VZCZCXYZ0000
RR RUEHWEB

DE RUEHYD #0055/01 0251023
ZNR UUUUU ZZH
R 251023Z JAN 10
FM AMEMBASSY YAOUNDE
TO RUEHC/SECSTATE WASHDC 0642
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS YAOUNDE 000055 
 
SIPDIS 
 
DEPT for EEB/IFD/OMA, Briana Saunders 
 
E.O. 12958: N/A 
TAGS: EFIN EAID EINV ECON CM
SUBJECT: Cameroon and Fiscal Transparency 
 
REF A:  State 01923 
REF B: 09 Yaounde 1095 
REF C: 09 Yaounde 729 
 
¶1.  (SBU) Summary: The Government of Cameroon (GRC) annually 
publishes its budget as passed by the National Assembly and approved 
by the President.  The published budget allows the public to review 
some information regarding projected revenues and expenditures, but 
the GRC's actual income and expenditures are believed to vary widely 
from the publicly announced appropriations, and it is not possible 
for Cameroonian citizens to obtain detailed information regarding 
actual GRC revenues and expenditures.  The Government of Cameroon 
has taken some recent positive action to improve budget 
transparency, but its finances are still relatively opaque.  Post 
supports another waiver based on these initial steps and offers its 
updated 2010 action plan.  End Summary. 
 
¶2.  (SBU) The GRC is already receiving U.S. foreign assistance funds 
from the FY10 State Foreign Operations Appropriations Act. 
 
Budget Publicly Available With Incomes and Expenditures 
 
¶3.  (SBU) The GRC makes public its annual finance law, which 
includes projected revenues and expenditures for the coming year. 
This information is published widely in the official and private 
media but is not available online.  Cameroonian citizens are able to 
obtain more details regarding the projected budget by purchasing the 
Official Gazette, which costs about 500 CFA (about $1).  The 
Official Gazette includes more detailed information on the execution 
of the previous year's public investment budget; however, as 
reported in Ref B, budget watchdog Dynamique Citoyenne estimates 
only 17% of the public investment budget is accounted for in the 
Official Gazette. 
 
The Publicly Available Budget Is Not Completely Accurate 
 
¶3.  (SBU) The Embassy believes there is significant variance between 
the projected budget and the budget as it is actually executed. 
Embassy contacts continue to report that the GRC does not have the 
capacity to track its own budget execution because there is no 
interface among various computer programs used by the Office of the 
Budget (which plans the budget) and the Office of the Treasury 
(which spends the money), meaning even the Minister of Finance is 
incapable of giving a detailed account of how funds are spent.  A 
prominent economist pointed out in local newspapers during the most 
recent budget exercise that the lag in budget execution has led to 
what should be an accumulated budget surplus of almost $4 billion 
and the public does not know where the money has gone.  The World 
Bank Country Representative told EconOff that while the government 
has recently taken some steps, transparency concerns still prevented 
his organization from lending the government substantial amounts of 
money.  The Embassy has not heard of any substantial "off-budget" 
spending by the GRC since our last report in 2009 (Ref C), although 
contacts believe that it still occurs. 
 
The GRC Has Recently Taken Limited Steps To Improve Transparency 
 
¶4.  (SBU) Although the GRC's budget is still far from transparent, 
since our reporting in 2009 (Refs B and C) it has taken limited 
steps to improve transparency.  The GRC had stopped publishing 
quarterly budget execution updates for most of 2008, but has now 
published three quarterly reports in 2009.  The latest report, 
published December 30, 2009, updates information as of the end of 
September 2009.  Finance Minister Essimi Menye published a full page 
ad in newspapers on December 14, 2009, directing all managers of 
public money, including ambassadors and local officials, to perform 
an end of year cash count and submit the results by January 14, 
¶2010. 
 
¶5.  (SBU) Finance Minister Menye did not seem very receptive to 
Ambassador's demarche (Ref C) in August, 2009.  However, five months 
later, on January 11, 2010, Prime Minister Philemon Yang 
independently designated his Secretary General to respond and follow 
up with the Ambassador's concerns.  At an initial meeting with 
EconOff on January 20, 2010, the Secretary General promised to work 
on budget transparency issues and promised to meet regularly with 
EconOff, along with his two staffers who work the portfolio, 
although no specific actions were previewed.  The Secretary General 
also presented Econoff with the first report of the Steering 
Committee for Public Finance Reform, published in November 2009, 
entitled "Public Finance Modernization Plan."  Formed in February 
2009, the Committee aims to improve governance in public finances 
through several methods outlined in the 46-page report. 
 
¶6.  (SBU) Cameroon is a candidate country in the Extractive 
Industries Transparency Initiative (EITI) process and EITI 
"validators" are in country the week of January 18, 2010 to assess 
the progress toward becoming compliant.  At a presentation to donors 
in November, representatives from Cameroon's EITI committee reported 
optimism in achieving validation by the March, 2010 deadline. 
 
Cameroon has published EITI reports and worked with corporations, 
government and civil society to effect compliance with EITI 
standards.  Privately, however, NGO and other non-governmental 
contacts have told EconOff they are not optimistic Cameroon will be 
EITI compliant by March 2010, but that the deadline may be 
extended. 
 
Updated 2010 Action Plan for Encouraging Transparency 
 
¶7.  (SBU) The Embassy will push for regular meetings and concrete 
action with the nascent informal working group in the General 
Secretariat of the Prime Ministry, perhaps including it in regular 
meetings of the multi-donor community.  Along with the donor 
community, we will seek regular progress reports on the newly 
published Plan.  The Embassy has in the past hosted successful 
roundtables with NGOs, donors, IFI representatives, and government 
officials to push for progress on budget transparency and will do so 
again in February.  The EITI process will guide public and private 
diplomacy.  Finally, the Ambassador will continue to raise the issue 
with senior government interlocutors. 
 
¶8.  (SBU) Comment:  Government lethargy, corruption and capacity 
limitations hinder overall government effectiveness, including 
greater progress in improving budget transparency.  Nevertheless, 
Cameroon has taken some concrete steps since the Ambassador's 
demarche in August, 2009 and the donor community continues to 
pressure its interlocutors in government to improve transparency. 
The more regular budget execution reports, public moves by the 
Finance Minister, and the independent, albeit late, response by the 
Prime Minister perhaps signal more action on the issue.  A readout 
of the EITI validator visit will also be crucial to gauge Cameroon's 
seriousness.  In the end, post supports yet another waiver for 
Cameroon based on these limited but encouraging efforts. 
Additionally, ending aid, FMF and IMET especially, would undermine 
other USG priorities in Cameroon, including public health 
initiatives, maritime security initiatives, food security, and even 
receptiveness to substantial American commercial interests.  End 
comment. 
 
GARVEY