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RUEATRS/DEPT OF TREASURY WASHDC
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RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK

UNCLAS SECTION 01 OF 05 ABUJA 000313 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR AF/W, INR/AA 
ENERGY FOR CGAY AND GPERSON 
 
E.O. 12958: N/A 
TAGS: PGOV EPET PHUM EFIN ETRD KCOR KDEM ELAB MOPS
NI 
SUBJECT: NIGERIA: POL/ECON UPDATES FOR FEBRUARY 1-14, 2008 
 
REF: 07 LAGOS 749 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION. 
 
¶1. (U) Following is a joint Embassy Abuja-ConGen Lagos 
compilation of February 1-14, 2008 political/economic 
highlights, which did not feature in our other reporting, 
covering: 
-- Elections: Tribunals, Reforms, Party Politics 
-- Corruption 
-- Niger Delta 
-- Military Affairs 
-- National Assembly 
-- Human Rights, Labor, TIP 
-- Economic News 
-- Oil and Gas 
 
--------------------------------------------- 
ELECTIONS: TRIBUNALS, REFORMS, PARTY POLITICS 
--------------------------------------------- 
¶2. (U) The Benue State Election Tribunal heard closing 
arguments February 10 in the petition against Senate 
President David Mark (PDP) by Usman Abubakar (All Nigeria 
People,s Party, ANPP).  The court will announce the verdict 
date via hearing notice posted outside chambers.  Lawyers 
expect a final judgment in the case by the end of February, 
at the earliest.  Also in the same court session, the 
Tribunal struck out Mark,s application alleging Abubakar had 
"tampered" with evidence already remitted to court. 
 
¶3. (SBU) In the lead up to the March 8 PDP national 
convention, the PDP will hold several congresses to elect 
party officials at the ward (February 21), local government 
(February 25), state (February 28), and zonal (March 4) 
levels.  On February 6, the PDP caucus in the House of 
Representatives, led by National Assembly member Farouk 
Lawan, alleged PDP Chair Ahmadu Ali and the National 
Executive Committee of the party were employing 
"undemocratic" means and making decisions, including the 
lists of congress and convention committee members, without 
consultation with other party members. (Comment:  A PDP 
activist told PolOff February 14 that he expects the PDP 
convention date to again be postponed due to ongoing 
controversy over the set-up of the convention committee, 
which allegedly has not followed the party's internal rules. 
The convention committee is important because it will set the 
playing field - level or not - for election of the new party 
chairman and other top officeholders.  End Comment.) 
 
¶4. (U) Several outstanding ambassadorial postings are set to 
be announced, according to press reports February 4.  Retired 
Brigadier-General Oluwole Rotimi, former military governor of 
Western Province (all of what is now called the Southwest 
Zone) under Gowon, is expected to be announced as Ambassador 
to the U.S.; PDP Chair Ahmadu Ali, originally slated for the 
U.K., is expected to be confirmed as High Commissioner to 
South Africa. Also, physician Dalhatu Tafida may be announced 
High Commissioner to the U.K.; former Foreign Minister Joy 
Ogwu, who has advised the United Nations on disarmament 
issues and advocated closer Africa-Latin America relations, 
may be Ambassador to the UN; and former deputy governor of 
Katsina state, under President Yar,Adua, Garba Aminichi, may 
be announced Ambassador to Saudi Arabia. 
 
¶5. (U) Nigerian press report February 1 former president 
Obasanjo "packed important documents relating to his tenure" 
and carted them away when he vacated office in 2007. 
Documents, including the Independent National Electoral 
Commission (INEC) registration certificate issued to the PDP 
are alleged to have gone missing. 
 
¶6. (SBU) A traditional local ruler told PolOffs a by-election 
in Oyo State to replace assassinated House Representative 
Olusegun Oladimeji showed the continued electoral problems 
faced by the country.  Voter intimidation and violence kept 
many people away from the polls. 
 
ABUJA 00000313  002 OF 005 
 
 
 
¶7. (SBU) On January 29, the Supreme Court dismissed a suit 
filed by former Governor of Anambra State Andy Uba, asking 
the court to reverse its judgment that upheld a lower courts 
annulment of his election.  The Court described the appeal as 
a "waste of time" and a "mockery of the judiciary."  A 
journalist in Anambra's capital Awka, told PolSpec the 
Supreme Court judgment was warmly received by the public, and 
said several groups had visited Governor Peter Obi to 
congratulate him on the ruling.  Neither Uba nor any 
opposition group has criticized the ruling and there were no 
violent protests. 
 
---------- 
CORRUPTION 
---------- 
¶8. (U) Former Delta governor James Ibori (PDP, 1999-2007), 
currently under investigation from the EFCC for allegedly 
stealing more than $80 million in public funds, was granted 
bail by a Kaduna High Court February 11.  Ibori posted bail 
at $40,000, and was ordered to remain in Kaduna and surrender 
his tourist and diplomatic passports.  His trial is scheduled 
to begin February 18. 
 
¶9. (U) On February 11, an Enugu High Court granted bail to 
former Edo governor Lucky Igbinedion (PDP, 1999-2007), who is 
accused of 147 counts of corruption and money laundering, 
including allegations that he misappropriated $200 million 
from state coffers while in office.  The court placed several 
conditions on Igbinedion,s bail, including ordering him to 
deposit his passport with the EFCC, restricting any 
international travel for himself and his two sureties (who 
must currently be federal permanent secretaries), and 
mandatory biweekly reporting to the EFCC.  As of February 14, 
Igbinedion remained in EFCC custody in Enugu because he could 
not produce the requisite two sureties.  Igbinedion,s trial 
is set to commence February 25. 
 
----------- 
NIGER DELTA 
----------- 
¶10. (SBU) On February 1 a naval patrol team intercepted 
militants around the Cawthorne Channel, Rivers State.  The 
militants were reportedly repulsed following a brief 
gunfight, according to security sources.  No navy casualties 
were reported.  The naval team captured one boat with an 
engine and three AK47s; the boat and rifles are now in 
government custody. 
 
¶11. (SBU) Men dressed in military uniforms in three boats 
attacked a mobile police team attached to Shell operations at 
Cawthorne Channel, Rivers State on February 4, said security 
sources.  The mobile police were apparently coming from Port 
Harcourt for a crew change when they were attacked; one 
policeman was reported dead, two injured. 
 
¶12. (U) Rivers State Governor Rotimi Amaechi (PDP) presented 
the Fiscal Responsibility Bill to the Rivers State Assembly. 
The proposed law would clamp down on nepotism and favoritism 
in the awarding of contracts by stripping the Governor's 
office of its discretionary powers to award contracts.  The 
Governor also proposed a bill that would compel the state to 
save 1 billion naira ($8.5 million) monthly to protect state 
finances from fluctuating oil prices. 
 
----------------- 
NATIONAL ASSEMBLY 
----------------- 
¶13. (U)  On February 12, the National Assembly passed the 
2008 Appropriation Bill; however the Senate and House of 
Representatives each presented different figures.  The Senate 
passed a budget in the amount of $24 billion (2.898 trillion 
naira), while the House passed a $25 billion (2.945 trillion 
naira) budget; both of which were higher than the $20 billion 
(2.4 trillion naira) proposed by President Yar'Adua.  In 
anticipation of these differences, the two chambers 
constituted a Conference Committee comprised of key members 
 
ABUJA 00000313  003 OF 005 
 
 
from both the House and Senate to harmonize the disparity 
before the bill is presented to the President.  Newspaper 
reports February 14 indicated that President Yar'Adua was 
considering a veto of the Appropriation Bill out of concern 
that the Assembly is on a "spending spree" which could cause 
inflation. 
 
¶14. (U) The National Assembly's Joint Committee on 
Appropriation, Finance, Aid, Loans and Debt Management on 
February 13 approved President Yar'Adua's debt write-off 
proposal for Liberia.  The debt relief is part of a broader 
initiative by the international community to clear Liberian 
debt.  The bill now passes to the full House of 
Representatives for approval. 
 
--------------- 
MILITARY AFFAIRS 
--------------- 
¶15. (SBU) The fallout of the theft of arms from the Kaduna 
armory has begun.  As a court martial sits this week to try 
the officers allegedly involved in the sales of hundreds and 
possibly thousands of small arms to Niger Delta militants, 
the Army Council has demanded the resignation of an 
unidentified Major General for his shoddy initial 
investigation of the affair. 
 
¶16. (U) The GON announced the review and likely cancellation 
of hundreds of millions of dollars worth of defense projects, 
some of which have been in the pipeline for years. 
Reportedly included in the review are a $250 million purchase 
of F-7 fighter jets from China and the renovation of the 
Naval Ordnance Depot. 
 
---------------------- 
HUMAN RIGHTS, LABOR, TIP 
---------------------- 
¶17. (U) On February 14, the Judiciary Staff Union of Nigeria 
(JUSUN) called off its 10-day nation-wide strike following a 
meeting between Labor Minister Hassan Lawal and former 
Nigerian Labor Congress president Adams Oshiomhole. 
Negotiations between the government and JUSUN will commence 
February 19.  On February 11, Supreme Court staff had joined 
their colleagues in protest, resulting in a February 12 
statement by the GON threatening to fire any staff that 
joined the strike.  (Note: The JUSUN had been protesting the 
non-implementation of a recommended pay raise and demanding a 
uniform salary structure for all judicial staff nation-wide. 
According to JUSUN President, a 2006 Presidential Commission 
on the Reform of Justice Sectors recommended a pay raise for 
judicial workers, members of the Nigerian Police Force, and 
the Nigeria Prison Service; but judicial workers are the only 
ones who have not received the increase to date.  On the 
contrary, Supreme Court Chief Registrar Usman Musale declared 
the workers demands unrealistic and stated that only an 
amendment to the 1999 Constitution would enable the 
implementation of a uniform salary structure.  The National 
Judicial Council is only responsible for paying salaries of 
judges and Chief Registrars, while all support staff salaries 
are to be paid the individual State Judicial Service 
Commissions, ultimately making the state Governors 
responsible for the dispersal of funds and salaries.  End 
Note.) 
 
¶18. (U) On February 9, police intercepted a suspected human 
trafficker in the Birni Gwari area of Kaduna State with 24 
female children aged 10-13 years allegedly being trafficked 
from Tsaragi in Kwara State to Kano.  According to Kaduna 
State Commissioner of Police, Haz Iwendi, the suspect 
confessed to transporting the children, but said he had 
permission from the parents to take the children for domestic 
service.  The suspect also said that he previously took his 
eight sisters to Kano to work as maids and that they made 
good money, prompting the others to want to go as well. 
 
¶19. (U) On February 7, 105 teenagers were rescued from human 
traffickers.  Police spokesperson of the Federal Capital 
Territory (FCT) command, Superintendent Ahmed Musa, said the 
 
ABUJA 00000313  004 OF 005 
 
 
children were trafficked from Nassarawa, Lagos, Kano, Kwara, 
and some villages within the FCT to be used for sexual 
exploitation and forced labor.  According to Musa, 22 
suspects arrested are currently at Suleja prison awaiting 
their arraignment before an Abuja High Court. 
 
------------- 
ECONOMIC NEWS 
------------- 
¶20. (U) The Governor of the Central Bank of Nigeria (CBN), 
Chukwuma Soludo, is considering having United Bank of Africa 
(UBA), subsidiary of UBA Capital (Europe), manage Nigeria's 
large and rising foreign exchange reserves, more than $54 
billion. If this happens it would mean a major shift in 
policy by the CBN, which had in the past insisted that local 
banks interested in participating in the management of the 
country's lucrative foreign liquid assets join forces with 
reputable international financial institutions to be able to 
do so. This policy shift is still in the early stage and 
decision would require approval of the CBN board. 
 
¶21. (U) Lagos State inaugurated a new litigation system 
designed to fast track resolution of commercial disputes. 
The system is designed to resolve disputes in eight months 
from the date the case is filed.  A suit will qualify for the 
fast track system if the claim is for 100 million naira 
($850,000) or more, if one or more of the parties is a 
non-resident investor, if the suit involves a mortgage, or if 
the claimant request the fast track process. 
 
¶22. (SBU) PolOff met with Oge Egede, an official with the 
Kick Against Indiscipline (KAI) brigade.  KAI is an 
environmental enforcement agency established in 2003 by Lagos 
state government.  Members of the brigade, who wear 
distinctive green uniforms, are charged with enforcing 
environmental laws, eliminating illegal street trading, 
regulating private waste disposal companies and stopping 
indiscriminate littering.  He described the work as sorely 
needed to counteract the degradation of public space in 
Lagos.  According to Egede, violators are taken to mobile 
courts located at the police stations for summary payment. 
He regretted that the public misunderstands the work his 
brigade undertakes, and blames this on poor media outreach. 
Several weeks before this meeting, a post officer watched as 
a dozen KAI "officers" armed with batons descended from their 
bright green truck and attacked a plant seller's stand, 
tearing down signs and knocking over merchandise before 
leaving.  Although his was one of many roadside stalls in the 
vicinity, the plant vendor was the only target of the KAI 
team.  He remains in business in the same location. 
 
¶23. (U) Magnus Kpakol, National Coordinator for the GON's 
National Poverty Eradication Programme (NAPEP), said the 
involvement of traditional rulers in Ogun State has helped 
link cassava processors to target markets, significantly 
lowering the poverty rate in rural areas of the state.  NAPEP 
is promoting its new Village Economic Development Solutions 
Scheme (VEDSS) to develop rural economies.  According to 
Kpakol, VEDSS proposes that every village have at least one 
anchor economic activity, likely agro-based.  Villages are 
expected to have a trust fund that can be used for communal 
and infrastructure development. 
------------ 
OIL AND GAS 
------------ 
¶24.  (U) The Warri refinery returned to operation in early 
February.  Warri has a nameplate capacity of 125,000 barrels 
per day, but is expected to initially run at 60 percent 
capacity.  The return of Warri is welcome news for Nigeria, 
but the country will remain dependent on imported refined 
products.  The Kaduna refinery will remain off-line for 
maintenance until August 2008. 
 
¶25. (U) Flights across the country were canceled on February 
7 due to a nationwide shortage of jet fuel.  Nigeria imports 
all its jet fuel, but the immediate cause of the shortage was 
unclear.  Some reports indicate that fuel distributed by 
 
ABUJA 00000313  005 OF 005 
 
 
African Petroleum was out of specification and could not be 
used by airlines. 
 
¶26. (U) According to government figures the GON spent $3.8 
billion in fuel subsidies in 2007.  According to a local 
business daily, the GON is already discussing with labor 
unions a gasoline price increase in June 2008.  Publicly at 
least, the Nigerian Labor Congress has come out against any 
such move.  Labor-union led strikes in June 2007 forced the 
GON to reduce a planned price hike. 
 
¶27. (SBU) President Yar'Adua announced a new natural gas 
pricing policy that favors gas for electricity production and 
heavy domestic industries over gas destined for export. 
International oil companies complain that the new policy is 
based on wildly optimistic domestic demand assumptions and 
unrealistically low gas production costs.  They claim it will 
hinder the overall development of Nigeria's largely untapped 
gas reserves and sets theoretical domestic demand against 
actual export projects already in the works.  There was no 
announced date for the policy's implementation although 
controlling legislation will likely be required. 
 
¶28. (SBU) Shell Petroleum Development Corporation's (SPDC's) 
proposed restructuring continues to generate controversy 
(reftel).  The company's managing director testified about 
proposed layoffs at a public hearing of the House Committee 
on Upstream Petroleum on February 11th.  Committee 
representatives accused Shell of favoring expatriates over 
Nigerians.  On February 12th, Nigerian National Petroleum 
Corporation (NNPC) ordered Shell to halt the restructuring. 
SPDC is a joint venture company with the GON holding 55 
percent of the company through a subsidiary of NNPC.  Shell 
has announced that, as part of its "One Shell" concept, it 
would layoff between three and six thousand employees and 
combine parts of SPDC and Shell Nigeria Exploration and 
Production Company (SNEPCO), its offshore arm.  Company 
contacts report Shell has already eliminated one layer of 
senior management, with Shell's Vice President Ann Pickard 
taking a more active role in operations. 
 
¶29. (SBU) Press accounts say that President Yar'Adua 
discussed the restructuring with Royal Dutch Shell's CEO 
during the World Economic Forum in Davos.  The GON is likely 
concerned not only with employment, but also with the impact 
combining SPDC and SNEPCO will have on Nigeria's joint 
venture operations.  Shell may use the restructuring as a 
bargaining tool to win concessions from the GON on joint 
venture arrears, disputed oil blocks, and gas flaring 
deadlines.  SPDC is widely regarded as bloated and 
inefficient by local industry executives and one company 
contact reports that SPDC is losing money for Shell.  A local 
Chevron Vice President told Ambassador February 18 that Shell 
is working on managing its restructuring and problems with 
the GON by seeking a loan in the amount of $1 billion that 
will be used to offset some of the problems caused by the 
proposed restructuring. 
SANDERS