NIAMEY: AMBASSADOR MEETS WITH FINANCE MINISTER

UNCLAS SECTION 01 OF 02 NIAMEY 000336

DEPT FOR AF/EPS, AF/W and USAID/AFR

PARIS FOR AFRICA WATCHER

SIPDIS

SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: ECON EIND PGOV KMCA EAID NG
SUBJECT: NIAMEY: AMBASSADOR MEETS WITH FINANCE MINISTER


1. (SBU) SUMMARY: Ambassador Allen, accompanied by Embassy
Econ/ConsOff (notetaker),met with Ali Mahamane Lamine Zeine,
Minister of Economy and Finance on May 8, 2009, at Zeine's request.
He called attention to Niger's high growth rate in 2008 and
expressed the Government of Niger's (GON) interest in attracting
private sector investment from the U.S. In the context of the
Ambassador's comments about U.S. plans to support coming Nigerien
elections and public debate over constitutional provisions that
limit the President to two terms, the Minister opined that the
matter of mandates would have to be revisited at some point because
the people of Niger had been forced to accept the current
constitution "as is" when presented for consideration under the
former military government.

-------------- --------------
BILATERAL COOPERATION
-------------- --------------

2. (SBU) The Minister lauded the good bilateral relations between
Niger and the U.S., including support in development and security
issues. He said he follows press coverage of the Ambassador's
travel throughout the country and her involvement with the people of
Niger in activities ranging from schools to food security to sports
events. He mentioned the U.S. Government "very efficient but
discrete" assistance in the 2000 elections in warning governments of
certain neighboring countries against interference.


3. (U) The Ambassador noted that the Embassy has been working to
identify funding for assistance related to the elections due later
this year. With regard to the ongoing assistance provided by the
U.S. Department of Treasury Office of Technical Assistance (OTA),
the Ambassador noted that GON had not yet signed the Terms of
Reference (TOR),putting the project at risk in potential budget
cuts. The Minister responded by signing the TOR on the spot and
returned both the French and English copies during the meeting.

-------------- ---
ECONOMIC CONDITIONS IN NIGER
-------------- --------------

4. (U) The Minister welcomed the opportunity to provide an overview
of the economic situation in Niger, and stated that Niger's 2008
economic growth of 9.5 percent was the highest in Africa. He
attributed this to three major factors: an exceptional harvest due
to prolonged good rains; strong public and private investment,
including foreign investment in telecoms, energy and mining; and the
good state of public finances. He described several cases in which
he had acted to reduce corruption in government procurement, and
attributed fiscal health to better control of public spending
coupled with increased revenues. Thanks in part to the success of
the OTA project, tax receipts were 113 percent of anticipated
amounts, and customs revenue was also above budget. Still, there
are large challenges ahead: to continue progress on investment,
especially industrial investment; and to address societal demands
for higher income.


5. (U) The Minister noted public debate and questions about the
exceptional income from the petroleum contract signed with the
Chinese, confirming that over CFA 204 billion had been deposited in
the treasury general fund as a result of the Chinese "signing
bonus." He attributed the difference between the original amount
anticipated and the actual amount deposited to exchange rate
fluctuations between the announcement of the bonus and the day it
was actually received, but insisted all the funds were used to fund
increases across the budget. Similarly, he stated that revenue from
the mining sector, totaling CFA 50 billion, has been deposited in
the general fund and applied to regular spending. The Minister
noted three ongoing projects that are critical to maintaining
economic growth: the auxiliary development plan financed by the EU;
US financial support through the Millennium Challenge Account (MCA)
mechanism, and the dam at Kandadji under construction with funding
from Saudi Arabia and the United Arab Emirates. He stated that the
potential contribution of these three activities is more certain
than that of uranium or oil.

-------------- ---
QUEST FOR U.S. INVESTMENT
-------------- ---

6. (SBU) The Minister asked for assistance in attracting private
sector investment from the U.S., noting that promising areas include
agriculture, small engineering, livestock, tourism and handicrafts,
and mining. He added that the government sees France and China as
long term partners, but it is essential to balance them with
investment from other sources.
The Ambassador mentioned that the Embassy of Niger in Washington DC
should work on more visibility for Niger in the U.S., do more to
sell Niger to attract potential American investors. She commented

NIAMEY 00000336 002 OF 002


on the importance of security for investors, including economic
stability, an impartial legal system, and transparency. She added
it would be helpful for the government to maintain an active website
to help inform potential investors of Niger's potential. The
Minister agreed on that point and responded that his Ministry is
working on such a website. On the issue of press freedom, the
Minister responded that GON actions were directed only at those who
made false and misleading allegations.


7. (U) The Minister concluded the meeting by noting the government's
struggle to identify new sources of income, such a US$ 10 million
grant from the EU for capacity building, in order to provide the
government with badly needed skills in all areas of administration.
He expressed his confidence that the people of Niger will prevail
over the economic challenges they face.

ALLEN