FY09 PROHIBITION ON ASSISTANCE TO CENTRAL

UNCLAS YAOUNDE 000369

SIPDIS

STATE FOR AF/C

E.O. 12958: N/A
TAGS: EAID ECON PREL KCOR
SUBJECT: FY09 PROHIBITION ON ASSISTANCE TO CENTRAL
GOVERNMENTS WHOSE BUDGETS ARE NOT TRANSPARENT

REF: SECSTATE 28885


1. (SBU) Summary. The Government of Cameroon (GRC)
publishes annually the proposed budget as passed by the
National Assembly and approved by the Presidency. The
published budget allows the public to review some information
regarding projected revenues and expenditures, but the GRC's
actual income and expenditures are believed to vary widely
from the publicly announced appropriations, and it is not
possible for Cameroonian citizens to obtain detailed
information regarding actual GRC revenues and expenditures.
Embassy contacts with expertise in analyzing government
budgeting processes indicate that Cameroon's ability to track
its own budget is among the worst in Africa. End summary.


2. (SBU) The following information is keyed to reftel
tasking:

a. The GRC is already receiving U.S. foreign assistance
funds from the FY09 SFOAA.

b and c. The GRC makes public its annual finance law, which
includes projected revenues and expenditures for the coming
year. This information is published widely in the official
and private media. Cameroonian citizens are able to obtain
more details regarding the projected budget by purchasing the
Official Gazette, which costs about 500 CFA (about $1).
Under the terms of its recently concluded program with the
IMF, the GRC was publishing quarterly updates on budget
execution on a broad level (ministry by ministry). The
quarterly reports ceased, without explanation, when the IMF
program concluded earlier this year. The GRC also publishes
a review of the execution of the previous year's budget, but
this information is available only on a macro level, without
details for how funds were spent.


3. (SBU) The Embassy believes there is significant variance
between the projected budget and the budget as it is actually
executed. Embassy contacts tell us that the GRC does not
have the capacity to track its own budget execution because
there is no interface among various computer programs used by
the Office of the Budget (which plans the budget) and the
Office of the Treasury (which spends the money),meaning even
the Minister of Finance is incapable of giving a detailed
account for how funds were spent. Additionally, numerous
civil society organizations have reported difficulty in
obtaining detailed expenditure information for their efforts
to track budget execution in certain localities or in certain
sectors. For many years, the GRC was engaging in off-budget
spending, including especially use of oil revenues to finance
security and defense projects. This practice was
increasingly reduced during the GRC's participation in the
IMF program, but recent reports indicate the GRC is again
spending substantial sums "off-budget."


4. (SBU) Comment. Post is supportive of this effort to
encourage transparency in the budget process. We believe it
would be counterproductive to cut off FY09 assistance,
largely because such a precipitous decision will be poorly
understood by the GRC officials we are trying to influence.
We might, however, use this opportunity to inform the GRC of
the risk of losing future assistance if steps are not taking
to improve tracking and transparency in the budget planning
and execution phases. End comment.
FOX