IMF DELEGATION IN NDJAMENA TO PURSUE THE FUND'S

UNCLAS SECTION 01 OF 02 NDJAMENA 000534

C O R R E C T E D C O P Y (CLASSIFICATION - UNCLAS)

SENSITIVE
SIPDIS

LONDON AND PARIS FOR AFRICA WATCHERS

E.O. 12958: DECL: 11/13/2018
TAGS: ECON EFIN IMF PGOV PREL US IBRD MASS CD
SUBJECT: IMF DELEGATION IN NDJAMENA TO PURSUE THE FUND'S
"PRAGMATIC" ENGAGEMENT WITH CHAD

REF: A. NDJAMENA 519

B. NDJAMENA 509

C. NDJAMENA 288

NDJAMENA 00000534 001.4 OF 002


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SUMMARY
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1. (SBU) The head of the current visiting IMF delegation
told the Ambassador Nov 12 that the visit was aimed at
helping Chad get to the budgetary performance point at which
the IMF could hope to put a Staff-Monitored Program in place.
The IMF wanted to help Chad's public finance team craft a
reasonable 2009 budget. If the GOC could craft a proper
budget and then show that it was adhering to sound public
finance management procedures under it, the IMF could plan to
visit again in the first quarter of 2009 to conceivably put a
six-month-long Staff-Monitored Program in place at that time.
The IMF team leader noted the GOC's lack of budgetary
discipline in many areas, but said that he believed that the
Prime Minister and his new Finance Minister were trying to do
the right thing, but that others in the cabinet were not as
friendly to the IFIs and far less willing to cooperate with
them. We continue to admire the IMF's tenacity in
maintaining a working relationship however frayed with Chad.
The tale of Chad's budgetary deficiencies is an old one. We
continue to hope that the IMF's patience with the GOC will
finally start to pay off in 2009, but we are not/not yet
prepared to bet on that outcome. END SUMMARY.



2. (SBU) The Ambassador received the head of the IMF
Article IV (Surveillance Mission) delegation to Chad, Mr.
Sukhwinder Singh, and the local IMF representative Joseph
Karangwa, November 13. They briefed on the progress of the
current visit and prospects for a better Chad-Fund
relationship in the future.


3. (SBU) Singh reviewed the recent history of the Fund's
engagement with Chad, emphasizing that the IMF's approach was
a "pragmatic" one. After repeated failures of formal
programs, the IMF had attempted last July to put in place a
less formal, "Staff-Monitored Program." That too, failed.


4. (SBU) The current IMF visit was aimed at helping Chad
get to the point where the IMF could hope to put a
Staff-Monitored Program in place. The IMF wanted to help
Chad's public finance team, now led by competent technocrat
but political novice Gata Ngoulou (Finance Minister since
September 2008),craft a reasonable 2009 budget. If the GOC
could craft a proper budget and then show that it was
adhering to sound public finance management procedures under
it, the IMF could plan to visit again in the first quarter of
2009 to examine progress to date. If there were indeed
progress, the IMF could conceivably put a six-month-long
Staff-Monitored Program in place at that time.


5. (SBU) Singh noted the GOC's lack of budgetary discipline
in many areas. One problem area was in the security/defense
sector. Singh said that the IMF was not opposed to including
substantial security/defense sector spending in the 2009
budget, but the GOC must be more transparent in the line
items that made up the security/defense sector. It was not
clear to the IMF just how many people were in the Chadian
military: The GOC seemed to be paying 70-80,000 people, but
it was not clear who or where they were and what they were
doing. The GOC was telling the IMF that it would cut 2009
spending on military hardware by 75 percent from the 2008
level, but this seemed a very difficult accomplishment,
however laudable. Singh said that Chad's capital spending in
priority/social sectors -- health, education, roads -- was
quite large, but that there was an utter lack of ministerial
planning, follow-up, and coordination that rendered many
capital projects useless. (Examples: schools without
teachers or books; health clinics without staff or medicine.)
In addition to taking a toll on Chad,s fiscal position, the
unfinished projects could have political and social
ramification because of unfulfilled expectations. Some key
sectors, especially water and electricity, were not targeted
for capital spending, which was holding back development.


6. (SBU) Singh said that he believed that Prime Minister
Youssouf Saleh Abbas and his new Finance Minister were trying
to do the right thing, but that others in the cabinet were
not as friendly to the IFIs and far less willing to cooperate

NDJAMENA 00000534 002.4 OF 002


with them. Singh also said that the recent visit by the
World Bank was encouraging, because the Bank and the Fund
preferred to work in collaboration, which the absence of a
resident Bank representative here made difficult.

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COMMENT
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7. (SBU) We continue to admire the IMF's tenacity in
maintaining a working relationship however frayed with Chad.
The tale of Chad's budgetary deficiencies is an old one. We
continue to hpe that the IMF's patience with the GOC will
finlly start to pay off in 2009, but we are not/not yt
prepared to bet on that outcome.

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