FISCAL MONITORING CHAIRMAN REPORTS PROGRESS WITH GNU AND

UNCLAS KHARTOUM 000411

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KSCA OTRA EAID CDC SU
SUBJECT: FISCAL MONITORING CHAIRMAN REPORTS PROGRESS WITH GNU AND
GOSS

REF: 07 KHARTOUM 1696

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PROGRESS IN DEALING WITH FINANCE MINISTRY
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1. (U) In contrast to his October 24, 2007 briefing for the
Assessment and Evaluation Commission (AEC) (reftel),Fiscal and
Financial Allocation and Monitoring Commission (FFAMC) Chairman
Mohammed Osman Ibrahim told Poloff on March 13 that he is now
optimistic on cooperation with the Ministry of Finance. He said the
FFAMC has worked out a draft protocol for cooperation with the
Ministry of Finance. While the agreement had stalled with the last
Finance Minister (the incompetent Al-Zubeir) Ibrahim anticipates
increased coordination with the new Finance Minister, Awad Ahmed Al
Jaz. Referring to a previous discussion about the campaign
watchwords of U.S. presidential candidate Barack Obama, he smiled
and said, "Let us wish for hope and change!"

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SOUTHERN STATES WELCOME COOPERATION
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2. (U) PolOff invited Ibrahim to brief the AEC as it prepares its
Mid-Term Evaluation of the CPA process, and Ibrahim tentatively
accepted for the third week of April. Poloff predicted that the NCP
would question Ibrahim about the level of cooperation the FFAMC is
receiving from the GOSS. Ibrahim said that his office has good
working relations with the Government of Southern Sudan (GoSS) and
that his staff had just returned from presenting a technical
training workshop in Juba for officials from the finance ministries
of the various southern states. (Note: At the last meeting of the
Wealth Sharing Working Group, or WSWG, the NCP characterized Dr.
Ibrahim as having complained of a lack of cooperation from the GOSS.
In fact, Dr. Ibrahim had seemed much more concerned by stonewalling
from the GNU Finance Ministry. End note.)

SOUTHERN STATES WANT BIGGER SLICE OF THE PIE
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3. (U) Dr. Ibrahim noted that Southern state finance officials were
"astonished" to learn that the Southern States do not receive the
same percentage of income from the GOSS as northern states receive
from the Khartoum government. Under terms of the CPA, he said, the
southern states receive a total of nine percent of the funds
distributed by Khartoum to the GoSS. In contrast, the northern
states receive 33 percent of the funds retained by the Khartoum
government. This revelation provoked complaints from Southern state
officials that they were being treated unfairly, he said, despite
that fact that this is stipulated in the CPA. (Comment: Lack of
understanding of the CPA is nothing new, and the different
allocations to state governments in the South versus the North
presumably were negotiated this way due to the relative capacity of
state governments to spend the money. End comment.)

Comment
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4. (SBU) We look forward to Dr. Ibrahim's appearance before the AEC
Plenary. Based on his previous experience, we expect he will give a
candid and objective view of the levels of cooperation and the
quality of the information his agency is receiving. His testimony
will be an important part of the AEC's Mid-Term Evaluation document,
to be presented to the Sudanese Presidency by July 9, since the
FFAMC is one of the key institutions providing transparency to the
CPA process. Embassy Khartoum will be drafting the report on
evaluation of Wealth Sharing.

FERNANDEZ