Identifier
Created
Classification
Origin
08CONAKRY317
2008-06-25 10:03:00
UNCLASSIFIED
Embassy Conakry
Cable title:  

KOUNDARA - ECONOMIC ACTIVITY AND COMMENTS ON THE EXPORT

Tags:  ECON PGOV EAGR ETRD PREL GV 
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VZCZCXRO2782
RR RUEHMA RUEHPA
DE RUEHRY #0317 1771003
ZNR UUUUU ZZH
R 251003Z JUN 08
FM AMEMBASSY CONAKRY
TO RUEHC/SECSTATE WASHDC 2685
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
UNCLAS CONAKRY 000317 

SIPDIS

E.O. 12598: N/A
TAGS: ECON PGOV EAGR ETRD PREL GV

SUBJECT: KOUNDARA - ECONOMIC ACTIVITY AND COMMENTS ON THE EXPORT
BAN

UNCLAS CONAKRY 000317

SIPDIS

E.O. 12598: N/A
TAGS: ECON PGOV EAGR ETRD PREL GV

SUBJECT: KOUNDARA - ECONOMIC ACTIVITY AND COMMENTS ON THE EXPORT
BAN


1. (U) SUMMARY: In a visit to the northern town of Koundara the week
of June 2, LES Asst Econoff met with local authorities, civil
society organizations, and customs agents to discuss general
economic activity and Guinea's agricultural export ban. Koundara is
a major agricultural producer as well as a commercial junction
between Senegal and the rest of Guinea. END SUMMARY.

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ECONOMIC ACTIVITY
--------------


2. (U) Koundara is primarily an agricultural zone producing rice,
peanuts, corn, millet, sorghum, fonio (local grain) and fruit. The
livestock of Koundara is estimated at 110,000 cattle for a
population of 106,000 inhabitants. As the main junction between the
Senegal and the rest of Guinea, many other Guinean agricultural
products are exported through Koundara such as palm oil, fruits, and
potatoes. The main commercial transactions take place in the weekly
markets of Koundara - Sarebhoedo, Termesse, Youkounkoun and Sambailo
- which supply the Diawbe market (Senegal),one of the biggest
weekly markets in the sub region. As the banking sector is
virtually non-existent, most financial transactions are done using
traditional methods, such as buying and selling directly using cash
or bartering. There is one savings bank that provides small loans.

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EXPORT BAN
--------------


3. (U) According to Toumany Sangare, Director of the Koundara
Customs, Koundara is the largest import-tax revenue collector after
the ports of Conakry and Kamsar, collecting around 6 billion GNF
($1.33 million) for fiscal year 2007. As a result, the export ban
instituted by former Prime Minister Kouyate a few months ago has had
a substantial impact on the population and economy of Koundara.
Local authorities in favor of the ban argue that it will increase
local purchasing power. However, according to some others, the ban
has not lowered prices in local markets because banned goods are
being smuggled to neighboring countries (Senegal and Guinea Bissau).



4. (U) According to Aicha Toure, a leading businesswoman and member
of Koundara's Civil Society Council, the ban has negatively affected
the population. She said that since the ban entered into force, many
businesses have been forced to close and many construction projects
have stopped.


5. (U) The Director of the Koundara Customs office, Mr. Toumany
Sangare, said that the export ban is merely a political move, and it
violates international, regional and sub-regional trade agreements.
He added that last year's ban affected many businesses in Koundara.
He reported that in 2007, at the early implementation stages of the
export ban, 13 trucks carrying approximately 20 tons each of kola
nuts were stopped at the border, and the entire shipment ended up
spoiling as it sat in the extreme heat. He also noticed that some
businesses have closed, and there is less vehicle traffic in
Koundara and neighboring sous prefectures. Mr. Sangare thinks that
the ban will deeply affect the Guinean economy, because neighboring
countries such as Ivory Coast, Sierra Leone, and Liberia are
capitalizing on Guinea's ban in order to fill market niches formerly
held by Guinean business people.

--------------
COMMENT
--------------


6. (U) There appears to be a mixed reaction in Koundara to the
Government of Guinea's agricultural export ban. While farmers and
businesses dealing with agricultural products are opposed to the
export ban, local authorities are in favor, arguing that the ban
will help bring down prices for consumers. Contacts could not
provide any evidence of prices actually falling, as anticipated by
the GoG. However, it was clear that some goods are being smuggled
across the border in order to get around the export ban. END
COMMENT.

CARTER