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RHEHNSC/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 06 ABUJA 000536 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/W, INR/AA 
STATE PASS TO USTR-AGAMA 
DOE FOR GPERSON 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON EPET ETRD KIRF NI
SUBJECT: NIGERIA: BIWEEKLY POL/ECON UPDATES MARCH 1-16, 2008 
 
REF: A. 07ABUJA 1593 
     ¶B. ABUJA 0106 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION. 
 
¶1. (U) Following is a joint Embassy Abuja-ConGen Lagos 
compilation of March 1-16, 2008 political/economic 
highlights, which did not feature in our other reporting, 
covering: 
-- Elections: Tribunals, Reforms, Party Politics 
-- Corruption 
-- Niger Delta 
-- National Assembly 
-- Human Rights, Migration, Religious Freedom 
-- Economic News 
-- ECOWAS 
-- Oil and Gas 
 
--------------------------------------------- 
ELECTIONS: TRIBUNALS, REFORMS, PARTY POLITICS 
--------------------------------------------- 
¶2. (U) Both Muhammadu Buhari (All Nigeria People's Party, 
ANPP) and Atiku Abubakar (Action Congress, AC) have asked the 
Supreme Court to overturn the Presidential Election 
Tribunal's February 26 decision to uphold the April 2007 
presidential election.  Buhari filed his appeal February 29, 
while Atiku filed his appeal March 14.  A Supreme Court 
ruling on the presidential election challenge is expected as 
early as April 2008. 
 
¶3. (SBU) On March 11, the Senate confirmed the appointment of 
Court of Appeals Justices James Ogebe and Saifullahi 
Coomassie to the Supreme Court.  Justice Ogebe presided over 
the Presidential Election Tribunal, which ruled February 26 
to uphold President Yar'Adua's April 2007 election, and 
Coomassie delivered the controversial February 19 ruling that 
may pave the way for Obasanjo-loyalist Andy Uba to take up 
the position of Anambra governor when current governor Peter 
Obi's (All Progressive Grand Alliance) tenure expires in 
¶2010. 
 
¶4. (U) KANO:  The Kano State Election Tribunal ruled March 11 
to uphold second-term governor Ibrahim Shekarau's (ANPP) 
election, declaring petitioner Ahmed Bichi (People's 
Democratic Party, PDP) failed to prove that any 
"non-compliance" with the Electoral Act "substantially 
affected" the outcome of the elections.  Bichi will appeal 
the Tribunal's ruling.  (Note: Bichi is currently serving as 
Minister of State for Commerce and Tourism.) 
 
¶5. (U) IMO: On March 6 the Imo State Election Tribunal upheld 
the election of Governor Ideki Ohakim of the People's 
Progressive Alliance (PPA).  The tribunal dismissed the 
principal contender, Ifeanyi Araraume (PDP), who they said 
had failed to prove beyond a reasonable doubt that he won the 
number of votes required in the 27 local government areas of 
the state.  Araume will file an appeal. 
 
¶6. (U) ABIA: The Abia State Election Tribunal nullified the 
election of Governor Theodore Orji (PPA) February 25 and 
declared that Onyema Ugochukwu (PDP) should be sworn in as 
governor.  Orji is contesting the decision, and a ruling by 
the Appeals Court is expected within two months.  According 
to the tribunal ruling, Orji, who was the Chief of Staff to 
the previous governor, did not meet the legal requirement to 
run for office, because a candidate may not hold any 
government position 30 days prior to filing as a candidate. 
PDP lawyers provided evidence that Orji was still living in 
government quarters and earning a government salary at the 
time the elections were being held.  The appeal process will 
delay widely anticipated Economic and Financial Crimes 
Commission (EFCC) corruption charges against Orji. (Note: 
Orji had actually been in the EFCC's custody when the 
election was held; he was released on bail and the case 
suspended upon his election and subsequent swearing in.  As 
 
ABUJA 00000536  002 OF 006 
 
 
governor, he would be immune from prosecution; as an average 
citizen, he could be on his way back into court.  End Note.) 
 
¶7. (SBU) The PDP held its annual national convention March 8. 
 Most people in attendance largely ignored the speeches by 
outgoing members of the party secretariat, as well as the 
fact that the fifty or so ballot boxes dutifully provided by 
the Independent National Electoral Commission (which, 
ironically, also sent a formal election monitoring team), 
remained unused.  Despite the hopes of many to the contrary, 
it was business as usual in the PDP. 
 
---------- 
CORRUPTION 
---------- 
¶8. (U) A Federal High Court in Rivers state granted an 
injunction March 5 against the investigation, arrest, or 
prosecution of former Rivers governor Peter Odili (PDP).  The 
Economic and Financial Crimes Commission (EFCC) claimed the 
court had no legal authority to bar it from investigating the 
governor for corruption charges.  The EFCC will appeal the 
ruling. 
 
¶9. (U) On March 13 former Jigawa governor Ibrahim Turaki 
(ANPP) filed an application at the Abuja Federal High Court 
to strike out the charges of corruption and money laundering 
brought against him by the EFCC.  He argued that a Kano 
Federal High Court had earlier granted a "perpetual 
injunction" barring the EFCC or any government agency from 
arresting or prosecuting Turaki. 
 
¶10. (U) The EFCC is planning to prosecute directors of the 
Nigerian Ports Authority (NPA) over allegations of irregular 
award of contracts valued at over 100 billion naira ($855 
million).  More than 24 thousand contracts have allegedly 
been awarded without due process. 
 
¶11. (U) Former Delta State Governor James Ibori attempted to 
have his trial for money laundering and other counts (brought 
by the EFCC) assigned to a different judge, according to 
press reports.  Ibori claimed the Federal High Court in 
Kaduna was biased against him. However, the court disagreed, 
stating money laundering, economic, and financial crimes are 
exclusively within the Federal High Court's jurisdiction. 
 
----------- 
NIGER DELTA 
----------- 
¶12. (U) According to press reports, gunmen in Rivers State on 
March 4 kidnapped a German employee of Julius Berger, a 
prominent German construction company in Nigeria, and killed 
a military Joint Task Force (JTF) soldier from Operation 
Restore Hope attached to him.  The kidnapped German was 
reportedly working on the West-East road project awarded by 
the Federal Government to develop infrastructure in the Niger 
Delta.  Two children of a former Etche Local Council chairman 
were also kidnapped on March 4.  The children's mother paid 
approximately $13,000 but the kidnappers reportedly demanded 
an additional $342,000.  The daughter of a shipping magnate 
was reportedly kidnapped on her way to school in Port 
Harcourt on March 10, according to press reports. 
 
¶13. (U) Following these kidnappings, the Rivers State 
government publicly stated it would no longer abide these 
attacks and would "track down suspected killers with a view 
to prosecuting them."  Rivers State Governor Amaechi 
reportedly said his government had adopted a "proactive 
policy" which would arrest and prosecute anyone directly or 
indirectly linked to kidnapping. 
 
¶14. (U) March 11 press reports claim Governor Amaechi and 
Senate President David Mark visited one of criminal/militant 
leader Ateke Tom's camps which the Nigerian military's 
"Operation Flush Out III" had uncovered.  In addition to 
finding rifles and ammunition, an underground pipeline 
running to a "private jetty where petroleum products are sold 
 
ABUJA 00000536  003 OF 006 
 
 
illegally" was reportedly found under one of Ateke Tom's 
uncompleted buildings. 
 
----------------- 
NATIONAL ASSEMBLY 
----------------- 
¶15. (U) March 12 the National Assembly (NASS) amended the 
2008 budget at 2.748 trillion naira ($23.5 billion), which 
was $2.6 billion more than asked for by President Yar'Adua, 
but $1.3 billion less than the amount initially sent to 
Yar'Adua by the NASS on February 20.  The adjusted budget was 
produced by a 14 person joint committee led by Deputy Senate 
President Ike Ekweremadu and Deputy Speaker of the House 
Usman Bayero Nafada.  The reductions came mainly from 
allocations in the areas of Defense, Army and Air Force, 
Transportation, the National Planning Commission, the Senate 
and House of Representatives, NASS General Services and 
Judgment Debts.  Lower capital expenditures were put forth 
for the ministries of Agriculture, Water Resources, the 
Federal Capital Territory, Health, Interior, the Science and 
Technology Commission, Code of Conduct Bureau, Police Service 
Commission, and the NASS.  The lower amount of expenditure 
cut the budget deficit from $5.5 billion to $1.1 billion. 
 
¶16. (U) The National Assembly is in recess until the week of 
April 7, at which time they hope to receive approval of the 
federal budget from the President. (Note:  March 20 press 
reports suggest that the President may again withhold assent 
and seek further cuts.  End note.)  Once the budget is 
approved, members of the House of Representatives will begin 
discussions on amendments to the Constitution. 
 
------------------------------------------ 
HUMAN RIGHTS, MIGRATION, RELIGIOUS FREEDOM 
------------------------------------------ 
¶17. (U) Press reported March 11 that the British government 
will soon train the first cadre of 308 police officers 
selected to participate in the newly-created Anti-Terrorism 
Squad.  Northern newspaper Daily Trust claimed "even though 
there was no support for America (to train Nigerians)," the 
GON "would soon ask for some help from foreign governments" 
to assist in fighting what the Inspector General of Police 
Mike Okiro termed "domestic terrorists."  Okiro explained 
that domestic terrorism is witnessed "daily through numerous 
acts of violent criminal acts, assassinations, and bank 
robberies." 
 
¶18. (U)  During the weekend of March 8, renewed communal 
violence (ref A) resulted in the loss of an undetermined 
number of lives in Mbaku, a village outside of Makurdi, Benue 
State.  Trouble apparently started when ethnic Fulani 
herdsman and their cattle were drinking and bathing in the 
water near a local dam. According to Police Commissioner 
Ibiyinka Kayode, this repository is the only clean source of 
drinking water in the area and villagers claimed the Fulani 
were contaminating it.  Village leader, Mbashir Zaki 
Aemberga, further attributed the violence to the continuous 
destruction of local crops by the Fulani cattle constantly 
grazing on farmlands.  Media reports claim seven people were 
killed, while Kayode argued that only one Fulani person died 
as a result of the violence. 
 
¶19. (U) On March 6, Assistant Controller of Prisons, Kayode 
Odeyemi, issued a statement that a total of 316 juveniles, 
aged 14-18, are currently in custody in 11 prisons throughout 
the country. Also in the statement, the Nigeria Prisons 
Service also denied previous reports (Ref B) that there were 
300 babies in the nation's prisons, stating that in fact 
there were only 19. Rivers, Delta, and Imo state had the 
highest population of juveniles according to the report. 
 
¶20. (SBU) An appeal has been made to the international 
community to assist with the resettlement of Nigerian 
citizens affected by the International Court of Justice 
judgement on the Bakassi penninsula.  Leader of the Nigeria 
delegation to the Nigeria-Cameroon Mixed Commission, Prince 
 
ABUJA 00000536  004 OF 006 
 
 
Bola Ajibola, who made the plea, did not however explain what 
happened to the one billion naira "Bakassi Resettlement Fund" 
to which many countries already contributed.  An alarm was 
raised last year by the Mixed Commission about the missing 
funds and the GON has yet to explain what happened.  Some 
sources allege that former governor of Cross River State 
Donald Duke "misappropriated" the resettlement money. 
 
¶21. (SBU) President Yar'Adua attended the 11th Heads of State 
Islamic Summit of the Organization of the Islamic Conference 
(OIC) in Dakar, Senegal on March 13. This is Nigeria's 
highest-profile engagement with the OIC since joining the 
organization in 1986.  Nigeria's membership in the OIC has 
been criticized by some parts of the Christian community as 
an attempt to "Islamize" the country.  Foreign Minister Ojo 
Maduekwe (a Christian) defended President Yar'Adua's 
attendance at the recent summit insisting that "there are 
benefits to be derived from Nigeria's OIC membership." 
 
------------- 
ECONOMIC NEWS 
------------- 
¶22. (U) Northern Nigeria has been ravaged by outbreaks of 
measles.  Recent reports from Kano, Katsina, Zaria, Gusau, 
and Dutse indicate that hundreds of children have died as a 
result of the disease.  Poor families in rural areas have 
been hardest hit.  50 children reportedly died in Ikara local 
government in Kaduna State, while another 150 children died 
in Zaria town.  Low immunization rates are to blame for the 
tragedy. 
 
¶23. (U) President Yar'Adua approved the establishment of the 
Ogun/Guangdong Free Trade Zone (FTZ) in Igbesa, Ogun State. 
The first phase of the project will cost $500 million.  With 
this formal approval, Ogun state now has tree FTZs (the 
others are Olokola FTZ in Ogun East and the Kajola 
Specialized Railway Terminus FTZ in Ogun Central). 
 
¶24. (U) Nigeria's external debt could rise by 118.2 percent 
to $7.2 billion in the next four years, according to 
"Nigeria's Economic and Financial Indicators 2004 to 2012" 
report by the International Monetary Fund (IMF).  External 
debt, which totaled $3.397 billion in September 2007, 
comprises multilateral debt ($2.852 billion) and non-Paris 
debt ($545 million).  The IMF has advised Nigeria to 
implement the debt management framework, particularly at 
state and council levels.  IMF expressed support for the 
government's decision to rely only on concessional external 
financing to prevent a re-accumulation of unsustainable debt. 
 
¶25. (U) The Minister of Agriculture and Water Resources, 
Sayyadi Abba Ruma, reported that the country's agriculture 
output had dropped drastically, but did not give figures for 
the shortfall.  Low production cuts across all agricultural 
sub-sectors including rice, maize, cassava, sugar, potatoes 
and vegetables. Yearly 15 million tons of wheat are required, 
but only 70 thousand tons are produced in Nigeria. 
 
¶26. (U) An American firm, IceCool Park Limited, has received 
financial backing from GT Bank and Diamond Bank for the 
implementation of the first phase of the IceCool 
Entertainment Park, estimated to cost $40 million.  The 
project will reportedly employ 1000 Nigerians and will 
generate more than 20 million naira ($172,414) for the Ogun 
State Government. 
 
¶27. (U) The American Business Council in Nigeria was formally 
launched in Lagos on March 6.  Its purpose is to promote 
development of commerce and investment between the U.S. and 
Nigeria.  The Council will support sustainable socio-economic 
reform initiatives in Nigeria, through public policy 
advocacy, promotion and implementation of projects.  It will 
promote the removal of trade barriers between Nigeria and the 
U.S. and work with the U.S. Chamber of Commerce to advocate 
the views of the American business community in Nigeria. 
 
 
ABUJA 00000536  005 OF 006 
 
 
¶28. (U) The Central Bank of Nigeria (CBN) has revealed that 
non-petroleum industries have boosted economic growth in the 
last quarter of 2007.  Growth increased 6.1 percent in the 
third quarter to 7.6 percent in the last quarter of 2007. 
This increase was due to manufacturing firms increasing their 
production during the holiday season and to the increased 
prices of cocoa, cotton, soybean and palm oil in the 
international market. 
 
¶29. (U) The World Bank has listed the Nigerian Stock Exchange 
(NSE) among the top 20 emerging markets, alongside Brazil, 
Russia, India and China.  This announcement is a confidence 
booster for the Nigerian economy which is critical for 
strengthening the Nigerian capital market and making it more 
competitive for both domestic and foreign investors. 
 
¶30. (U) The International Monetary Fund (IMF) forecasted 9 
percent economic growth rate for Nigeria, only second to 
China with 10 percent, while warning of the risk of high oil 
revenue spending and over-dependence on energy on the 
macroeconomic stability of the country. The IMF position 
buoyed hopes that the country will receive improved rating 
from the global sovereign rating agencies Standard and Poor 
and Fitch. 
 
¶31. (U) This month, President Yar'Adua demanded a review of 
existing international trade policies which were not 
beneficial to the West African sub-region.  He argued that 
although broadened participation in international trade 
offered important avenues for the growth of the sub-region, 
the volatile and complex pace of globalization had created 
uncertainty about the downside risks presented by the open 
economy.  In order to counter these concerns, he ordered the 
review of existing international trade policies. 
 
¶32. (U) The GON says that 12 million more housing units are 
needed to address the housing problem facing the country. 
The Minister of State for Environment, Housing, and Urban 
Development, Chica Odom, said that federal and state 
governments would collaborate to meet the housing needs of 
Nigerians.  He said that the government would embark on 
aggressive urban renewal to restore its abandoned housing 
estates and to make them livable.  He also noted that the 
government is no longer building houses, but provides land 
and the environment for private developers to access funds at 
reasonable interest rates to develop properties. 
 
¶33. (U) The policy of restricting banks' lending rates to a 
maximum 400 basis points above the Minimum Rediscount Rate 
(MRR) is not longer valid, according to the CBN. The CBN 
explained that subsequent developments in the economy led to 
the adoption of a market-based framework for monetary policy 
management with the Monetary Policy Rate replacing the MRR. 
Lending rates will still be high because funds for banks are 
still high, the business environment is risky, and future 
inflationary trends are uncertain. 
 
¶34. (U) The World Bank has proposed a new loan of about $2 
billion under its International Development Assistance (IDA) 
for Nigeria between 2008 and 2010.  Specifically, it offers 
Nigeria $450 million in 2008, $877 million in 2009 and $700 
million in 2010.  The loan is tied to projects in education, 
health, roads and agriculture. 
 
------ 
ECOWAS 
------- 
¶35. (U) The Economic Community of West African States 
(ECOWAS) has agreed to pursue a comprehensive, 
development-oriented and mutually beneficial Economic 
Partnership Agreement (EPA) with the European Union (EU). 
The sub-region had failed to meet a December 31, 2007 
deadline for signing of the EPA with the EU. The purpose of 
this agreement is to replace the bilateral trade agreements 
with African, Caribbean and Pacific countries and allow 
access to the EU market. 
 
ABUJA 00000536  006 OF 006 
 
 
 
----------- 
OIL AND GAS 
----------- 
¶36. (U) The U.S oil service firm Expo won contracts valued at 
over $300 million in the last six months in Nigeria and other 
African countries.  The contracts cover a range of offshore 
deepwater products and services and are to be delivered on a 
phased basis over the next three years.  Out of the $300 
million, $60 million were secured for West and South Africa 
region for provision of offshore deepwater technology for 
Chevron, Agip, and Shell in Nigeria, increased scope from BP 
deepwater in Angola, and for Total and Noble in the Cameroon. 
 
 
¶37. (SBU) ExxonMobil resumed full production from its oil 
fields near its Qua Iboe terminal after a minor pipeline 
break caused the release of less than four barrels of oil. 
The company had shut in around 20,000 barrels of oil as a 
precaution.  ExxonMobil has brought in a team from the United 
States to evaluate the pipeline. 
 
¶38. (SBU) After local drivers complained about poor running 
vehicles and engine damage, contaminated gasoline was found 
at gas stations owned by Oando Plc and Mobil Oil Nigeria Plc. 
 The gasoline contained 20 percent ethanol, far above 
Nigerian maximum specifications of 3 to 5 percent.  Nigerian 
companies are not capable of properly handling and storing 
gasoline heavily blended with ethanol.  Oando Plc had 
purchased the gasoline from an international broker then 
distributed it to its own stations and to Mobil.  (Note:  The 
downstream operators take turns importing gasoline which then 
they distribute to other downstream companies on a schedule 
agreed to by Nigerian regulators.  End note.) 
 
¶39. (SBU) A Post contact with a European downstream company 
which did not receive the contaminated gas told Econoff that 
Nigerian regulators failed to inspect the gasoline before it 
was offloaded from the tanker.  He could not say for certain 
why Oando and its broker bought the blended gasoline in the 
first place.  Nigerian regulators have ordered the gasoline 
pulled from the market and may require Oando to pay for 
damages. 
SANDERS