VZCZCXRO1892
PP RUEHMA RUEHPA
DE RUEHDK #0748/01 1690751
ZNR UUUUU ZZH
P 180751Z JUN 09
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 2573
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHAD/AMEMBASSY ABU DHABI 0087
RUCPDOC/USDOC WASHDC
RUEHLMC/MCC WASHDC
RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 02 DAKAR 000748 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR AF/W, AF/EPS, EB/IFD 
TREASURY FOR RHALL AND DPETRES 
ABU DHABI FOR OTA 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV ETRD EAID SG
SUBJECT:  SENEGAL'S MINISTER OF BUDGET WALKS OUT 
 
DAKAR 00000748  001.2 OF 002 
 
 
¶1.  (SBU) Summary:  On June 10, Junior Minister for Budget, Mamadou 
Abdoulaye Sow resigned from the Government of Prime Minister 
Souleymane Ndene NDiaye for "personal reasons".  Sow was replaced 
immediately by Abdoulaye Diop, Chief of Staff of former Prime 
Minister Hadjibou Soumare.  Several observers praised Minister Sow's 
managerial competence and skills.  In an interview with a private 
local radio station, the IMF Resrep commented that former Minister 
Sow is an honest expert who has positively contributed to improving 
the budget management system of Senegal since September 2008.  End 
summary. 
 
SOW'S RESIGNATION NOT A GOOD SIGN 
--------------------------------- 
 
¶2.  (SBU) On June 10, President Wade accepted the resignation of 
Mamadou Abdoulaye Sow  as  Junior Minister for Budget, a position 
that reports to the Minister of Economy and Finance.  For many 
observers, Sow's resignation was orchestrated by senior government 
officials who did not appreciate his strict handling of budget 
disbursements and his willingness to say "no" to requests for money 
or payments not fully justified by the formal budget and funds 
available.  It is clear that Sow was under great pressure for 
funding requests. 
 
¶3.  (SBU) Sow's resignation came ten months after the dismissal of 
his predecessor, Ibrahima Sarr, who was implicated in Senegal's 
2007-2008 budget crisis that was caused by treasury advances and 
extra budgetary commitments leading to CFA 150 billion (USD 300 
million) or more in arrears to private sector suppliers and 
contractors.  Sow was widely viewed as a key official in stopping 
these practices and helping the government meet reform criteria for 
the December 2008 IMF Board Review of Senegal's Policy Support 
Instrument (PSI) program. 
 
¶4.  (SBU) There is much speculation that Sow's resignation is also 
the result of the current "portfolio conflict" between the Minister 
of State/Minister of Economy and Finance, Abdoulaye Diop, and the 
new "Super Minister," Karim Wade regarding control of Senegal's 
budget and relations with donors.  Sow was considered to be very 
close to Minister Diop, but has likely been in conflict with the 
staff of Minister Wade (whose portfolio includes International 
Cooperation, Infrastructures, Civil Aviation and Land Management). 
Sources noted that on several occasions, Sow refused to approve 
non-competitive tenders and cash advances that had not gone through 
appropriate channels. 
 
¶5.  (SBU) There are troublesome indications that some in the 
government are trying to discredit Sow, and perhaps also Minister 
Diop, through the efforts of the State's Inspector General, who 
reportedly is assigning blame for the past treasury advances and 
extra-budgetary spending on the two Ministers. 
 
IMF RESREP HAS POSITIVE WORDS FOR SOW'S PERFORMANCE 
--------------------------------------------- ------ 
¶6.  (SBU) In reaction to Sow's resignation, the IMF Resrep, Alex 
Segura, stated publically and unequivocally that Sow had perfectly 
mastered Senegal's public finance issues.  Segura stated, Sow is 
honest and has contributed positively to Senegal's improved budget 
management system by eliminating treasury advances since September 
2008 -- the mechanism that led to budgetary difficulties in 2007 and 
2008 -- and by reducing the number of 'Marche de gre a gre.'" 
[Note: non-competitive, single source contracts.  End Note.] 
According to Segura, Sow was effective in "closing in a timely 
manner the country's FY2008 fiscal and accounting budget."  Segura 
added that Sow was instrumental in Senegal's efforts to meet the PSI 
criteria ahead of the IMF Review scheduled for June 19. 
 
NEW BUDGET MINISTER IS A TECHNOCRAT - PERHAPS WITH POLITICAL TIES 
--------------------------------------------- ------ 
¶7.  (SBU) Surprisingly, President Wade appointed Abdoulaye Diop 
(same name but no relation to the Finance Minister) to replace Sow. 
Budget Diop ("Junior") is a technocrat and is reported to be very 
close to Karim Wade.  Prior to his nomination Diop was the interim 
Chief of Staff of new Prime Minister NDiaye.  At age 48, Diop is 
relatively young for this position.  He graduated from the National 
School of Administration and Magistracy.  He was most recently the 
Chief of Staff of former Prime Minister Soumare and prior to that 
was the Chief of Staff of MinFin Diop.  Despite the fact that Budget 
Diop worked previously in the Ministry of Finance, and closely with 
Finance Diop, we do not believe that "Junior" was the Finance Diop's 
choice, nor, apparently, was he even consulted on the appointment. 
Some commentators have speculated that naming a second Abdoulaye 
Diop into the financial governance mix represents a deliberate 
 
DAKAR 00000748  002.2 OF 002 
 
 
attempt to create new confusion about accountability for management 
of funds -- but it should be noted that "Abdoulaye" and "Diop" are 
both very common names in Senegal. 
 
COMMENT 
------- 
¶8.  (SBU) The new Minister of Budget Diop has the knowledge and 
expertise to do this job.  We will have to wait, without too much 
optimism, if young Diop is willing and able to resist the tremendous 
political pressure that is bound to be applied for a "looser" 
approach to funding requests by powerful government officials.  His 
close acquaintance with Minister Karim Wade could be a cause for 
concern since former Budget Minister Sarr - another friend of 
Karim's - acted without the Finance Minister's consent on the 
treasury advances and extra-budgetary commitments.  A return to 
prior practices on treasury advances would be a critical breach of 
Senegal's PSI program with the IMF.  The new Minister will also come 
under scrutiny for his possible role as an arbitrator in the duel 
between Finance Diop and Wade for management of donor funds and 
projects. 
 
BERNICAT