PRESIDENT APPROVES FINAL 2008 BUDGET

UNCLAS CONAKRY 000037 SIPDIS DEPT PLEASE PASS TO USTR FOR LAURIE ANN AGAMA COMMERCE FOR SALIHA LOUCIF SIPDIS SENSITIVE E.O. 12598: N/A TAGS: ECIN EFIN ECON EMIN PGOV GV SUBJECT: PRESIDENT APPROVES FINAL 2008 BUDGET REFTEL: A) CONAKRY 1138 B) CONAKRY 1161 ¶1. (SBU) SUMMARY. At the end of December, President Conte signed the 2008 budget, with only slightly different figures from the original budget submitted by the Prime Minister in October. END SUMMARY. ¶2. (SBU) On December 27, President Conte signed Guinea's 2008 budget, improving over the 2007 budget process by six months. As background, the budget process begins with the Prime Minister preparing a budget and submitting it to the National Assembly. The legislature can then change the figures proposed by the PM, both spending and revenue. After the National Assembly approves the budget, it is sent to the Office of the President for further review and changes. Last year, the budget was not signed until June. ¶3. (SBU) The final budget figures are similar to those proposed by Prime Minister Kouyate. (REFTELS) For example, the final budget still assumes an exchange rate of 5,200 GnF to 1 USD, implying a projected 22% fall in the value of the Franc. ¶4. (SBU) Guinea's FY2008 internal receipts are projected at US $638,168,153. FY2008 spending is projected at US$941,346,863, a 68% increase over FY2007. (NOTE: Spending in the FY2008 budget originally submitted by the PM projected just a 38% increase. END NOTE.) The budget deficit is projected to be US$303,178,710. ¶5. (SBU) The final 2008 budget also provides hard figures for calculating the burden of external debt service. Projected interest and principle payments consume 57% of anticipated government revenue. ¶6. (SBU) COMMENT. The FY2008 budget is the first for PM Kouyate, and as such, will provide insight into the PM's programs and priorities. However, the 30% increase in spending is a 'gift' from the National Assembly and/or the Office of the Presidency. Notably, no one matched the increase in spending with additional revenues. Post is now hearing of a campaign from the old guard at the Presidency that criticizes Kouyate for having the largest deficit in Guinea's history. Post has only secured the final budget summary and has not yet been able to secure a copy of the line item final budget. Post will provide detailed analysis when the line item budget becomes available, and perhaps be able to identify who 'gave' the gift to Kouyate. END COMMENT. CARTER