VZCZCXRO1447
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMA RUEHMR RUEHPA RUEHRN RUEHTRO
DE RUEHYD #0504/01 1561059
ZNR UUUUU ZZH
R 051059Z JUN 09
FM AMEMBASSY YAOUNDE
TO RUEHC/SECSTATE WASHDC 9963
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 YAOUNDE 000504 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: CM EAGR EAIR ECON EFIN EIND
SUBJECT: CAMEROON'S ECONOMY MINISTER OUTLINES ECONOMIC 
FRUSTRATIONS 
 
¶1.  (SBU)  Summary:  On May 28, Ambassador met with Minister 
of Economy,Planning and Regional Development Louis Paul 
Motaze.  Motaze was frustrated with Cameroon's weak economic 
growth, poor budget implementation, and slow progress on 
major infrastructure projects.  He blamed insufficient 
project preparation, cumbersome donor procedures, and private 
sector involvement.  Noone knows what is next for the stalled 
efforts to create a new national airline, CAMAIRCO, he said. 
He acknowledged finishing work on the national census but 
said it was awaiting presidential approval.  End summary. 
 
Frustrations about Slow Growth 
------------------------------ 
 
¶2.  (SBU)  The global economic crisis has only exacerbated an 
economic situation which was not good to begin with and made 
economic reforms more urgent, Motaze said, noting that low 
oil prices would cost the government about 200 billion FCFA 
(roughly $420 million) in lost revenues.  He was frustrated 
with the lack of growth and the direction of the economy, 
which he blamed on a past emphasis on social sector 
development at the cost of investments to create wealth and 
employment.  Motaze cited three economic priorities: 
agriculture, infrastructure development, and improving the 
business climate. 
 
¶3.  (SBU)  Motaze was frustrated with Cameroon's poor 
investment budget implementation and slow movement on major 
infrastructure projects. (Note:  Cameroon historically only 
spends about 75% of its investment budget each year.  End 
note.)  He blamed the budget problem on excessive studies 
required before spending allocated funds.   The budget often 
contains many projects which have not been adequately studied 
and are therefore not ready for implementation, he said.  He 
saw the need for an independent institution to help prepare 
studies for projects before they are put into the budget. 
Motaze also complained about what he saw as complicated and 
lengthy donor procedures.  He also depicted as "dangerous" 
the fact that major infrastructure projects such as a 
proposed Kribi power plant are subject to private sector 
decisions. 
 
CAMAIRCO Stalled 
---------------- 
 
¶4.  (SBU)  Motaze had argued for private management of a new 
national airline CAMAIRCO and had supported U.S. company Lion 
Air.  The Minister of Finance did not sign the Lion Air 
contract and many officials were unhappy that Motaze was 
involved with the company, the Economy Minister said.  The 
Lion Air project fell through and the President has now 
ordered a restart of the process to move CAMAIRCO forward. 
Motaze was confident there is a market space for a 
Cameroonian airline but he recognized this is a difficult 
world environment to start an airline and professed "no one 
is sure what's next." 
 
No Movement on Census 
--------------------- 
 
¶5.  (SBU)  When asked about the status of the long overdue 
census, Motaze said he had finished his work but "my bosses 
need to release it."  He thought the presidency had balked at 
publishing the census because some information had been 
manipulated by "elites".  He claimed that all current 
government planning is taking into account the latest census 
results. 
 
Comment 
------- 
 
¶6.  (SBU)  The IMF's latest (April 2009) forecast for 
Cameroon estimates 2.5 percent GDP growth, down from 3.4 
percent in 2008, in a context of declining inflation and a 
population growth of about 3 percent.  A recent Fitch report 
on Cameroon cites weak economic fundamentals, reflecting a 
low investment rate and insufficient absorption capacity, 
mostly attributable to weak public governance and exacerbated 
by the global economic situation.  Minister Motaze comes 
across as one of the more informed and polished government 
ministers.  Nonetheless, like so many other ministers, he 
leaves us with little in the way of ideas to jump-start 
progress in his portfolio - in his case, the economy - and 
puts too much of the blame for poor governance on donors and 
the private sector.  It is not clear why there has been no 
movement on publishing the census - now at least a year 
overdue - but its absence seriously complicates any kind of 
development planning in Cameroon. 
 
YAOUNDE 00000504  002 OF 002 
 
 
 
¶7.  (SBU)  Motaze,s criticism of social sector spending is 
intended as an implicit criticism of the dictates of the 
Highly Indebted Poor Country (HIPC) debt relief process, 
laying the blame for Cameroon,s sluggish growth at the feet 
of donor interference.  Unfortunately, this analysis is as 
widespread among GRC officials as it is wrong.  Motaze and 
others say the GRC needs to invest more, and quickly, but 
they have not tackled the systematic and governance issues 
that left the investment budget underspent and poorly 
executed for the last several years.  It does not matter what 
priorities the GRC sets; until they improve budget execution 
and effectiveness and improve the business climate, the 
impact will be limited and growth will continue to sputter. 
GARVEY