Bloomberg News

Ivory Coast to Boost 2011 Budget by 5% as Economy Contracts

June 23, 2011

(Updates with economic contraction projection in second paragraph.)

June 23 (Bloomberg) -- Ivory Coast’s government approved a 3.05 trillion CFA franc ($6.6 billion) budget for 2011, a 5 percent increase from a year earlier even as the strife-hit economy contracts, said government spokesman Bruno Kone.

The economy of the world’s top cocoa grower will shrink by 6.3 percent in the year following a 4 1/2-month post-election crisis that shuttered financial institutions and halted cocoa and coffee exports. Growth in 2010 was 2.7 percent, Kone said in a statement on state television yesterday.

The spending plan is the first for President Alassane Ouattara, the winner of a November election that saw ex-leader Laurent Gbagbo refuse to cede power. As many as 3,000 people were killed, according to the International Criminal Court, which may investigate alleged war crimes committed by supporters of both men, it said in an e-mailed statement today.

Ivory Coast expects to earn 224 billion CFA francs from crude oil and natural gas and 437 billion CFA francs from debt restructuring and budget support from the World Bank, the International Monetary Fund, the African Development Bank, the French Development Agency and the West African Monetary Union, Kone said.

The government will spend on servicing debt and state employees’ wages, he said, without giving figures. As much as 840 billion CFA francs will be spent on rural development including electricity and education, Kone said. Another 340 billion CFA francs will go toward investment expenses, he said, without giving details.

Ivory Coast’s defaulted 2.5 percent Eurobonds, due 2032, declined for a second day, falling 1 percent to 52.875 cents on the dollar. The yield rose to 12.985 percent by 5:22 p.m. in London.

--Editors: Emily Bowers, Antony Sguazzin.

To contact the reporter on this story: Baudelaire Mieu and Olivier Monnier in Abidjan via Accra at ebowers1@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.


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