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RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
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RHMFISS/HQ USEUCOM VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

UNCLAS SECTION 01 OF 05 ABUJA 000624 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
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 KJUS MASS ELBR KDEM
PINR, NI 
SUBJECT: NIGERIA: BIWEEKLY POL/ECON UPDATES FOR MAR 17-31, 
2008 
 
THIS CABLE IS SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION. 
 
¶1. (U) Following is a joint Embassy Abuja-ConGen Lagos 
compilation of March 17-31, 2008 political/economic 
highlights, which did not feature in our other reporting, 
covering: 
-- Election Tribunals 
-- PDP Politics 
-- Niger Delta 
-- National Assembly 
-- Labor 
-- Economic News 
-- Military Affairs 
-- Oil and Gas 
 
------------------ 
ELECTION TRIBUNALS 
------------------ 
¶2. (U) KEBBI: Reports surfaced March 27 alleging a "former" 
Chief Justice has been interfering in the proceedings at the 
Kaduna Court of Appeals, which is set to rule on whether to 
uphold the Kebbi State Election Tribunal decision to quash 
the April 2007 election of Usman Dakin-Gari (People's 
Democratic Party, PDP) as governor.  Counsel to the 
Independent National Electoral Commission (INEC) dismissed 
the allegations as baseless; however, opposition politicians 
from the All Nigeria People's Party (ANPP), among others, 
maintain that the appeal court's unwillingness to set a date 
for final judgment one month after closing arguments were 
heard suggests that the appeals court may be compromised. 
 
¶3. (U) EDO: On March 20, the Edo State Election Tribunal 
overturned the election of Governor Oserheimen Osunbor (PDP) 
in favor of former president of the Nigerian Labor Congress 
Adams Oshiomhole (Action Congress, AC).  According to press 
reports, the court ruled in Oshiomhole's favor because he 
received more legitimate votes than did Osunbor.  A Lagos 
contact present during the six-hour ruling told PolOff March 
25 that the number of legitimate votes was determined by 
subtracting fraudulent and "invalid" ballots (neither signed 
nor stamped by polling officials) from figures provided by 
INEC.  Media sources report over 260,000 PDP and 30,000 AC 
votes were invalidated.  Osunbor has said he will appeal the 
ruling.  In the interim, the AC and Labor Party (LP) have 
begun preliminary discussions on setting up a new government. 
 
¶4. (U) OGUN: A Court of Appeals overruled the decision by the 
Ogun State Election Tribunal to dismiss the petition of 
gubernatorial aspirant Ibukunle Amosun (ANPP).  Arrangements 
for a new trial are under way. 
 
¶5. (U) ONDO: The Ondo State Election Tribunal ruled that some 
ballot papers be recounted.  Olusegun Mimiko (LP) had 
contested results in four local government areas, requesting 
a recount of the ballots he claimed had been arbitrarily 
awarded to incumbent governor Olesugon Agagu (PDP).  Agagu 
objected to the motion, claiming that the ballots could have 
been tampered with since the election, but the Tribunal 
permitted a recount. 
 
¶6. (U) OSUN: The Osun State Election Tribunal allowed video 
evidence of alleged vote rigging but denied the motion of 
gubernatorial aspirant Rauf Aregbesola (AC) to allow a 
forensic expert to testify on voting irregularities based on 
fingerprint analysis. 
 
¶7. (U) OYO: On March 20, a split decision by the tribunal 
judges in Oyo State affirmed the election of Governor 
Alao-Akala (PDP).  While deducting 93,000 votes from the ANPP 
and PDP candidates for irregularities, the Tribunal ruled 
that this did not change the fact that Governor Akala still 
received a majority of the votes with a geographical spread 
of at least one quarter of votes cast in two thirds of Oyo,s 
local government areas. 
 
 
ABUJA 00000624  002 OF 005 
 
 
------------ 
PDP POLITICS 
------------ 
¶8. (U) The PDP National Working Committee met March 18 and 
resolved to implement the recommendations of the Ekwueme 
Reconciliation Panel, particularly the welcoming back of G-34 
party founders pushed out during the Obasanjo era, and 
reconsideration of the Board of Trustees chairmanship. 
National Chair Vincent Ogbulafor dissolved the Governing 
Board of the People's Democratic Institute chaired by Bode 
George, which was reconstituted only six weeks ago by 
outgoing party chair Ahmadu Ali. 
 
¶9. (U) Former Finance Minister and PDP founding member Adamu 
Ciroma rebuffed an invitation to rejoin the party's Board of 
Trustees (BOT) in protest over Obasanjo continuing as BOT 
Chair.  Aggrieved members of the PDP, led by anti-Obasanjo 
forces within the so-called G-21, requested that Ogbulafor 
convene a special convention to amend the PDP's constitution 
with respect to BOT chairmanship provisions. 
 
----------- 
NIGER DELTA 
----------- 
¶10. (SBU) On March 24, the Nigerian Army's Joint Task Force 
(JTF) engaged two speed boats carrying 12 militants in 
Okrika, Rivers state.  The Overseas Security Advisory Council 
(OSAC) claimed that four militants were killed and the JTF 
managed to intercept a barge carrying stolen diesel fuel. 
 
¶11. (SBU) On March 21, a fire caused an explosion on a navy 
ship near Port Harcourt, Rivers state.  Two naval officers 
died during this incident.  The Movement for the Emancipation 
of the Niger Delta (MEND) claimed responsibility for this 
attack, a claim OSAC sources dispute. 
 
¶12. (SBU) OSAC sources confirmed to the Lagos RSO that the 
JTF conducted operations in Warri, Delta state on March 19 to 
search and recover weapons munitions.  On March 20, a civil 
society contact told Lagos PolOff that the JTF was raiding 
homes in a predominantly Itsekiri neighborhood in search of 
weapons.  This contact speculated an increase in weapons 
could be attributed either to upcoming local government 
elections or to the anticipated crowning of an Urhobo King 
whom the Itsekiri do not recognize as their paramount ruler. 
 
¶13. (U) According to Nigerian press reports, a barge owned by 
the German firm Julius Burger and five Nigerian crew members 
were released March 17 after being held captive for five days 
in Rivers state.  Press reports claim no ransom was paid for 
their release and no information on the perpetrators was 
provided. 
 
¶14. (U) The trial of Delta militant Henry Okah began April 4 
in Jos, Plateau state.  Some press reports claimed that other 
Delta militants, possibly including released militant Dokubo 
Asari, have been enlisted as witnesses for the prosecution in 
exchange for huge cash payments. 
 
¶15. (U) The President of the Movement for the Survival of the 
Ogoni People (MOSOP), Ledum Mitee, issued a letter to the 
Niger Delta Development Commission (NDDC) in Rivers State to 
express the Ogoni people's displeasure with the NDDC's 2008 
project budget in Rivers State.  The letter accuses the state 
NDDC office of providing Ogoni local government areas the 
fewest number of projects with the least monetary value, and 
offers the NDDC a draft of the Ogoni Development Master Plan 
should the NDDC wish to identify the project priorities of 
the Ogoni. 
 
----------------- 
NATIONAL ASSEMBLY 
----------------- 
¶16. (U) The Senate announced it will begin reviewing and 
making amendments to the 1999 Constitution.  Majority Leader 
Teslim Folarin said the number of amendments may be limited 
 
ABUJA 00000624  003 OF 005 
 
 
to 12, including such contentious issues as state creation, 
derivation, and immunity for governors and the President. 
Folarin attributed the failure of the 2006 amendment process 
to the attempt to address too many issues concurrently. 
 
¶17. (SBU) On March 25, the Governors' Forum announced that 
six, and possibly more, states of the Nigerian federation 
have begun the process of enacting Fiscal Responsibility and 
Public Procurement Acts in line with Abuja's directive to 
ensure accountability and transparency at the state-level. 
The Acts are geared toward combatting corruption, and are 
modeled after similar legislation pending at the National 
Assembly.  The legislation has to pass through each state 
assembly before it is considered law in that state.  State 
governments, which may derive significant revenue from the 
Federation Account, often lack the capacity, technical 
prowess, and political will to ensure that funds are properly 
and usefully managed and allocated.  A dearth of reliable 
infrastructure, access to water, and lack of 
revenue-generating industries and plans have impaired the 
economic growth of many states, and made several reliant 
solely on federal funds to carry out state projects. 
 
----- 
LABOR 
----- 
¶18. (U) During a dinner attended by Lagos PolOff, Peter 
Esele, President of the Petroleum and Natural Gas Senior 
Sector Association of Nigeria (PENGASSAN), warned oil 
companies and the media that PENGASSAN would conduct a 
nationwide strike if Mobil Oil Nigeria did not negotiate the 
proposed firing of approximately 100 workers (including 
branch executive officers and the national treasurer of the 
union).  Since this announcement, the Federal Ministry of 
Labor and Productivity have been in negotiations with 
PENGASSAN and Mobil Oil. 
 
¶19. (SBU) A senior executive at an international oil company 
told Lagos EconOff that a strike by truck drivers against 
Texaco Nigeria has ended.  The unrest, which had been going 
on since mid-January was started after Texaco fired a truck 
contractor for violating safety rules.  The executive claimed 
that Texaco made no concessions and the contractor was not 
re-hired as demanded by the union. 
 
------------- 
ECONOMIC NEWS 
------------- 
¶20. (U) Cost of Doing Business in Nigeria: In its Survey 
Report for March 2008, the International Monetary Fund (IMF) 
reported that Nigeria,s private sector pays seven times more 
for power, compared to its global competitors.  The cost of 
doing business in Nigeria has considerably increased due to 
limited power supply and high transportation costs. 
According to the IMF, the dilapidated state of the country,s 
infrastructure is the main impediment to growth. The report 
contended that the private sector should ultimately be the 
driver of growth, employment creation, and poverty reduction 
in Nigeria. 
 
¶21. (U) Development Credit Authority Program: Ambassador and 
USAID Mission Director signed a Memorandum of Understanding 
with two Nigerian banks, Bank PHB and Skye Bank on March 17, 
as part of a partnership agreement to implement Development 
Credit Authority (DCA) programs in Nigeria worth $11 million. 
 The DCA allows the USG to issue partial loan guarantees to 
small and medium enterprises to pursue agricultural 
development goals. 
 
¶22. (U) Hunger Problems: Minister of Agriculture and Water 
Resources reported that over 65% of Nigerians lack sufficient 
access to the amount and variety of food required for healthy 
living because food supplies don,t meet demand. This 
situation leaves Nigeria highly vulnerable to famine and 
increases poverty.  The Minister reported that some of the 
factors hampering food supply were weak agricultural 
 
ABUJA 00000624  004 OF 005 
 
 
services, overdependence on rain-fed agriculture, general 
market failure, poor rural road network and inadequate 
storage facilities. 
 
¶23. (U) NCC Thank You: In a March 18 meeting with Nigerian 
Copyright Commission (NCC) staff and the Embassy, Director 
General Adewopo thanked the USG for the continued support for 
building capacity within his agency.  Through the Global 
Intellectual Property Academy in Virginia, the USG has 
supported training for more than 10 NCC staffers in the last 
12 months.  Adewopo acknowledged the positive effects the 
training has had on his agency and looks forward to working 
with the USG on upcoming July training in Lagos supported by 
the Department. 
 
¶24. (U) Lekki Free Trade Zone: Lagos EconOffs visited the 
Lekki Free Trade Zone (FTZ), under construction by an 
engineering firm based in Nanjing, China.  The on-site 
supervisor told EconOffs that Lagos Governor Fashola has 
asked that a portion of Phase 1 be completed by May 29, to 
allow for a formal opening of the project.  Construction of 
factory buildings from imported materials, will begin in 
June, the on-site supervisor said.  According to the 
supervisor, an Italian food processing firm and two local oil 
companies, among others, have expressed interest in 
establishing within the FTZ. 
 
¶25. (SBU) Airport Work Stalled: Work on the Akwa Ibom Airport 
has again been suspended because of the state government's 
failure to pay, says US company DynCorp, the primary 
contractor building the airport.  Company contacts told Lagos 
PolOff that government checks delivered to DynCorp's office 
came with instructions to not immediately deposit them. 
While the company has stopped operations, subcontractors 
continue to work at Governor Akpabio's insistence.  The Akwa 
Ibom Finance Commissioner told DynCorp April 3 that the state 
will remedy the payment shortfall.  DynCorp has said that if 
the situation is not resolved by April 10, it will terminate 
the contract. 
 
¶26. (U) Economics of Nigeria's OIC Membership: Nigerian press 
reported March 31 that Nigeria assented to membership in the 
Organization of the Islamic Conference (OIC) for economic 
gain.  Umar Ahmad, an official of the national Islamic body 
Jama'atu Nasril Islam, which is headed by the Sultan of 
Sokoto, claimed former president Obasanjo actively and 
publicly sought Nigeria's admission into the OIC (despite the 
fact that Nigeria joined in 1986 under former head of state 
Ibrahim Babangida).  Ahmad claimed that Obasanjo saw enormous 
potential for economic development and investment for Nigeria 
should it accede to full OIC member status.  (Note: President 
Yar'Adua was the first Nigerian head of state to attend an 
OIC Islamic Summit, having been there for the one recently 
held in Dakar March 12-14.  Press coverage of Yar'Adua's trip 
generally has been positive.  End Note.) 
 
¶27. (U) IDB to Help Launch Nigeria's First Islamic Bank: On 
March 31, the Islamic Development Bank (IDB), the development 
arm of the OIC Finance Committee pledged to give $21 million 
to aid Ja'iz International Bank to begin operations in 
Nigeria.  In addition to the pledged funds, the IDB will also 
aid in technical capacity building, trade, finance, and 
credit lines. 
 
---------------- 
MILITARY AFFAIRS 
---------------- 
¶28. (U) President Yar,Adua has approved an increase in the 
allowances of Nigerian troops on peacekeeping missions, from 
$600 to $1028.  The increase is aimed at helping improve 
troop welfare and morale, and was pushed for by Chief of Army 
Staff General Luka Yusuf. 
 
----------- 
OIL AND GAS 
----------- 
 
ABUJA 00000624  005 OF 005 
 
 
¶29. (U) On March 30, five employees of local oil firm Express 
Gas and Oil Limited were kidnapped off the coast of Ondo 
State.  According to press reports, the kidnappers were youth 
from communities near the company's fields.  Under a court 
injunction to halt suspected graft, Express Oil had stopped 
funding community development projects through local 
associations and community leaders.  The hostages were freed 
March 31. 
 
¶30. (U) Aviation Jet-A fuel shortages returned March 26. 
Flights across the country were delayed or cancelled as 
airlines scrambled to find adequate supplies.  A previous 
shortage was blamed on fuel that did not meet specifications. 
 The cause for this most recent shortage remains unclear. 
 
¶31. (SBU) A contact at a downstream European oil company told 
Lagos EconOff that he believes operations at Nigeria's two 
working refineries are not sustainable and the refineries had 
been rushed into operation to ease political pressure on 
Nigerian National Petroleum Corporation Acting Group Managing 
Director Abubakar Yar'Adua.  The refineries returned to 
service earlier this year although they are reported to be 
working at only 60% capacity.  According to the contact, turn 
around maintenance was not performed on the refineries before 
they restarted and he expects them to be out of service again 
some time this summer. 
SANDERS