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DE RUEHYD #0731/01 1580824
ZNY CCCCC ZZH
P 070824Z JUN 07
FM AMEMBASSY YAOUNDE
TO RUEHC/SECSTATE WASHDC PRIORITY 7822
INFO RUEHZO/AFRICAN UNION COLLECTIVE PRIORITY
RHMFISS/HQ USEUCOM VAIHINGEN GE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 YAOUNDE 000731 
 
SIPDIS 
 
SIPDIS 
 
DEPT ALSO FOR AF/C, EB 
LONDON AND PARIS FOR AFRICA ACTION OFFICERS 
EUCOM FOR J5-A AFRICA DIVISION AND POLAD YATES 
 
E.O. 12958: DECL: 06/03/2017 
TAGS: EFIN KCOR PREL PGOV EAID CM
SUBJECT: CAMEROON: HUNDREDS OF MILLIONS IN DEBT RELIEF HAVE 
HAD "NO IMPACT" 
 
 
Classified By: Pol/Econ Officer Tad Brown for reasons 1.4 b and d. 
 
¶1.  (C)  Summary.  Seven years after the beginning of the 
Heavily Indebted Poor Countries (HIPC) debt relief process, 
the hundreds of millions of dollars specifically allocated 
for pro-poor development projects have had "no impact" 
according to the Cameroonian official charged with piloting 
the program.  In a May 31 meeting with Emboffs, Permanent 
Secretary for the Committee for Consultation and the Tracking 
 
SIPDIS 
of HIPC funds Laurent Kouo Ngangue complained that high and 
low level corruption have perverted a system that was 
established to channel funds to worthy development projects. 
Earlier reports of malfeasance at the center of the HIPC 
process has disheartened us, but this is the first time we 
have heard such scathing criticisms from such a high level 
Government of Cameroon (GRC) official.  If there is any 
silver lining to the oppressive cloud of corruption in 
Cameroon, it is that Ngangue and select others are still 
working to reform the system.  End Summary. 
 
-------------------------- 
HIPC Funds: The Good Money 
-------------------------- 
 
¶2.  (U)  Responding to donor pressure and conditionalities to 
obtain the multibillion dollar debt relief offered through 
the HIPC process, Cameroon began tracking certain budget 
lines through a special committee called the Consultative 
Committee for the Management and Tracking of HIPC Funds 
(CCS-PPTE in the French acronym).  The CCS-PPTE, comprising 
representatives from the GRC, major donors, and civil 
society, was established to ensure that PPTE funds were used 
for pro-poor priority sectors like the construction of 
schools and other infrastructure.  Donors and other budget 
watchers praised the HIPC process and the CCS-PPTE for giving 
greater transparency into government spending and 
prioritizing pro-poor expenditures.  Ambassadors represented 
on the CSS-PTTE include the French, German, Canadian,and 
Japanese, as well as the UNDP Resident Representative.  They 
have been pushig hard for further audits and action as a 
pre-condition to even holding the group's next meeting. 
 
---------------------------- 
We Knew Some of the Bad News 
---------------------------- 
 
¶3.  (U)  Post had received some audits on FY2003 and 2004 
HIPC projects, and Dynamique Citoyenne, an NGO consortium 
that has received U.S. Democracy and Human Rights funding, 
had led well publicized verification missions that uncovered 
projects that had been funded but never completed or only 
partially completed.  In addition, repeated budget analyses 
(especially by the IMF) indicated that the GRC was 
chronically under-spending (and sometimes under-funding) its 
HIPC accounts.  Ministry-by-ministry tracking of HIPC funding 
revealed a disproportionate amount of funding went towards 
international travel, office furniture and four-wheel drive 
vehicles. 
 
--------------------- 
But Nothing Like This 
--------------------- 
 
¶4.  (C)  Laurent Kouo Ngangue, the Permanent Secretary of the 
CCS-PPTE, requested a May 31 meeting with Emboffs, explaining 
that he wanted to discuss Ambassador Marquardt's May 16 
speech to Cameroon's leading business association citing the 
Cameroonian public's growing disillusionment with the HIPC 
fund process.  Rather than defend his own agency, however, 
Ngangue applauded the Ambassador's strong words and launched 
into a condemnation of the manner in which hierarchical and 
corrupt politics in the GRC had perverted the HIPC process. 
 
5,  (C)  To illustrate his point, Ngangue pointed to a 
HIPC-funded tobacco program run through the Ministry of 
Agriculture in Cameroon's Eastern Province.  Mt. Cameroon 
Tobacco, an American investor in the sector, had contacted 
Ambassador Marquardt, relaying suspicions that most of the 
funds were being embezzled and complaining that those 
managing the project were actively undermining the 
substantial investments already made in the tobacco sector. 
When the Ambassador conveyed these concerns to Prime Minister 
Inoni, Ngangue was sent on a mission to investigate.  Ngangue 
said he found that Mt. Cameroon's complaints were fully 
justified; the nominal implementers of the project had no 
experience in the tobacco sector and were simply passing out 
 
YAOUNDE 00000731  002 OF 002 
 
 
cash to curry political favor for their project. 
Additionally, substantial sums earmarked for the farmers were 
embezzled before even leaving Yaounde. 
 
¶6.  (C)  Ngangue's January 2007 report to Minister of Economy 
and Finance Polycarpe Abah Abah recommended an immediate hold 
be placed on all PPTE funds going to the project until an 
audit could be conducted.  Ngangue says he has yet to receive 
a response from Abah Abah's office but that, immediately 
after submitting the report, he began receiving threatening 
phone calls demanding that he drop his investigation.  When 
Ngangue reported these threats to the police, an officer 
instructed him to inform Minister Delegate Charged with the 
Budget Essimi Menye and not/not to inform Abah Abah.  Ngangue 
explained that Abah Abah and Essimi Menye (who is generally 
considered to be extremely competent and clean in contrast to 
Abah Abah, who is generally considered to be highly competent 
and the most corrupt official in the current cabinet) have a 
barely disguised adversarial relationship. 
 
¶7.  (C)  Ngangue went on to say that the tobacco program is 
simply the most blatant case he has discovered, that the 
CCS-PPTE structures have been completely corrupted by 
committee experts (who are supposed to judge programs but 
have instead set up private businesses through which they 
submit reconstituted projects) and high level officials. 
Ngangue beseeched the Embassy to continue its high profile 
and frank criticisms of broken GRC systems, saying that the 
system would degenerate even further if USG pressure was 
perceived to slacken. 
 
--------------------------------------------- ------------ 
Comment: Taking Solace in Cameroon's Own Reform Champions 
--------------------------------------------- ------------ 
 
¶8.  (C)  We were as disheartened by Ngangue's revelations as 
we were encouraged by his honest assessment and his efforts 
to improve the system.  If nothing else, we take solace in 
the knowledge that individuals like Ngangue and Essimi Menye 
continue to oppose the culture of corruption propagated by 
Abah Abah and his minions.  We will continue to speak out 
against bad governance and to identify champions of reform 
whom we can support -- as well as await the long-promised 
reshuffle finally expelling Abah Abah from his powerful 
position.  End comment. 
MARQUARDT