Ivorian Timber Firms Fret over Tax and Asia
2/11/98
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Title: Ivorian Timber Firms Fret over Tax and Asia
Source: Reuters
Status: Copyrighted, contact source for reprint permissions
Date: 2/11/98
Byline: Desire Alladoum
ABIDJAN, Feb 11 (Reuters) - A stronger dollar buoyed revenues from Ivory Coast
timber exports last year but industrialists said on Wednesday that currency
devaluations in Asia and tax changes at home clouded the outlook for 1998.
``Because of the strong dollar, Ivory Coast is still in a good position,
although less and less so recently because of the weakness of the currencies of
Malaysia and Indonesia, which also export tropical wood products to Europe,''
one industrialist told Reuters.
Demand for the Western African country's timber exports was steady last year,
he said.
``Broadly, there has been little change. Demand isn't very strong, but it's
steady.''
Wood and wood products earned 161.9 billion CFA francs ($268 million) in 1996,
making this Ivory Coast's third biggest export sector behind cocoa and oil and
ahead of coffee.
Latest provisional figures showed exports in the first half of 1997 fell to
74.2 billion CFA francs from 88.7 billion in the same period of 1996. The
strong dollar helped the second half result, industrialists said.
Ivory Coast is the world's biggest cocoa producer, currently harvesting over
one million tonnes a year. That figure is boosted by slash and burn farming
methods that have devastated the country's forests.
The area covered by forest has fallen to around 3.9 million hectares from 12
million before independence from France in 1960.
Wood output averaged five million cubic metres in the 1970s, falling to 2.2
million cubic metres by 1993 before stabilising at around 2.5 million in 1995-
97.
In February 1997, the government, under pressure from the World Bank, said it
planned fiscal reforms in the timber sector. These included a special levy that
would go into a fund used for replanting forest land.
While the new tax has yet to be imposed, it is clouding the outlook for the
sector.
``The forecasts are slightly negative for 1998, but not catastrophic, except if
the tax reform goes through and aggravates the situation further,'' said one
operator.
Industrialists denounced the ``interference'' of the multilateral aid donors in
the timber sector.
``With a complete misunderstanding of the realities on the ground and the
specifics in Ivory Coast, these institutions are trying to impose a fiscal
regime that penalises big firms in particular,'' one said.
Like neighbouring Ghana, Ivory Coast has banned the export of all uncut logs,
except for teak produced on the controlled land of state forestry firm SODEFOR.
In contrast, it has encouraged the export of wood products and wood that has
been part-processed.
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