VZCZCXRO4606
RR RUEHDU RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHYD #0010/01 0031628
ZNY CCCCC ZZH
R 031628Z JAN 08  ZDK PER MULTIPLE REQUESTS
FM AMEMBASSY YAOUNDE
TO RUEHC/SECSTATE WASHDC 8454
INFO RUEHZO/AFRICAN UNION COLLECTIVE 0061
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 YAOUNDE 000010 
 
SIPDIS 
 
SIPDIS 
 
STATE ALSO FOR AF/C, AF/EP AND EB 
STATE ALSO FOR OPIC 
LONDON AND PARIS FOR AFRICA ACTION OFFICERS 
 
EUCOM FOR J5-1 AND POLAD 
 
E.O. 12958: DECL: 12/26/2017 
TAGS: EFIN EAIR ECON PREL EINV CM
SUBJECT: CAMEROON FINANCE MINISTER DISCUSSES THE ECONOMY 
 
 
YAOUNDE 00000010  001.2 OF 002 
 
 
Classified By: Poloff Tad Brown for Reasons 1.4 b and d. 
 
¶1.  (C)  Summary:  Cameroon Finance Minister Essimi Menye 
told the Ambassador during her December 21 courtesy call that 
"the future of Cameroon is cocoa" and that long-running plans 
to privatize national airline CAMAIR and national telecom 
CAMTEL are being revisited.  Economic growth will remain less 
than 5 percent for 2008, and the Government of Cameroon (GRC) 
needs to focus on investment, especially in the agricultural 
sector, in order to spur short-term economic expansion, he 
said.  Recently brought into the cabinet from a stint at the 
IMF, Essimi Menye's lack of a more coherent vision for 
Cameroon's economy and his apparent backtracking on the 
CAMAIR and CAMTEL privatizations was disappointing.  End 
summary. 
 
Growth Below 5%; More Investment Needed 
--------------------------------------- 
 
¶2.  (SBU)  Menye said the IMF's recent review of the GRC's 
economic performance, completed December 19, was generally 
favorable, with its only criticism focused on the sluggish 
pace of the CAMAIR and CAMTEL privatizations.  Economic 
growth is not picking up in large part because the execution 
of the investment budget remains problematic and national 
production levels have failed to increase, opined Essimi 
Menye, adding, "to spur growth, we need to invest more."  The 
coming year will be better, predicted the Minister, because 
of an increased investment budget and the selection of 
"better-prepared" projects. 
 
¶3.  (SBU)  Menye predicted that economic growth would remain 
below 5 percent in 2008, with prospects for stronger growth 
if the GRC succeeded in spurring agricultural production and 
carrying out a planned expansion of infrastructure 
construction.  To this end, the GRC had lifted restrictions 
on importing cement in order to spur construction and to 
create more jobs within the next six to eight months.  Menye 
listed aluminum, beer, soap and mineral water as Cameroon's 
main industrial products and said it would take at least a 
generation to produce the skilled workers and other inputs 
needed to spark industrial growth.  The minister downplayed 
persistent criticism of Cameroon's business climate, blaming 
what he saw as the poor education of Cameroonian 
entrepreneurs and cultural differences for the difficulties 
foreign investors have in dealing with Cameroon's bureaucracy. 
 
Cocoa: The Future of Cameroon 
----------------------------- 
 
¶4.  (SBU)  According to Menye, the GRC will focus on 
agriculture.  "Cocoa is the future of Cameroon, not industry" 
he said.  From the current annual level of 180,000 Metric 
tons of cocoa, Essimi Menye said he would like to target 100 
million MT annually.  He estimated this would result in 
500,000 additional jobs for farmers by 2015.  Essimi Menye 
praised the contributions made by the U.S. Department of 
Agriculture through the Borlaug Fellows and Food for Progress 
programs. 
 
CAMAIR: Looking for Partners 
---------------------------- 
 
¶5.  (SBU)  Without explicitly saying that the GRC had decided 
to abandon long-running plans to privatize CAMAIR, Menye said 
the GRC had decided to "go on a shopping trip" to recruit a 
new advisor, and identify two or three foreign partners who 
can come in quickly in a joint venture.  The minister said 
the GRC would not conduct a further tender because "it will 
take too much time,"  adding that CAMAIR has flight routes to 
London, Paris, and Frankfurt. 
 
CAMTEL: Revisiting Privatization Plans 
-------------------------------------- 
 
¶6.  (SBU)  Menye said only two (Indian) bidders had responded 
to the privatization tender for CAMTEL, only one of which was 
fully qualified.  Because of this poor response, the GRC 
would invest in order to build up the national fiber optic 
network, he said.  He dismissed the idea that the fiber optic 
backbone (running along the Cameroon-Chad pipeline) could be 
privatized, saying that such a utility should be open to all 
competitors.  Furthermore, the fiber optic connection to 
SAT-3 is controlled by a contract involving the GRC, which 
 
YAOUNDE 00000010  002 OF 002 
 
 
could not be privatized, he said. 
 
Civil Service Salaries and the Budget 
------------------------------------- 
 
¶6.  (SBU)  Menye said President Biya had personally asked him 
to research the possibility of raising civil service 
salaries.  The Finance Minister argued that, in light of 
Cameroon's heavy dependence on imports, salary increases 
would trigger import growth that would negatively impact the 
balance of payments.  Salary raises, therefore, cannot be 
pursued until Cameroon can increase its exports, which will 
require more domestic production and investment in 
infrastructure, he said.  When Ambassador asked about the 
relatively high proportion of the budget dedicated to defense 
expenditures, Essimi Menye said he shared the view that the 
allotment was too much but admitted that he was not involved 
in setting the allocation for defense spending, which is 
decided by the Presidency. 
 
Comment 
------- 
 
¶7.  (C)  We had hoped for a more inspiring and holistic 
vision of how to jump-start Cameroon's sluggish economy and 
improve the GRC's abysmal budget execution.  With a decade of 
experience at the World Bank and IMF, Menye is seen by many 
as one of the brightest lights in the current cabinet and we 
are hopeful he will perform competently and relatively 
cleanly at the helm of Cameroon's finances.   The minister 
professed an eagerness to welcome large-scale American 
investment in Cameroon but we were puzzled by his dismissive 
attitude toward the difficulties American companies face in 
doing business here.  We were also disappointed by his lack 
of a more coherent vision for Cameroon's economy and his 
apparent backtracking on the CAMAIR and CAMTEL 
privatizations. 
GARVEY