CONTROL AND RESHUFFLING OF THE CENTRAL BANK - DON'T COUNT

UNCLAS CONAKRY 000032

SIPDIS

SIPDIS
SENSITIVE

E.O. 12598: N/A
TAGS: ECIN EFIN ECON EMIN GV
SUBJECT: CONTROL AND RESHUFFLING OF THE CENTRAL BANK - DON'T COUNT
THE CRONIES OUT

REFERENCE: CONAKRY 0021


1. SUMMARY. While a Conte loyalist is still at the helm of the
Central Bank and providing President Conte with access, it appears
that Prime Minister Kouyate has restricted access to the Bank by
Conte's cronies. Meanwhile, the Central Bank Governor has
reshuffled the organization of the Bank as recommended by an audit
of bank operations. END SUMMARY.

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RESHUFFLING AT THE BANK
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2. (SBU) On January 7, Econoff met with the former Director General
of Credit and Exchange for the Central Bank, Mr. Cheick Sylla. Last
week, Mr. Sylla was 'reassigned' by Central Bank Governor Bangora to
be Director of Training - a significantly less important position.


3. (SBU) Mr. Sylla said that Bangora is a President Conte loyalist,
but in his opinion, control of the Central Bank is not a significant
cause of tension between Conte and Prime Minister Kouyate. He
claimed that the main problem between the two men is that the
wording of the restructuring decree gives the Secretary General of
the Presidency (Sam Soumah) the power to coordinate government
actions, a responsibility normally assigned to the prime minister.



4. (SBU) Sylla alleged that there has been a major shakeup at the
Central Bank, promulgated by Bangora. He implied that the
reassignments were political, but would not explicitly say it. All
he would admit is that he disagreed with the way Bangora is dealing
with the IMF.


5. (SBU) However, on January 8, Econoff met with Elhadj Abdoulaye
Diallo, a Director General at the Central Bank, who explained that
the shuffling of assignments at the bank was actually the result of
a study of bank operations. The operations study had been
commissioned by the Prime Minister's office, and the Bank was just
implementing its recommendations. The crux of the recommendations
is to consolidate departments and sections, which reportedly led to
the reassignment of Mr. Sylla as Director of Training.

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CENTRAL BANK: WHO'S YOUR DADDY?
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6. (SBU) The Director General revealed that the president has his
own account at the Central Bank, but that only the president or his
authorized representative can withdraw funds, which must be done
with a check signed by the president. If there is no money in the
account, the President cannot get money until the Ministry of
Finance deposits more. However, he emphasized that all off-budget
spending has been stopped, and that all government spending is based
upon available revenues. (COMMENT: the 2008 budget includes
approximately $20 million dollars for the 'Office of the
Presidency', in which the largest line item is creatively labeled
'Sovereign actions.' END COMMENT.)


7. (SBU) Embassy contacts have reported that sub-cabinet level
bureaucrats are feeling the pinch, and are increasingly desperate
because of the cessation of off-budget expenditures. Another
contact told the Ambassador that for the first time money is flowing
into the Central Bank (from bank deposits) rather than just out.

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COMMENT
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8. (SBU) If the reassignments of Central Bank officers was in
response to the audit, with no overt political motivation, then
perhaps the Governor may have just seized the opportunity to isolate
an internal critic.


9. (SBU) Conte himself still has access to the Central Bank funds
through use of the Presidency budget. However, Kouyate's
administration appears to have successfully restricted access to the
Bank by Conte's cronies who are no longer authorized to make
withdrawals. This could explain the increasing activities by Conte's
entourage at the presidency to destabilize the current government
(reftel),and may result in an increase in friction between the
Conte camp and Kouyate as the old guard continue to lobby the
President. END COMMENT.

CARTER