Coming to Terms with Reality. Evaluation of the Belgian Debt Relief ...

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Annexes
Table 6 highlights the improvement in the current account balance, from a deficit of over
300 billion FCFA in 2004, to a surplus of 62 billion FCFA in 2006. The capital account
remained positive after 2004, especially because of a decrease in the public debt transfers,
and a slight increase in the private sector net inflows. Net foreign assets have been rising
steadily since 1999. Starting from 1992 cumulated changes of net foreign assets amounted
to nearly 500 billion FCFA by 2002 and to nearly 2,000 billion FCFA by 2008. The role of
debt alleviation in this process, however, has been quite limited.
5.5 Public Finance
We now turn to the effect of debt alleviation on public finance. Between 1996 and 2007 the share
of interest payments in Government revenues has declined substantially. This can be explained
first by the diminishing debt burden, and second by the increase in government revenues:
Figure 18 Government Revenues, Expenditures and Fiscal Surplus, 1998-2008
Billions of CFA France
2500
2000
1500
1000
500
0
-500
Source: IMF
1998
1990'
'2000
2001
Total Revenues
(excluding privatization proceeds)
2002
Total Expenditures
'2007(e) '2008(p)
In figure 18 we present the evolution of Government revenues and expenditures between
1998 and 2008, and the fiscal surplus The country has had a budgetary surplus from the
year 2000 onward (with the exception of the year 2005). This is mainly explained by the
'2003
2004
2005
2006
Budgetary Surplus (if positive)
Coming to Terms with Reality
increasing oil revenues 105 . These revenues represented about 22% of total Government
revenues in 2000 and went up to over 35% in 2007.
For the sake of comparison, and to put the Government’s interest burden in perspective, we
present in figure 19 the interest due on total public debt and the Government oil revenues
between 1996 and 2008:
Figure 19 Interest due on External Public Debt and Government Oil Revenues, 1996-2008:
Percent (%)
1000
900
800
700
600
500
400
300
200
100
0
Source: IMF
1996
1997
1998
1999
2000
Oil Revenues
Interest Expenditures due
2001
The oil revenues received by the Government doubled between 2004 and 2007, due to the
increasing oil price combined with a slightly declining output. In the year 2007 these
revenues represented about 630 billion FCFA, nearly twice as much as what the country
received in interim debt relief under the HIPC Initiative between October 2000 and
October 2006. Another way to put the oil revenues and interest payments in perspective is
to analyze the difference between total and primary government expenditures and the
difference between total government revenues with and without oil revenues. These
variables are represented in figure 20.
105 For the year 2004, the fiscal deficit can be explained by a decrease in total grants and in the non-oil tax
revenues. The oil revenues stayed nearly at their 2003 level.
2002
2003
2004
2005
2006
2007 (e)
2008 (p)
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