUBJECT: DRC PARLIAMENT DEBATES 2007 BUDGET



1. (U) The DRC's 2007 budget is currently before the National
Assembly. Members debated the budget May 29 and 30, and a
final vote is expected in the coming weeks.


2. (SBU) The proposed budget of approximately USD 2.14
billion projects domestic revenue of about USD 1.2 billion -
60 percent of the total, external funding of about USD 890
million and an estimated funding gap of about USD 87 million.
(Comment: The figure of USD 890 million in external funding
is an optimistic projection, and the GDRC has not received a
commitment of this amount. End comment.)


3. (U) Nearly one-third of the expenditures - about USD 671
million - are budgeted to service external debt, while about
USD 54 million is budgeted for programs in President Kabila's
five priority development categories. The budget projects a
GDP of 6.5 percent, average inflation of 8.8 percent, and an
average exchange rate of 560 Congolese francs per USD.


4. (SBU) Several parliamentary groups, including some in the
AMP alliance, have criticized the budget, according to
contacts within Parliament and MONUC. Opposition party
groups, including the MLC, have publicly declared the budget
"unacceptable" and called for its rejection. Passage of the
budget will be an important test for the AMP and the
government of Prime Minister Gizenga.


5. (U) The Assembly has not set a final voting date, but it
will not likely occur earlier than mid-June. IMF officials,
who have provided technical assistance in drafting the
budget, do not expect the Parliament to pass the budget
before the end of June. (Note: The regular session of
Assembly ends June 15, and an extraordinary session is
expected to begin June 25. End note.)


6. (U) The Prime Minister is scheduled to respond on June 2
to questions about the budget that Members of Parliament have
submitted to the government. Following that discussion, the
Assembly will vote on the current draft. The Parliament's
Economic and Financial Commission will then will then review
and amend the draft as necessary and return it to plenary for
a final vote. If the Assembly approves the budget, it must
also harmonize its version with that of the Senate before
sending it to the President for promulgation.

Comment
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7. (U) The Parliament is certainly feeling pressure from
numerous sources to finally approve a national budget. Plans
for the DRC's donor Consultative Group meeting, tentatively
scheduled for June 20-22 in Kinshasa, is one source of
pressure, but prospects are not good that a final budget will
emerge by the date. The presence of an IMF team, in Kinshasa
until June 7, is also helpfully adding to that pressure.
Whatever the result, however, few Congolese will be pleased,
given the meager revenues available to accomplish an enormous
variety of publicly-demanded tasks. End comment.
MEECE