VZCZCXYZ0004
PP RUEHWEB

DE RUEHDK #2187 3171204
ZNR UUUUU ZZH
P 131204Z NOV 07
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 9536
RUEATRS/DEPTTREAS WASHDC
INFO RUCPDOC/USDOC WASHDC
RUEHSA/AMEMBASSY PRETORIA 2186

UNCLAS DAKAR 002187 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR AF/W AND AF/EPS 
TREASURY FOR OIASA/EBARBER, RHALL 
 
E.O. 12958: N/A 
TAGS: EFIN PGOV SG
SUBJECT: LETTER TO SECRETARY OF TREASURY PAULSON FROM SENEGALESE 
MINISTER OF ECONOMY AND FINANCE DIOP ON TRAINING TO CAPITALIZE BOND 
ISSUANCES 
 
REF:  DAKAR 1987 
 
¶1.  (U) Embassy Dakar received a letter dated October 29 from 
Senegalese Minister of State and Minister of Finance Abdoulaye Diop 
for Secretary of Treasury Paulson asking that the Department of 
Treasury support provide training and capacity-building on 
techniques to capitalize on government bond issuances.  The signed 
French original will be sent via pouch to AF/W. 
 
¶2.  (U) Following is Embassy's informal translation of the letter to 
Secretary Paulson from his Senegalese counterpart. 
 
SIPDIS 
 
Begin Text. 
 
Republic of Senegal 
Ministry of Finance and Economy 
Minister of State 
No. 01136/MEF/CAB 
Dakar, October 29, 2007 
 
Mr.  Secretary 
 
I would be grateful if your institution would examine the 
possibility of providing training and capacity- building on Treasury 
bond issuance techniques for the staff members of the Senegalese 
Treasury department.  We expect local staff members from the 
Senegalese Department of Treasury to gain exposure to the American 
experiences and practices in the organization, operation, and 
intervention rules and modalities of financial markets. 
 
The American financial market, apart from its size and growth 
potential, offers the opportunity to better understand the new 
financial products, and to raise the bar on best practices for our 
bond issuance rules and strategies, and the management of public 
shares. 
 
As Senegal is among the main leading state actors within the West 
African Economic and Monetary Union's (WAEMU) sub-regional financial 
market, I wish to express my great interest for this training that 
could contribute without doubt to the development of a national 
expertise. 
 
(Complementary Close) 
Abdoulaye Diop 
 
End Text. 
 
POST CONTEXT AND COMMENT 
------------------------ 
¶3.  (SBU) It is likely that Sengal is looking for assistance to 
further tap new avenues of financing to deal with a deteriorating 
economic situation.  Recent Post reports have noted that the rapid 
increase of Senegal's budget deficit over the last two years 
(currently estimated at 8 percent of GDP or higher) is now becoming 
a serious concern to the Senegalese authorities and donors.  As 
noted in Reftel, this year, Senegal successfully launched two bond 
offerings worth a total of USD 264 million to ease its current 
account deficit, and reportedly "replenish" its HIPC relief budget, 
which was a requirement for the recent signing of a new PSI with the 
IMF.  The strong participation of commercial banks in Senegal's 
recent Treasury bill auctions, and the existence of approximately 
USD 2 billion in uninvested funds available within the West African 
Economic and Monetary Union's (WAEMU) financial market, has no doubt 
encouraged Senegalese authorities to plan for new issuances to 
finance the government's short-term and medium-term capital needs, 
including civil servants' salaries, payment of internal debt, and 
infrastructure projects.  However, the IMF has privately noted that 
the two bond issuances this year are probably the most the GOS 
should pursue in the near term to avoid increasing the risk of 
return to a debt portfolio that is unsustainable. 
 
SMITH