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Ivory Coast Table of Contents

Ivory Coast



Hotel at Abidjan
Courtesy Eszti Votaw

Public spending was handled under two different budgets: the Ordinary Budget (Budget Ordinnaire) for current government expenditures, which were generally covered by domestic revenues, and the Special Investment and Capital Equipment Budget (Budget Special d'Investissement et d'Equipement--BSIE), which partly depended on foreign investment. The BSIE had two parts: the BSIETreasury (BSIE-Tresor or BSIE-T), which was financed by surpluses from the Ordinary Budget, levies on business profits and farm incomes, and borrowing through bonds issued by the CAA; and the BSIE-CAA, which was funded by foreign borrowing.

The size of each budget reflected the state of the economy. The Ordinary Budget grew by an average of more than 20 percent from 1976 to 1980 and then by an average of about 11 percent per year in 1980, 1981, and 1982. By 1983, however, the deteriorating economy and consequent decline in tax receipts prompted the government to implement a series of austerity measures. Cuts were initially limited to the BSIE, which fell from CFA F277.6 billion in 1980 to CFA F239.1 billion in 1984 and then fell dramatically to 101.8 billion in 1985. In 1984 the government cut the Ordinary Budget for the first time, by 1.5 percent from the previous year. The government reduced the number of foreign technical assistants, froze civil service salaries, and sold one-quarter of the official fleet of 12,000 automobiles.

In 1986, after three years of severe austerity, higher commodity prices increased revenues and, in turn, allowed both budgets to expand. Budgeted expenses rose by 8.6 percent, with most of the increase in the BSIE, where allocations were increased by 13.7 percent. More than a third of these allocations went toward a road building plan cofinanced by the World Bank. Agricultural diversification was the second largest beneficiary. A 3.7 percent increase in the Ordinary Budget again permitted civil service promotions following a protracted wage and hiring freeze.

The period of budgetary expansion, however, was brief. In 1987 coffee and cocoa prices again dropped, resulting in a 5.2 percent cut in the 1987 BSIE and an additional 19.8 percent cut in the 1988 BSIE. For the second year in a row, the BSIE did not receive any funds from the CSSPPA, the agency that marketed the bulk of Côte d'Ivoire's coffee and cocoa. In 1987 the largest share of BSIE funding, amounting to CFA F85.8 billion, came from multilateral donor agencies (CFA F44 billion). Bilateral creditors--including France, Japan, Britain, the United States, and the Federal Republic of Germany (West Germany)--provided CFA F16.2 billion, and commercial creditors provided CFA F25.6 billion. Meanwhile, domestically generated revenue for the BSIE was set to increase from the 1987 level of CFA F38.8 billion to CFA F 57.8 billion in 1988. The increase, however, represented only the inclusion of funds previously classified as extrabudgetary.

The 1987 overall budget increased by a modest 4.8 percent and the 1988 budget by 2.6 percent. These increases were primarily the result of an increase in revenue from taxes on income, imports, fuel, agricultural products, and municipality receipts. But because of an annual inflation rate of approximately 7 percent, it was expected that real spending in 1988 would fall. Debt rescheduling agreements did not affect the budget because the government considered debt service to be outside the main budget calculation.

Data as of November 1988