Identifier
Created
Classification
Origin
10LUSAKA40
2010-01-20 12:02:00
CONFIDENTIAL
Embassy Lusaka
Cable title:  

AMBASSADOR HEARS CRICKETS IN MEETING WITH FINANCE

Tags:  PREL PGOV ECON EAID KCOR ZA 
pdf how-to read a cable
VZCZCXRO2840
RR RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHLS #0040/01 0201202
ZNY CCCCC ZZH
R 201202Z JAN 10
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC 7588
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP 0207
C O N F I D E N T I A L SECTION 01 OF 02 LUSAKA 000040 

SIPDIS

E.O. 12958: DECL: 01/20/2020
TAGS: PREL PGOV ECON EAID KCOR ZA
SUBJECT: AMBASSADOR HEARS CRICKETS IN MEETING WITH FINANCE
MINISTER

REF: A. A. 09 LUSAKA 937

B. B. LUSAKA 20

C. C. LUSAKA 22

LUSAKA 00000040 001.2 OF 002


Classified By: Charge d'Affaires Michael Koplovsky for reasons 1.4(d)

Summary
--------

C O N F I D E N T I A L SECTION 01 OF 02 LUSAKA 000040

SIPDIS

E.O. 12958: DECL: 01/20/2020
TAGS: PREL PGOV ECON EAID KCOR ZA
SUBJECT: AMBASSADOR HEARS CRICKETS IN MEETING WITH FINANCE
MINISTER

REF: A. A. 09 LUSAKA 937

B. B. LUSAKA 20

C. C. LUSAKA 22

LUSAKA 00000040 001.2 OF 002


Classified By: Charge d'Affaires Michael Koplovsky for reasons 1.4(d)

Summary
--------------


1. (C) In a January 15 meeting with Minister of Finance
Situmbeko Musokotwane, the Ambassador highlighted the
progress Zambia made in 2009 towards a Millennium Challenge
Account (MCA) compact (Ref. A),but stressed that the Zambian
government (GRZ) must act now to assuage concerns about the
GRZ's commitment to good governance and anti-corruption
efforts to ensure Zambia's continued compact qualification.
He noted that similar concerns contributed to a re-evaluation
of Zambia's inclusion in the Global Financial Crisis
Initiative (GFCI),during which Zambia was found to be
ineligible for economic reasons. The Ambassador
congratulated the Minister on the January 4 launch of the
GRZ's integrated financial management and information system
(IFMIS),and urged the Minister to continue improving the
GRZ's public financial management capacity. Finally, the
Ambassador asked that the GRZ help to develop a substantive,
high-level policy agenda for the Cooperating Partners Group
(CPG) -- the United States will chair the CPG for the next
six months. While the governance concerns are not new to
Musokotwane, he had little to say in response to any of the
topics raised by the Ambassador, and raised no topics
himself. End Summary.

Ambassador's Message
--------------


2. (C) In a January 15 meeting with Situmbeko Musokotwane,
Minister of Finance and National Planning, the Ambassador
highlighted the tremendous progress Zambia made in 2009
towards an MCA compact. He cautioned Musokotwane that during
discussions that led to Zambia's compact eligibility
re-selection, the Millennium Challenge Corporation (MCC)
board expressed concerns about the GRZ's commitment to good
governance, anti-corruption efforts and freedom of speech and
expression, essential to Zambia's continued qualification for

a compact. The Ambassador noted that the board's concerns
were serious enough that MCC CEO Daniel Yohannes mentioned
them specifically in his January 4 letter to President Banda.


3. (C) The Ambassador stressed that the GRZ had time to
address the MCC's (and broader USG) concerns about its
commitment to good governance and anti-corruption efforts,
but said that the GRZ must not wait to take action. He
listed several steps the GRZ could take, including
strengthening the Anti-Corruption Commission, creating a
dialogue with Civil Society Organizations (CSO),including
CSOs critical of the current administration, and continuing
to work with media associations on self-regulatory structures
to avoid restrictive government regulation of the media.
While conceding that the GRZ was unlikely to win all CSO
hearts and minds, the Ambassador stressed that communication
with CSOs would be a positive step, and engagement could mean
reassurance that the GRZ was committed to transparent and
open governance to some local organizations that provide
input into indicators used by the MCC.


4. (C) The Ambassador also noted that in 2009 Zambia was
considered for up to USD 25 million in assistance under the
Global Financial Crisis Initiative (GFCI). When similar
concerns about governance and corruption caused the USG to
re-evaluate Zambia's inclusion in GFCI, however, Zambia was
deemed ineligible based on its relatively positive economic
performance.


5. (C) Turning to budget transparency and public financial
management, the Ambassador congratulated the Minister on the
January 4 launch of IFMIS at the Ministry of Finance and
National Planning. While noting the good progress that Zambia
has made, the Ambassador urged the Minister to continue
improving the GRZ's financial management capacity by rolling
out IFMIS to all ministries and adopting a treasury single
account, and to pass a Freedom of Information Act to increase
government transparency in general (Ref. B). The Ambassador
explained the requirements for some countries to receive a
waiver to allow continued U.S. assistance if their budget
development and execution was not considered transparent, and
noted that, while Zambia received a waiver for FY2009, it was
not yet known whether a FY2010 waiver was required for
continued assistance.


6. (C) Finally, the Ambassador asked the Minister what the
GRZ would like to accomplish with the Coordinating Partners

LUSAKA 00000040 002.2 OF 002


Group (CPG) during the six months that the United States
would chair the group. The Ambassador noted that the CPG
agenda had been dominated by governance issues, and more
generally by issues determined by cooperating partners. To
be an effective forum for dialogue, the CPG should be more
balanced to focus on high-level policy discussions and not
just focused on trouble-shooting.

Minister's Limited Response
--------------


7. (C) If the GRZ is engaged in a charm offensive with the
United States, Musokotwane did not get the memo (Ref. C). He
was his usual taciturn self, and sat silently to, in his
words, "hear his sins" throughout much of the meeting. The
Minister had little to say in response to the MCC board
governance concerns, which were not new to him, and replied
that it was "fair" that Zambia did not receive GFCI funding
because its economy did bounce back quickly. Musokotwane
asked for a list of the African countries that could
potentially need budget transparency waivers to receive U.S.
assistance, and asked that the Ambassador "drop him a note"
about upcoming CPG agendas so that he could consult with his
colleagues.

KOPLOVSKY