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Cablegate: Cpa Fiscal Oversight Chairman Shows Independence

VZCZCXRO4880
RR RUEHGI RUEHMA RUEHROV
DE RUEHKH #1696/01 3050507
ZNR UUUUU ZZH
R 010507Z NOV 07
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC 9014
INFO RUCNFUR/DARFUR COLLECTIVE

UNCLAS SECTION 01 OF 02 KHARTOUM 001696

SIPDIS

SENSITIVE, SIPDIS

DEPT FOR AF/SPG, AF/EPS, S/CRS, AF SE NATSIOS
DEPT PLS PASS USAID FOR AFR/SUDAN, AND ALSO PASS USAID

E.O. 12958: N/A
TAGS: PREL PGOV EAID CDC SU
SUBJECT: CPA Fiscal Oversight Chairman shows independence


1. Summary: As Coordinator of the Wealth Sharing Working Group,
Embassy organized a special AEC plenary October 24 featuring Dr.
Mohammed Osman Ibrahim, Chairman of the GOS's Fiscal and Financial
Allocation and Monitoring Commission (FFAMC). The presentation was
organized to seek additional insight concerning the role, duties,
and performance of the FFAMC, particularly given the challenges
faced by the Wealth Sharing Working Group in finalizing its two-year
progress report on CPA implementation. There was a good turnout for
the information session, with representatives from all the
Coordinators' embassies, and most of the observer organizations.
The Wealth Sharing Working Group's matrix on the wealth sharing
provisions of the CPA was formally adopted by the AEC at its October
30 plenary (to be reported separately), and will be presented by the
AEC Chairman to the President of Sudan. End Summary

2. Dr. Ibrahim's 30-minute PowerPoint presentation demonstrated
that the FFAMC is indeed functioning. It has made a good start in
monitoring the various wealth-sharing provisions of the CPA, its
main function. However, in responding to questions from the SPLM,
he stated that his commission was still waiting for information from
various GOS bodies, especially the Ministry of Finance. As long as
the GOS delays providing this information (especially in regard to
oil revenues), the FFAMC will have difficulty fulfilling its
duties.

3. The question and answer phase following the presentation opened
with a question from the SPLM: why isn't the FFAMC publishing all
the figures related to the allocation of oil revenues, not just the
amount allocated to the Government of Southern Sudan (GoSS), but the
larger amount going into the national coffers? Chairman Ibrahim
replied that his Commission had not yet published any information
regarding oil revenues. It has submitted a request for such
information to the Ministry of Finance as part of a list of other
information requests, in a letter dated September 2, 2007. The
FFAMC is still awaiting a response from the Finance Ministry.

4. The SPLM then followed up with other questions relating to
transparency. It asked whether the Finance Ministry was usurping
the FFAMC's duties by publishing itself the information on oil
revenues and determining the allocation of those funds. Dr. Ibrahim
replied forthrightly that "I share your concerns completely." He
said the FFAMC should have a protocol with the Finance Ministry,
consonant with the Wealth Sharing Protocol and the Sudanese
Constitution, delineating how the two bodies are to cooperate. He
thanked the SPLM for their points, saying he would raise the issues
in the Commission's talks with the Finance Ministry.

5. In response to an SPLM question regarding how the FFAMC was
acting to implement the Panel of Experts' recommendations, Ibrahim
said that the recommendations had been passed to the office of the
Presidency, since it was up to the Presidency to distribute
government functions. One of the major duties of the FFAMC, he
added, is to monitor all sources of national revenue, all of which
should go into the National Revenue Fund (NRF). The FFAMC should
also monitor how the funds are distributed, and how they are
utilized after allocation at each level of government.

Equal Opportunity for Southerners?
----------------------------------

6. Responding to a pointed question from the SPLM on why there were
no Southerners among his staff members sitting behind him in the
conference room, Dr. Ibrahim said that he did have one staff member
from the South. He assured the audience that every job on the FFAMC
is open to all applicants on the basis of merit, with no
discrimination made on the basis of race, religion, geographical
origin.

Following the Money not made easier by the GOS
--------------------------------------------- -

7. The SPLM noted that the Chairman himself had drawn attention to
the fact that the national government is taking a larger percentage
of oil revenues from the South than it was entitled to under
provisions of the CPA. (Note: The CPA prescribes 55.2% to the
national government, while actual transfers are 61.6%). Dr. Ibrahim
confirmed that fact, adding that the SPLM was correct in stating
that the FFAMC should act in a monitoring capacity over the Ministry
of Finance, and the latter must act according to the percentages
clearly enumerated in the Wealth Sharing Protocol and the CPA.

8. The NCP delegation addressed this issue, claiming that the
reason for the discrepancy was the result of the signing of peace
accords for Darfur and the East. Those agreements had fiscal
implications, burdening the national government with additional
responsibilities and expenses, he said. In reply to this assertion,
Chairman Ibrahim said flatly that "I hope that explanation is
correct." He stressed again that the NCP and the Finance Ministry
are obliged to follow the clearly-stated percentages. He again
noted that the FFAMC is awaiting a reply from the Ministry of

KHARTOUM 00001696 002 OF 002


Finance. "It is the FFAMC's responsibility to provide answers" in
the interests of transparency, he said.

9. Bringing the meeting to a close, DCM Powers thanked Dr. Ibrahim
for the candor with which he had replied to questions. He
summarized the proceedings, saying that it was obvious to the entire
AEC that the FFAMC faces great challenges, which Dr. Ibrahim and his
staff were acting to meet.

Comment
-------
10. AEC members, particularly the international observers, took
note of Dr. Ibrahim's forthrightness, and his spirit of
independence. He did not hesitate to endorse SPLM concerns, or to
state that the GOS was not abiding by some terms of the CPA. He
described how the Finance Ministry is impeding the FFAMC's work by
not responding in a timely manner to his requests for meetings and
for information. Dr. Ibrahim has extensive past experience as an
official of the National Finance Ministry. He was enthusiastic in
responding to our request that he address the AEC, and stated that
he took the need for transparency in his role as FFAMC chairman
quite seriously. His replies demonstrated that he understands that
he can use the concerns expressed by the AEC as leverage in his
discussion with the GOS. Going forward, we will be looking for
additional ways to support the FFAMC.


FERNANDEZ

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