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Cablegate: Western Donors Express Concerns About Budget And

VZCZCXRO8084
PP RUEHMA RUEHPA
DE RUEHDK #1190 2911207
ZNR UUUUU ZZH
P 171207Z OCT 08
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 1278
INFO RUEHZK/ECOWAS COLLECTIVE

UNCLAS DAKAR 001190

SIPDIS

DEPARTMENT FOR AF/W

E.O. 12958: N/A
TAGS: PGOV PREL ECON EFIN SG
SUBJECT: WESTERN DONORS EXPRESS CONCERNS ABOUT BUDGET AND
ARREARS TO PRIME MINISTER

1. (SBU) Summary: Charge accompanied a delegation of
Ambassadors and international organization representatives to
the Prime Minister,s office on October 10 to seek an update
and clarification of the GOS,s payment arrears, off-budget
expenditures and plans for the Government to bring accounts
into balance. The meeting yielded only a fragmentary
explanation and a promise to provide more details at a later
date. End Summary.

2. (SBU) In response to increasing alarm and consternation
over the disheveled state of Senegalese national accounts,
the Charge joined a delegation led by the EC Ambassador and
including the Ambassadors of France, Canada, Germany, and the
Netherlands, as well as representatives from the World Bank
and Islamic Development Bank to seek more information from
the Prime Minister Cheikh Hadjibou Soumare. The non-U.S.
participants all had greater and more urgent stakes in the
discussions as many of their assistance programs contribute
directly to budgetary support or will hinge on Senegal,s
positive performance in an imminent IMF program review.

3. (SBU) The Prime Minister, who was flanked by new Budget
Minister Abdoulaye Sow, was asked specifically to account for
the Government,s failure to make good on massive accumulated
arrears to Government vendors, off-budget expenses for items
such as official travel and the transfer of a very large real
estate tract to guarantee financing for payment to the North
Korean firm constructing the President,s gigantic, USD 20
million African Renaissance monument, and government plans to
restore and maintain fiscal responsibility.

4. (SBU) The Prime Minister was unable to provide detailed
responses to any of the queries, instead referring to a study
now being conducted by the Budget Minister and promising to
share detailed findings at a later date. He said Senegal had
been placed in a vise by rising world prices for food and
petroleum products and had been forced to engage to subsidies
to try to avoid a degradation of living standards. He
acknowledged that this strategy was not a viable in the
long-term and that unspecified new approaches would need to
be found. He asked for donors, patience in responding to
the request for an accounting of Government arrearages,
stating that, due to the legerdemain of the recently
dismissed Budget Minister Ibrahima Sarr, the GOS did not have
reliable figures on the amount of money owed. The Prime
Minister promised to share detailed findings when available.

5. (SBU) Comment. While the meeting fell far short of its
objectives, it did serve to give notice to the Government of
the depth of donor concern over the disarray in Senegalese
national accounts. The delegation came away from the meeting
with a sense that it may not be unreasonable to expect a more
exact picture of Senegal,s overall finances than has been
available in the recent past. However, it is worth noting
that the impact of the message was perhaps undermined by the
October 14 announcement by the French Ambassador that his
country was giving Senegal more than USD 40 million to
recapitalize Senelec, the national power company. End
Comment.
SMITH

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