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

UNCLAS SECTION 01 OF 03 ABUJA 000387 
 
SIPDIS 
 
 
AF/W, E FOR APENCE, NSC 
 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV NI
SUBJECT: NIGERIA: PROPOSED POST-JEPC BILATERAL ECONOMIC 
COMMITTEE 
 
 
¶1. This cable contains an action request in para 14. 
 
 
¶2. During extensive discussions with GON officials late last 
year and throughout this month, including the President's 
Chief Economic Advisor (CEA), we have reached general 
agreement on a way forward on a post-JEPC arrangement.  This 
new arrangement mixes elements of a new approach to economic 
cooperation with those elements of the former JEPC that 
should be continued.  The JEPC focused almost exclusively on 
discussions regarding policy and institutional reform.  This 
top-down perspective remains a major component of the new 
model.  However, to stimulate actual business ventures and 
activities that demonstrate the benefits of reform, the new 
model weds the top-down with a bottom-up approach.  Under 
this complementary arrangement, the proposed Economic 
Committee would form working groups on non-oil trade, direct 
investment, agricultural infrastructure and energy to 
identify and facilitate discrete projects and activities. 
This structure would require the identification of feasible 
projects/activities and would wed this identification to a 
focus on problem-solving in order to turn the feasible into 
actual progress on the ground. 
 
 
¶3. To effectuate this new approach, the working groups would 
meet more frequently than the full Committee in order to 
achieve substantive progress on the concrete objectives in 
the enumerated sector.  The Committee could meet 
periodically, for example, semi-annually or annually, while 
the working groups would convene as appropriate, perhaps 
monthly in Abuja and quarterly with some or all Washington 
participants. 
 
 
-------------- 
Time and Place 
-------------- 
 
 
¶4. The initial meeting of the Lead Committee has been 
proposed for April 16-17 or May 7-8, 2002.  Both sides agree 
to hold the first meeting in Washington to best serve the 
goal of maximizing high-level U.S. government and private 
sector participation. 
 
 
------------ 
The Process 
------------ 
 
 
¶5. The Mission and GON have basically outlined the following 
sequence of preparations for the Washington session. 
 
 
-- First, we have informally constituted a U.S.-GON 
preparatory committee comprised of U.S. Mission elements 
(Pol/Econ and USAID) and GON officials (CEA office, Commerce 
Ministry, Vice President's office). 
 
 
-- Second, with Washington's assent, the Embassy will draft a 
working paper that outlines the concepts of the new JEPC. 
This paper will be shared with GON members of the preparatory 
committee and is intended to memorialize our mutual agreement 
to the new approach and to serve as the foundation for 
further preparations.  The working paper will exactly mirror 
the information contained in this cable. 
 
 
-- Third, after the GON endorses the working paper, the 
preparatory committee will hold meetings on the particular 
working groups to be recommended to the Lead Committee in 
Washington.  For each working group, the preparatory 
committee will develop papers containing recommendations 
focusing on the projects for the working group and 
composition of the working group, i.e., what U.S. and Nigeria 
agencies will be members of which groups. 
 
 
-- Fourth, the deliberations of the preparatory committee 
will also develop recommendations on the agenda and make-up 
of the delegation to the Lead Committee meeting. 
Additionally, it will make recommendations regarding private 
sector and state and local government participation in the 
Lead Committee sessions and for the working groups. 
 
 
-- Fifth, the Lead Committee will meet.  The Lead Committee 
is exactly what the name suggests -- it is the committee that 
provides overall policy guidance and the bureaucratic muscle 
needed to make this approach work.  It is the Lead Committee 
that tasks the working groups and from which these working 
groups get their mandate.  As such, the Lead Committee will 
discuss the framework issues of investment, trade, 
agriculture and energy, providing policy direction on how 
these issues should be pursued within the working groups. 
The Lead Committee will also discuss and approve/reject the 
recommendations made by the preparatory committee regarding 
the membership and mandate of the working groups, the 
projects/activities for each group and private sector and 
state government participation in the working group. 
 
 
---------------------- 
Five Working Groups 
---------------------- 
 
 
¶6. The Mission and GON have preliminarily agreed to suggest 
five working groups to the Lead Committee.  For each working 
group, the Committee would identify specific activities or 
case studies.  For example, the Investment Working Group may 
be tasked with the case study of helping to revive the 
textile industry in Kano through domestic, U.S. or perhaps 
other foreign investment.  By identifying obstacles to 
bringing in U.S. investment in textiles, the working group 
would develop solutions to problems in Kano as well as 
determine if these solutions have more general application in 
the Nigerian economy. 
 
 
¶7. Each working group would have a core group of members from 
both the Nigerian and U.S. sides that would participate in 
all activities of that working group.  Also, each group would 
have ancillary members agencies and persons who might be 
called to attend particular working group sessions dealing 
with an issues within that agency's or person's ken.  The 
five suggested working groups are: 
 
 
----------------------------- 
Investment in Non-Oil Sectors 
----------------------------- 
 
 
¶8. This working group would focus on identifying and bringing 
to fruition actual non-oil direct investment.  Possibilities 
for this working group include investment in Kano's textile 
sector, Kaduna's solid minerals sector, and Nigeria's housing 
sector.  The core working group would include the State 
Department, USAID and Department of Commerce on the U.S. 
side.  The Office of the Vice President, Office of the Chief 
Economic Advisor, Ministry of Commerce and Nigerian 
Investment Promotion Council would form the core elements on 
the Nigerian side.  To address a specific objective, such as 
Kano's textile sector, TDA, OPIC and EXIM might be involved 
on the U.S. side while the Kano State government would be 
involved on the Nigerian side. 
 
 
¶9. Investment in Nigeria's housing sector is another specific 
objective that could be tasked to this working group.  The 
lack of sufficient low- and medium-income housing in urban 
areas has become a major political issue for the Obasanjo 
Administration.  Providing relief in this area would have a 
positive impact on the lives of average Nigerians and be 
viewed as a demonstrable 'democracy dividend'.  TDA is 
currently reviewing a proposal to conduct a feasibility study 
on developing a secondary mortgage financing market.  Based 
on the study's recommendations, the working group could 
assemble the know-how and provide impetus to move this 
project forward.  In addition to the core working group 
participants, others working the housing issue might include 
Fannie Mae/Freddie Mac, OPIC and TDA on the U.S. side and the 
Ministry of Works and Housing on the Nigerian side. 
 
 
---------------- 
Bilateral Trade 
---------------- 
 
 
¶10. The Committee might establish a working group to 
encourage the export of specific goods under AGOA, such as 
footwear or leather.  To support this objective, the Embassy 
has $750,000 in ESF committed to conduct AGOA-related 
feasibility studies.  These feasibility studies will support 
investment in industries that benefit from AGOA and could 
lead to the development of products for export.  Core working 
group participants would include State, USAID, Commerce and 
USTR on the U.S. side and the Office of the CEA, Office of 
the Vice President, Ministry of Commerce and Export Promotion 
Council on the Nigerian side.  Sectoral manufacturing 
associations would be included in the working group on an 
issue-specific basis. 
 
 
--------------------------- 
Agriculture Infrastructure 
--------------------------- 
 
 
¶11. This committee would deal with non-trade, agriculture 
issues.  To develop the agriculture sector, Nigeria must 
improve its agriculture infrastructure, such as feeder rural 
roads, increase capacity and productivity, pursue 
opportunities in biotechnology, and explore commodity trading 
and price stabilization methods.  Core working group 
participants would include State, USAID and USDA on the U.S. 
side with the Office of the CEA, Office of the Vice President 
and Ministry of Agriculture on the Nigerian side.  The 
Ministry of Science and Technology would be included in 
discussions regarding biotechnology.  Additional working 
sub-groups may be included to address financial issues 
related to commodity trading and price stabilization 
 
 
------- 
Energy 
------- 
 
 
¶12. Energy comprises the largest commercial component of the 
U.S.-Nigeria relationship.  This working group would address 
bilateral energy issues as they arise.  Specific topics might 
include Nigeria's oil exports to the U.S., deregulation and 
privatization of the power industry, opportunities for U.S. 
investment in power production and oil refining, and problems 
U.S. energy companies may be experiencing in Nigeria.  Core 
working group members would include State, USAID, and 
Department of Energy on the U.S. side with the Office of the 
CEA, the Office of the President, the Ministry of Power and 
Steel and Nigerian National Petroleum Corporation (NNPC) on 
the Nigerian side.  Additional working group participants 
would be invited on an as needed basis. 
 
 
-------------------------------- 
Policy Reform and Implementation 
-------------------------------- 
 
 
¶13. This working group would deal primarily with policy 
issues that arise from the other four working groups.  For 
example, if the Investment Working Group decided that a 
specific customs regulation governing the importation of 
cotton or yarn was prohibiting foreign investment, not just 
for this project but more generally in the textile sector, 
the Policy Reform Working Group would be informed and tasked 
with pushing that particular regulatory change through the 
national bureaucracy.  It would also look at economic policy 
problems generated by the Lead Committee and private sector 
that cannot be properly addressed by other working groups. 
The participants will coordinate and implement policy reforms 
needed to achieve the specific objectives identified by the 
Economic Committee.  Core working group members would include 
State and USAID on the U.S. side and the Office of the CEA 
and Office of the Vice President on the Nigerian side. 
 
 
¶14.  Action requested: Post requests the Department's 
approval of this amended concept for the U.S.-Nigerian 
Economic Committee.  Once we have received Washington's 
approval, we will forward the working paper to the GON. 
Simultaneously, we will engage in a conversation with the GON 
and Washington that, as the process unfolds, will determine 
the specific agenda for the Lead Committee meeting as well as 
the specific role the USG agencies and the U.S. private 
sector, including the CCA, will have at the Lead Committee 
meeting and beyond. 
Jeter