LIBERIA: DRAFT BUDGET CONTINUES ON RIGHT TRACK

UNCLAS MONROVIA 000409 SENSITIVE SIPDIS DEPARTMENT PASS USTR FOR CONNIE HAMILTON DEPARTMENT FOR AF/EPS POTASH AND AF/W DAVIS TREASURY FOR RICHARD HALL E.O. 12958: N/A TAGS: EFIN ECON LI SUBJECT: LIBERIA: DRAFT BUDGET CONTINUES ON RIGHT TRACK ¶1. (U) Liberia's $277 million draft budget for 2008-09 provides a 38.8% increase over last year, with the focus on supporting poverty reduction and specific emphasis on boosting civil service salaries and funding education. (Note: All amounts are in US dollars. End note.) It is divided into a "core" budget of $249 million, which will come from reliable revenue streams, and a "contingent" budget of $28 million from more sporadic sources. The core revenue sources are further divided into recurrent ($213 million) and non-recurring/one-time ($36 million). Budget Director Augustine Nguafua presented the draft budget to the legislature May 20. As of May 23, neither legislators nor post had received a copy. We are told it will be posted on GOL websites next week. ¶2. (U) The headline item is a 27% increase in civil servant salaries, to a minimum of $70 per month up from $55 per month currently. This is the fourth increase of the Sirleaf administration. (Comment: We have heard $200 a month as the range at which a salary could be considered a living wage. End comment.) The Budget Director's presentation also highlighted the 9.8% of the budget ($27 million) dedicated to the Ministry of Education, which received the largest overall allocation. Other major allocations are listed at end. ¶3. (U) Press reports have also noted that the budget allocates $3 million to the repair of the Executive Mansion, of which $2 million is contingency funds. A further $1 million in core funding is proposed for refurbishment of other GOL buildings, with anther $3 million from the contingent budget. (Note: The government is undertaking to move ministries from rented facilities to government-owned property. End note.) One paper noted the lack of revenue from the Liberia Petroleum Refinery Company and Roberts International Airport, indicating continuation of the debate over whether these agencies should accumulate revenue to pay for needed improvements or contribute more to the overall budget. The Budget Director noted that payment of dividends implies a profit, but these entities have steep expenditure requirements. The Liberia Petroleum Refining Company director recently stated that his SOE made in excess of $7 million last year. ¶4. (SBU) Comment: We anticipate a smoother budget process as GEMAP "capacity building" shows results and the GOL becomes more familiar with budget procedures. The Speaker of the House thanked the Budget Director for the timely submission, noting it would give legislators time to consider the budget before the June 30 end of the fiscal year. If early articles are any indication, efforts to educate the press on economic issues is resulting in more thorough and informed coverage of budget issues. We will see if the executive branch ministries and agencies follow up on the timely submission by preparing procurement requests in advance, rather than waiting until after the budget is passed. End Comment. ¶5. (U) Other spending -------------- "Community" $23 million 8.7% Ministry of Public Works $22 million 7.9% Health and Social Welfare $20 million 7.3% (Note: "Community" is undefined, but we believe it relates to funding development projects outside Monrovia. End note.) BOOTH