VZCZCXRO1649
RR RUEHLMC
DE RUEHNM #0869/01 3101717
ZNR UUUUU ZZH
R 061717Z NOV 09
FM AMEMBASSY NIAMEY
TO RUEHC/SECSTATE WASHDC 5437
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHAR/AMEMBASSY ACCRA 0521
RUEHFR/AMEMBASSY PARIS 0870
RUEHLMC/MCC WASHDC

UNCLAS SECTION 01 OF 02 NIAMEY 000869 
 
DEPT FOR EBB/IFD/OMA - B SAUNDERS; PLS PASS USAID/AFR/W 
ACCRA FOR USAID/WA 
PARIS FOR AF WATCHER 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ECON EFIN PGOV PREL KMCA NG
SUBJECT: ENCOURAGING NIGER BUDGET TRANSPARENCY 
 
REF: A) State 81177, B) Niamey 00221 
 
¶1. Ambassador delivered to the Government of Niger (GON) Foreign 
Minister ref A demarche encouraging central government budget 
transparency as requested.  FM responded that the GON continues to 
work on improving transparency and that she will share the contents 
of the demarche with the Minister of Finance. 
 
¶2. Per ref B, the Ministry of Finance publishes Niger's budget and 
copies are available to the public at minor cost.  The published 
budget, however, is not comprehensive, and significant areas of 
public income and spending remain undisclosed.  Insufficient budget 
transparency fuels speculation about corruption and misuse of public 
resources.  Both international donors and civil society 
organizations are taking steps to promote greater transparency.  An 
update on recent activities follows. 
 
Civil Society 
------------- 
¶3. On July 13-15, 2009, the Network of Organizations for 
Transparency and Budgetary Analysis (ROTAB), a local network of 
anti-corruption organizations, held a forum on extractive industries 
in Niger.  The Forum was funded and co-sponsored by two 
international organizations, Publish What You Pay and Revenue Watch 
Institute; participants included representatives of government 
institutions, including Customs and Taxation, representatives of 
mining companies, international organizations, and embassies. 
Improving budget transparency of mining revenues was a major focus 
of discussion, and the conference received wide media coverage. 
Although the topic of this forum was extractive industries, and the 
sponsoring organizations are among the civil society partners in the 
Extractive Industries Transparency Initiative (EITI) Niger, the EITI 
Niger Secretariat was not represented at the forum. 
 
¶4. Niger remains engaged as an EITI candidate country, but progress 
towards meeting the March 2010 deadline for compliance has been very 
slow.  Only three mining companies are currently participating in 
EITI, and there has been no transparency at all regarding the 
Chinese investments in petroleum and uranium projects.  EITI Niger 
activities were suspended from August 20 - September 28, 2009 
because civil society participants withdrew from the process until 
the GON provided guarantees of their safety and security during a 
period of political unrest.  (Comment:  There are only a small 
number of civil society activists in Niger, and the leaders of 
anti-corruption organizations are also leaders in pro-democracy 
activities.  End comment.) 
 
¶5. On October 25, a local association called Citizens Alternatives 
together with the National Customs Trade Union sponsored a 
roundtable on "Transparency of Budget Processes."  Participants 
based their discussions on the results of the 2008 Open Budget Index 
developed by civil society participants through the International 
Budget Partnership (IBP).  According to this index, Niger provides 
only minimal information about public spending, and roundtable 
participants pointed out that the public is not provided with 
accurate information on large projects or on flows of international 
assistance.  The roundtable was the subject of an analytical article 
in the independent newspaper "Le Republicain." 
 
¶6. On November 4, the Niger chapter of Transparency International 
(TI) held a public meeting to initiate a study on Systems of 
National Integrity in Niger.  This study will use a standard TI 
format to evaluate both law and actual practice as a way of building 
public awareness and focusing public discussion on corruption and 
governance issues in Niger. 
 
Donor Efforts to Increase Transparency 
-------------------------------------- 
¶7. On October 15, the World Bank and the Minister of Finance signed 
a new USD 10 million agreement to improve central government 
administration in Niger.  Project documents noted "inadequate budget 
preparation, execution, internal controls, and misalignment with the 
country's (development) goals."  The project further noted that 
"Social accountability is still perceived to be low as mechanisms of 
checks and balances including civil society organizations, media and 
other mechanisms that strive to develop and become more effective." 
Although the project focus is on internal information systems and 
information sharing within the Ministry of Finance, greater budget 
transparency is an integral element that would facilitate public 
information. 
 
Activities Disrupted by Political Turmoil 
----------------------------------------- 
¶8. Fragile systems of political accountability were shaken by 
President Tandja's decision to extend his mandate beyond 
constitutional limits.  In his rush to consolidate authority through 
 
NIAMEY 00000869  002 OF 002 
 
 
the August 4 referendum on a new constitution, President Tandja 
dissolved the National Assembly and dismissed the Constitutional 
Court.  The regime's selective use of corruption charges to 
discredit the National Assembly and harass political opponents has 
not enhanced legitimate anti-corruption efforts. 
 
¶9. Recent political events led to the suspension of a successful 
project sponsored by the U.S. Department of Treasury's Office of 
Technical Assistance.  The OTA project worked directly with the 
Ministry of Finance Department of Taxation to increase tax receipts. 
 The OTA project consultant on taxation of extractive industries 
initiated interagency cooperation between the tax authorities and 
the ministry of mining to insure availability of accurate statistics 
on production.  OTA project consultants provided training on 
auditing large companies, including state owned firms with large tax 
arrears.  The May 2009 IMF Country Report noted that 2008 "Tax 
revenue exceeded program targets by 0.9 percent of GDP, reaching 
11.8 percent of GDP because of strong performance of custom duties, 
company profit taxes and the VAT."  (Comment:  The success of this 
project demonstrates that many public employees are motivated to 
improve public financial management when they are supported by more 
effective systems and the necessary political will.  End comment.) 
 
¶10. Governance activities funded through the Millennium Challenge 
Account (MCA) Threshold Program have also been suspended in response 
to political events.  The MCA program in Niger included a range of 
anti-corruption activities and employed a number of 
progressive-minded Nigeriens.  Without a prompt return to democratic 
processes, Niger will lose the benefits of this program. 
 
ALLEN