Identifier
Created
Classification
Origin
05NDJAMENA1015
2005-06-27 06:46:00
UNCLASSIFIED
Embassy Ndjamena
Cable title:  

CHAD INQUIRES ABOUT G8 DEBT RELIEF

Tags:  ECON EFIN ENRG PGOV CD 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

270646Z Jun 05

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AMEMBASSY BAMAKO 
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AMEMBASSY NIAMEY
UNCLAS NDJAMENA 001015 

SIPDIS


DEPT FOR AF, EB, ENERGY FOR CAROLYN GAY AND GEORGE PEARSON,
TREASURY FOR OTA, LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: ECON EFIN ENRG PGOV CD
SUBJECT: CHAD INQUIRES ABOUT G8 DEBT RELIEF


UNCLAS NDJAMENA 001015

SIPDIS


DEPT FOR AF, EB, ENERGY FOR CAROLYN GAY AND GEORGE PEARSON,
TREASURY FOR OTA, LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: N/A
TAGS: ECON EFIN ENRG PGOV CD
SUBJECT: CHAD INQUIRES ABOUT G8 DEBT RELIEF



1. (U) The following message is Sensitive But Unclassified.
Please protect accordingly.


2. (SBU) SUMMARY: The Minister of Finance is very concerned
that, despite oil revenues, Chad is facing intense financial
pressures and needs to be considered for G8 debt relief
proposals. In a recent meeting, he also stated that the
government is committed to transparent fiscal practices, and
would welcome international involvement in budgetary
revisions in 2006. The IMF has made it clear that Chad
could be considered for debt relief under the G8 proposals
once it reaches its HIPC completion point, but does not see
that happening soon.


3. (U) In a meeting on June 13 with the Ambassador and
Economic/Consular Officer, Finance Minister Ngeuyam Djaibe
appealed for international assistance. The Minister pointed
to the recent announcement of G-8 debt relief proposals for
18 HIPC countries. He expressed hope that Chad would be
eligible for these benefits, prticularly since its
resources are being spent o security and humanitarian
assistance for Sudanee refugees in Eastern Chad. He also
noted that Cad's external debt is a significant drain on
theeconomy (2 billion CFA annually),and prevents the
country from financing its infrastructure needs.


4. (U) The Minister said previous economic bright spots are
now somewhat dim. He noted that the government's
expectations of the oil revenues have been dampened
following the realization that Doba crude is being sold at a
barrel price far lower than expected. He also explained the
government's concern about the World Bank's demand for the
privatization of CotonTchad by 2007, noting that while the
government is aware of the importance of cotton for local
community, it is not sure if rapid privatization is
necessarily the solution to alleviating the plight of
failing parastatal. Finally, Djaibe noted that while the
GOC has done a great deal to revamp the electrical grid
infrastructure, it lacks enough diesel fuel to power the
system. The Minister pleaded for greater U.S. and
international awareness of the country's plight.


5. (U) The Ambassador noted that eligibility for a program
of debt reduction would depend on its reform program. He
told Djaibe that implementation of the GOC's plan for
petroleum revenue management and budgetary transparency
would put the country in a better position for possible
future benefits. In response, the Minister stressed his
committment to fiscal reform. The minister asserted that he
would defend current petroleum laws, and ensure that
revenues are managed transparently. He also told the
Ambassador that the government would welcome the input of
the international community when Chad's national budget
would be up for review in 2006.


6. (SBU) IMF Representative Wayne Camard told
Economic/Consular Officer on June 24 that he had also
addressed the issue of Chad's chances to receive debt relief
in a meeting with Djaibe and the President's Economic
Advisor on June 13. Camard said that he explained to the
Minister that Chad could receive the same benefits obtained
by the 18 HIPC countries once it reaches its HIPC completion
point. According to Camard, the Minister responded
positively to this comment. Camard also told
Economic/Consular officer that while he does not see Chad
meeting the requirements for the completion point anytime
soon, he is pleased with reforms within the Ministry to
improve its capacity to manage the national budget.


7. (SBU) COMMENT: The government is clearly feeling a great
deal of domestic economic pressure, and hopes for relief.
The burden of responding to the security threats and refugee
inflows on its eastern border with Sudan requires
expenditures it cannot afford. We will continue to remind
the GOC of the need to implement its PRSP program, including
improving fiscal transparency and adhering to the Revenue
Management College, if it ever wishes to benefit from
possible future debt relief opportunities.


WALL


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