VZCZCXRO8291
PP RUEHMA RUEHPA
DE RUEHUJA #0521/01 0781541
ZNR UUUUU ZZH
P 181541Z MAR 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 2373
INFO RUEHOS/AMCONSUL LAGOS PRIORITY 8942
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 03 ABUJA 000521 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR AF/W, EB/TPP, DRL AND AF/EPS (POTASH) 
DEPARTMENT PASS TO USTR (AGAMA) 
 
E.O. 12598: N/A 
TAGS: ETRD AGOA ECON NI
SUBJECT: NIGERIA Q 2008 PRESIDENT'S REPORT ON AGOA 
 
REF:  STATE 20082 
 
¶1.  In response to reftel, this cable contains Nigeria's submission 
for the 2008 President's Report on AGOA. 
. 
Market Economy/Economic Reform/Elimination of Trade Barriers 
--------------------------------------------- -- 
. 
¶2.  A new government headed by Umaru Musa Yar'Adua was sworn in on 
May 29, 2007 with the goal of implementing market based reforms, 
however, progress has been slow.  Nigeria continues to implement the 
Economic Community of West African States (ECOWAS) Common External 
Tariff (CET); however, negotiations remain stalled over the contents 
of the fifth, or excepted, band of CET goods, despite a planned 
completion date of January 1, 2008.  Negotiations on Type B 
exceptions and the 50 percent duty band for luxury items are ongoing 
and Nigeria plans to further reduce the 50 percent duty on luxury 
goods.  The United States continues to have serious concerns about 
the Nigerian governmentQs use of non-tariff barriers to trade.  A 
potential sign of progress is the new government's promise to review 
the existing import bans.  The governmentQs lack of capacity to 
address IPR issues is a major constraint to enforcement.   The 
National Assembly is considering a bill that would amend several 
laws covering trademarks, patents and designs, plant and animal 
varieties, and establish an industrial property commission. 
. 
Political Pluralism/Rule of Law/Anti-Corruption 
--------------------------------------------- -- 
. 
¶3.  The general elections held in April 2007 were seriously flawed, 
with credible reports of malfeasance and vote rigging across the 
country.  Despite this, however, the May 29, 2007 inauguration 
marked the first civilian-to-civilian transfer of power in Nigeria's 
history.  The legitimacy of the new administration remains in 
question and the two leading opposition candidates have petitioned 
the electoral tribunal to nullify the election.  The tribunal upheld 
the election results; however, the petitioners have appealed to the 
Supreme Court.  Despite the formation of an electoral reform 
committee, there has been little to no substantive progress toward 
electoral reform by the new administration.  Civil and criminal 
cases move slowly through NigeriaQs courts.  The judicial system 
lacks the resources to function effectively.  In response to public 
demand, ShariQa (Islamic law) was established in 12 of NigeriaQs 
northern states in 2000.  The government has taken steps to tackle 
corruption, such as establishing two anti-corruption commissions and 
announcing measures to improve fiscal responsibility in federal 
budgeting and procurement; however, the corruption remains endemic. 
Corruption cases involving senior government officials and state 
governors are pending before various courts.  In July 2006, Nigeria 
was removed from the Financial Action Task Force list of 
Non-Cooperative Countries and Territories, and in June 2007 the 
Nigerian Financial Intelligence Unit (NFIU) was admitted into the 
Egmont Group of Financial Intelligence Units.  This also led to 
delisting Nigeria from the FINCEN advisory list. 
. 
Poverty Reduction 
----------------- 
. 
¶4.  The governmentQs economic reform program, the National Economic 
Empowerment and Development Strategy (NEEDS) is undergoing a review 
that would incorporate President Yar'Adua's seven point agenda. 
Though Nigeria no longer has a Policy Support Instrument (PSI) with 
the IMF, it however, maintains a cordial relationship with the IMF 
which allows for evaluation of economic policies and provision of 
advisory services.  Recent comments by the IMF team in early 
February 2008 noted concerns about the use of Nigeria's excess crude 
account. 
. 
Labor/Child Labor 
----------------- 
. 
¶5.  The constitution recognizes the right of workers to join or form 
trade unions; however, less than ten percent of the total workforce 
is organized, and workers in Export Processing Zones may not join a 
union until ten years after the anniversary date of the enterprise 
establishment.  Minimum wages, the length of the workday or 
workweek, and general health and safety provisions are statutorily 
mandated, but enforcement remains weak. 
 
¶6.  Nigeria has ratified all eight core ILO conventions.  Nigerian 
law forbids forced or bonded labor and restricts the employment of 
children younger than 15 to home-based agricultural or domestic work 
for no more than eight hours per day; nonetheless, child labor 
remains a problem.  The ILO is working with the government and civil 
society as part of the ILOQs International Program on the 
Elimination of Child Labor.  The government launched awareness and 
training programs for law enforcement, customs and other officials 
 
ABUJA 00000521  002 OF 003 
 
 
and has provided additional training in child labor issues for labor 
inspection officers.  Nigeria is participating in the West African 
Cocoa Agriculture Project to eliminate the worst forms of child 
labor.  Private and government initiatives to stem the incidence of 
child employment continued but were largely ineffective. 
Investigations of child trafficking are hampered by official 
corruption.  Reports of human rights problems included:  security 
force use of excessive force and involvement in unlawful killings, 
including some that were alleged to be politically-motivated; and 
mistreatment of prisoners and detainees. 
. 
Nigeria: Competitiveness Hubs and Regional USAID Mission 
--------------------------------------------- -------- 
. 
¶7.  The two Competitiveness Hubs in West Africa Q in Accra, Ghana 
and Dakar, Senegal Q work in conjunction with each and are funded 
through and managed by the USAID West Africa Mission (USAID/WA). 
The Accra and Dakar Hubs have assisted firms in 21 West and Central 
African countries, including Nigeria, to exhibit at international 
trade shows, providing firm-specific training on strategies to 
access the U.S. and other international markets, including 
information related to quality certifications, packaging, pricing, 
marketing, and financial management.  From October 2005 through 
September 2007, the West Africa Hubs facilitated over $600,000 in 
exports from Nigeria, facilitated nearly $200,000 in new 
investments, and provided hands-on technical assistance to nearly 80 
Nigerian companies.  Specialized training was provided to nearly 
1,000 Nigerians, over 50% of which were women. 
 
¶8.  In nearly every West African country eligible under AGOA, the 
Hubs have established partnerships with local organizations (such as 
chambers of commerce) to operate AGOA Resource Centers (ARCs), which 
serve as information centers for a wide array of information on 
AGOA.  The ARC in Nigeria is housed in the Nigerian-American Chamber 
of Commerce in Lagos, while the Hub also works extensively with the 
Nigerian Export Promotion Council to hold sector-specific workshops 
(including an export packaging seminar in Lagos in late 2006) as 
well as AGOA-specific events.  The Hub organized an AGOA Export 
Strategy Workshop for Nigerian entrepreneurs in December 2007 in 
conjunction with the U.S.-Nigeria Trade and Investment Framework 
Agreement (TIFA) Meetings.  The Hub responded to requests from the 
Nigerian government in November 2006 to train customs and other 
officials on procedures to comply with AGOA textile visa and 
certification requirements. 
 
¶9.  Sector focuses for the Hubs include cashews, shea butter, 
apparel, handicrafts, specialty foods and seafood.  The Hub acts as 
the Secretariat for the African Cashew Alliance (ACA), which aims to 
strengthen the African cashew value chain and increase processing 
capacity in West Africa to achieve competitive, value-added (rather 
than raw nut) cashew exports from the region.  Nigeria is a crucial 
participant in the ACA with its relatively high processing capacity; 
international commodity company and founding member of the ACA - 
Olam opening a second major processing facility in Nigeria in 2007. 
The Hub organized an ACA meeting in Ibadan in January and in Abuja 
in July 2007.  Early successes include connecting Nigerian 
processors with suppliers in Burkina Faso and Benin, as well as 
direct Nigerian exports of 30 metric tons of cashews to the United 
States.  Nigeria also holds potential in the shea butter sector, and 
the Hubs are encouraging production and processing methods that 
ensure higher quality shea butter for export.  One Trade Hub client 
exports bulk shea butter to Europe. 
. 
ECOWAS 
------- 
. 
¶10.  USAID/WA and the Hubs also work with ECOWAS in Abuja to address 
some of the key costs of doing business, which have a direct impact 
on competitiveness, including irregular and costly supplies of 
electricity and high telecommunications charges, mostly arising 
because of a poor investment environment in the subregion.  USAIDQs 
involvement in regional energy sector in 2007 included ongoing 
technical assistance support for the West Africa Power Pool, 
building on the West African Gas Pipeline project that will deliver 
natural gas from Nigeria to Benin, Togo and Ghana.  The Power Pool 
aims to integrate and strengthen energy infrastructure and 
regulation among ECOWAS member states for lower cost and more 
reliable power.  USAID also funded advisors to support the Common 
External Tariff, a long-standing ECOWAS initiative meant to enhance 
regional integration and export competitiveness. 
 
¶11.  A related initiative saw the Trade Hub conduct an audit of 
Nigerian Customs Service hardware, software, institutional setup and 
data collection methods in preparation for establishing a Regional 
Trade Information Systems Database across Nigeria, Benin, Togo, 
Ghana and Cote dQIvoire.  The Hub also completed an SPS capacity 
evaluation in Nigeria, a part of their broader efforts to harmonize 
 
ABUJA 00000521  003 OF 003 
 
 
the West African Economic and Monetary Union (UEMOA) countries 
Sanitary and Phytosanitary (SPS) regulations with non-UEMOA 
countries (such as Nigeria) in order to increase the likelihood of 
agricultural exports within and from ECOWAS countries elsewhere. 
 
SANDERS