This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 002645 
 
SIPDIS 
 
 
E.O. 12958: DECL: 10/16/2011 
TAGS: ECON EFIN ETRD PTER NI
SUBJECT: NIGERIA: PRESIDENT'S CHIEF ECONOMIC ADVISOR EAGER 
TO WORK CLOSELY WITH USG ON ALL ECONOMIC ISSUES 
 
 
REF: (A) STATE 169975 (B) STATE 170551 
 
 
Classified by Ambassador Howard F. Jeter for Reasons 1.5 (b) 
and (d). 
 
 
¶1. (U) Summary.  Ambassador Jeter met the President's Chief 
Economic Advisor Magnus Kpakol October 11 to discuss a range 
of bilateral economic issues, including the structure of the 
successor to the Joint Economic Partnership Committee (JEPC) 
and possible actions for Nigeria to crack-down on the 
financial assets of terrorists.  Kpakol committed to working 
with the U.S. on the New Africa Initiative, the proposed 
bilateral Economic Committee, and measures to stem terrorist 
money laundering.  The Chief Economic Advisor predicted a 
positive outcome for the incoming IMF Mission.  He also 
stressed the need to increase bilateral trade and investment 
in non-oil sectors.  End Summary. 
 
 
¶2. (U) On October 11, Ambassador Jeter called on the Chief 
Economic Advisor to the President, Magnus Kpakol.  USAID 
Country Director Tom Hobgood, USAID EconOff and Embassy 
EconOff (notetaker) also attended. 
 
 
----------------------------------- 
Anti-terrorism and Money Laundering 
----------------------------------- 
 
 
¶3. (SBU) Explaining FATF's designation of Nigeria as a 
Non-Cooperative Country/Territory (NCCT), Ambassador Jeter 
emphasized the importance of strengthening domestic controls 
over money laundering and other financial crimes (per 
reftels).  The Ambassador suggested that this issue would be 
a litmus test of Nigeria's commitment to combat terrorist 
activities on all fronts.  Nigeria needed to amend existing 
regulations to increase banks' accountability to the GON, 
widen the scope of anti-money laundering legislation, and 
criminalize money laundering by terrorist groups and/or their 
supporters.  Nigeria would also need to establish a central 
agency to coordinate the fight against financial crimes. 
Kpakol took on board the Ambassador's observations, stating 
that this issue has not only critical importance to the U.S., 
but also to Nigeria maintaining control over its economy. 
 
 
----------------------- 
New Africa Initiative 
----------------------- 
 
 
¶4. (U) Just returned with President Obasanjo from an 
overnight trip to Brussels, Kpakol was pleased with the 
European Union's interest, as expressed by the Belgian Prime 
Minister, in the Africa Initiative and the new African Union 
(AU).  The five participating African Heads of State 
(Obasanjo, Mbeki, Wade, Chiluba and Bouteflika) were well 
received, as was their concept to integrate the Omega Plan 
and Millennium Action Plan into the Africa Initiative to be 
implemented under the aegis of the AU.  Kpakol reported that 
the Belgium PM and EU Secretariat hoped to establish a 
permanent office at the AU and promised to raise the issue at 
the next G-8 meeting.  Kpakol endorsed Ambassador Jeter's 
idea that the GON should brief G-8 Ambassadors in Nigeria on 
the proposed Africa Initiative.  The Initiative, Kpakol 
extolled, was truly an African-driven program that would hold 
member-states accountable for democratic governance and 
conflict resolution.  The Initiative also captured African 
nations' desire to connect national transportation and energy 
infrastructures.  However, Kpakol commented, the Initiative 
lacked sufficient resources; the AU would look to the EU and 
G-8 for help, he said. 
 
 
----------------------------------------- 
Increasing Bilateral Trade and Investment 
----------------------------------------- 
 
 
¶5. (U) Kpakol hoped for progress in the U.S. - Nigeria 
commercial relationship during his tenure as Chief Economic 
Advisor.  Strongly seconding his wish, Ambassador Jeter said 
that, while in Washington, he discussed with the Corporate 
Council on Africa avenues U.S. companies should pursue when 
doing business in Nigeria.  The Ambassador commented that 
skepticism within the U.S. business community remained a 
problem.  Despite the success of U.S. oil and gas companies, 
most non-oil sector companies want concrete non-oil success 
stories before investing in Nigeria. Thus, they all are 
waiting to see who goes first. 
 
 
¶6. (U) Kpakol attributed the lack of success to two reasons. 
First, the strength of the oil and gas industry had caused 
the country to neglect non-oil sectors.  Second, the U.S. 
private sector needed to become more focussed and committed 
in their interactions with Nigerians.  Ambassador Jeter 
concurred, recounting he had discussed this with U.S. 
companies.  The Ambassador had explained to them that the 
Nigerian market was peculiar in that foreign companies cannot 
merely submit bids for public contracts, then wait at home 
for the award letter.  American companies need to be visible 
on the ground, preferably with a Nigerian partner, to spend 
time discussing the project with officials at all levels of 
government.  Developing a relationship with their Nigerian 
business partners, both public and private, will be critical 
to the success of U.S. companies in Nigeria.  Kpakol 
commented that U.S. companies unfortunately perceive Africa 
as distant and somewhat peripheral to U.S. interests whereas 
European businesses have recognized the importance Africa can 
play in the global economy. (They also recognize handsome 
profits can be made when a company stays the course.) 
 
 
--------------------------------------------- ---- 
Restructuring the Joint Economic Partnership Committee 
--------------------------------------------- ---- 
¶7. (SBU) Ambassador Jeter explained that in discussions 
earlier this year, both sides had expressed dissatisfaction 
that JEPC had not produced concrete results.  Consequently, a 
U.S. interagency committee met to recommend how a "son of 
JEPC" might be structured.  The interagency committee had 
recommended creation of three committees -- Economic, Defense 
and Law Enforcement -- to be led by senior policymakers.  The 
Economic Committee would address agriculture, energy, 
education, transportation, environment and other related 
issues.  The Committee would decide what sub-committee level 
working groups to establish and provide them with concrete 
objectives.  The working groups would formulate action plans 
with each side responsible for completing discreet steps 
towards the agreed objectives.  This system, the Ambassador 
believed, would inject accountability and measurability into 
the bilateral economic relationship.  The Ambassador also 
suggested that the working groups might include private 
sector and state-level participants, contingent on the wishes 
of the GON.  Kpakol welcomed these recommendations, 
suggesting his office would spearhead the Economic Committee 
concept. 
 
 
--------------------------- 
International Monetary Fund 
--------------------------- 
 
 
¶8. (SB) Finally, the Ambassador asked about the IMF program. 
Optimistic that meetings with the incoming IMF team would be 
more productive than the last IMF visit, Kpakol said, "we 
have a good understanding now."  He noted two areas of 
particular importance -- the exchange rate regime and 
government spending -- that the two sides needed to work 
closely.  Expressing a common sentiment amongst GON 
officials, Kpakol opined that the IMF originally had arrived 
in Nigeria with unrealistic expectations.  The IMF must 
recognize that political exigencies often limit economic 
decision-making.  With elections looming over the horizon, 
the IMF cannot expect the program to progress as earlier 
envisioned.  However, he said, the GON would be more capable 
of implementing tough programs after the 2003 elections. 
 
 
¶9. (C) Biographic Information.  Kpakol took over the office 
of Chief Economic Advisor in June 2001 after former CEA Chief 
Philip Asiodu was retired.  Kpakol spent the last 25 years in 
Houston, Texas where he was a University professor.  As such, 
Kpakol is familiar with U.S. perceptions of Africa and with 
U.S. idiosyncrasies; Post expects that he will be a helpful 
interlocutor on all bilateral economic issues.  End 
Biographic Information. 
 
 
Jeter