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RUEHOS/AMCONSUL LAGOS PRIORITY 9408
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RHMFISS/HQ USAFRICOM STUTTGART GE PRIORITY

UNCLAS SECTION 01 OF 06 ABUJA 001095 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/W, INR/AA 
DEPT PASS TO USTR-AGAMA 
DOE FOR GPERSON, CHAYLOCK 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM ECON EPET ETRD KCOR MOPS NI
SUBJECT: NIGERIA: BI-WEEKLY POL/ECON UPDATES FOR MAY 16-31, 
2008 
 
¶1. (U) Following is a joint Embassy Abuja ConGen Lagos 
compilation of May 16-31, 2008 political/economic highlights, 
which did not feature in our other reporting, covering: 
--Elections 
--National Assembly 
--Military Matters 
--Environment 
--Energy 
--Aviation 
--Debt 
--Fiscal Responsibility 
--Agriculture 
--Oil and Gas 
--Other Important Issues 
 
 
Elections 
----------- 
¶2. (U) Governors Timipre Sylva (PDP, Bayelsa) and Aliyu 
Wamakko (PDP, Sokoto) won their gubernatorial by-elections on 
May 24 and were restored to office.  Both men had governed 
their respective states since May 2007, but had their first 
elections overturned at tribunal and were forced to contest 
again in fresh polls.  Incumbents from the ruling PDP have 
now won all of the four gubernatorial by-elections held so 
far (Kogi, Adamawa, Sokoto, Bayelsa).  There is much 
speculation about whether Sylva and Wamakko,s initial 
tribunal defeat may oddly result in their tenure extension. 
Some commentators contend they are each now entitled to a 
fresh four-year term beginning in May 2008, based on the 
precedent set by the Supreme Court in 2007 in the case of 
Governor Peter Obi (Anambra). 
 
National Assembly 
------------------ 
¶3. (U) The Senate Committee on Drugs, Narcotics and 
Anti-Corruption, in announcing its finding on June 3 that 
Farida Waziri did not assume office at the EFCC prior to 
Senate confirmation, freed the Committee to now focus on her 
actual confirmation hearing, which began June 4.  In her 
first day of Senate hearings, Waziri vowed to end the 
political manipulation of the EFCC, saying there would be "no 
sacred cows."  Waziri denied claims she stood surety for 
former Benue Governor George Akume at the EFCC.  She also 
indicated she would propose an amendment to the EFCC law that 
would prosecute foreigners found to be participating in 
advance fee fraud scams purporting to require assistance to 
remove funds from Nigeria (launder money), even when they 
fall victims to it.  According to Waziri, "we don't believe 
they are victims because they know what they were doing." 
She praised former EFCC Chairman Malam Nuhu Ribadu, noting 
the solid foundation he established and upon which she plans 
to build. 
 
¶4. (U) Freedom Of Information (FOI) passes the Senate, but 
not the House: Poloffs attended a June 2 hearing by the 
Senate Committee on Media and Information on the FOI bill, at 
which organized labor, the military and Senate President 
David Mark (albeit with reservation) endorsed its passage. 
During the hearing, the Federal Minister of Information and 
Communications, Mr. John Odey assured all assembled that 
President Yar,Adua would sign the bill (originally proposed 
nine years ago), as soon as the National Assembly passed it, 
to further the rule of law.  Senator Mark expressed 
reservations about potential misuse of the FOI law, 
suggesting that libel should be made a criminal offense, not 
simply a civil matter, but nevertheless pledged to pass it. 
Confidentiality of sources for journalists is one area of 
concern, with Mark suggesting that journalists should be made 
to disclose all sources if necessary to prove the veracity of 
their stories.  Separately, Nigerian Labor Congress leader 
Olaitan Oyerinde insisted that asset declaration forms 
required by law of public officers (which are now submitted 
to the Code of Conduct Bureau but kept private) should be 
available to the public.  The FOI legislation continues to 
face setbacks in the House of Representatives.  On June 4, 
the House again rejected, for the fourth time in less than 
 
ABUJA 00001095  002 OF 006 
 
 
two months, consideration of its committee report on the FOI 
bill, despite pledges by Speaker Bankole to pass it. 
 
¶5. (U) The House of Representatives has said that separating 
the offices of the Attorney General of the Federation and the 
Minister of Justice (currently merged and held by Michael 
Aondoakaa) and establishing an Independent Investigator's 
Office will be one of the body's priorities during the 
upcoming constitutional review exercise.  The Chairman of the 
House Committee on the Judiciary, Malam Bala Ibn Na'Allah, 
said the continued amalgamation of the two offices was not 
only responsible for the slow adjudication of justice in the 
country but that it also "gives unfettered power to do and 
undo to the AG / Minister of Justice." 
 
¶6. (SBU) Senator Saminu Turaki (PDP, Jigawa) told the media 
in late May that he favors changing Nigeria's presidential 
term of office from four to seven years (including an 
immediate extension of Yar,Adua,s tenure to seven years), 
while establishing an overall limit of two terms (14 years in 
office total).  Turaki explained that longer presidential 
tenure would &allow Nigerians to really benefit from a 
particular government,8 and ensure follow through on 
development programs.  His view has not been well received by 
colleagues in either the Senate or the ruling party.  Senator 
 Eze (PDP, Enugu) called Turaki's comments &unfortunate and 
not expected of a senator who is also a member of the 
Constitution Review Committee. ( It is an attempt to 
truncate our democracy and it is condemnable.8 (Note: 
Turaki, who until 2007 was the Governor of Jigawa State, is 
rumored to have been one of the primary bankrollers of the 
former president's failed 2006 attempt at tenure extension. 
End Note.) 
 
Military Matters 
------------------ 
¶7. (U) On May 21, 46 Nigerian soldiers returning from 
peacekeeping duties in Darfur were killed in a road accident 
after their convoy was rammed by a fuel truck on the 
Bauchi-Maiduguri highway in northwest Nigeria.  An unknown 
number of soldiers were also injured.  Ambassador Sanders 
sent a condolence letter to President Yar'Adua expressing her 
sympathy and the support of the American people. 
 
¶8. (U) The Punch newspaper reported on May 28 that Nigerian 
Foreign Minister Maduekwe said that AFRICOM is now acceptable 
to the GON.  Citing a difference between previous U.S. 
military action in Africa, which he criticized and described 
as "AFRICOM 1," he asserted that "AFRICOM 2" (the new 
command) will be of benefit to Nigeria by way of training and 
anti-terror capabilities.  The Nigerian Chief of Defense 
Staff, General Azazi also made positive public statement on 
AFRICOM in the run-up to the Africa Endeavor exercise in July 
¶2008. 
 
¶9. (U) According to press reports May 23, Nigerian 
Lieutenant-General Chikadibia Obiakor will be named the UN's 
Military Advisor.  He is currently serving as the Force 
Commander of the UN mission in Liberia and had previously 
served as Chief of Administration of the Nigerian Army. 
Obiakor also served in ECOMOG 1996-1997.  Nigerian press 
attributes Obiakor's appointment to this key UN position to 
GON lobbying efforts to obtain more UN positions for 
Nigerians.  FM Maduekwe is said to have finalized Obiakor's 
appointment during his mid-May visit to UNSYG Ban Ki-Moon. 
 
10.(SBU) Recent newspapers report suggest that funding for 
the Nigerian Armed Forces may be doubled in the 2009 budget 
in an effort to "tackle the gradual decay" brought on by 
years of insufficient funding.  Nigeria's current (2008) 
budget reportedly allots around $1.6 billion for the 
military, although it is said that President Yar'Adua was 
recently able to raise another $680 million (from unknown 
sources) in order to pay salary arrears to the armed forces. 
Embassy contacts believe that the military will likely 
receive additional funding in the 2009 budget, but they are 
skeptical that the increase will be as large as what the 
 
ABUJA 00001095  003 OF 006 
 
 
press is reporting. 
 
Niger Delta 
------------- 
¶11. (U) President Yar'Adua has presented the National 
Assembly with a $679 million budget for the Niger Delta 
Development Commission (NDDC).  Out of this amount, 
development projects are allocated approximately $611 
million, while personnel, capital, and recurrent expenditures 
are given approximately $68 million.  During his May 29 
televised press event, to note his one year in office, 
President Yar'Adua promised to release all funds allocated to 
the NDDC and to provide additional "intervention funds" as 
part of his strategy to resolve the Niger Delta crisis. 
 
Environment 
------------ 
¶12. (SBU) The Senate Committee on Environment and Ecology 
held hearings May 16 on a proposed bill to establish a 
Nigerian National Climate Change Commission.  The bill has 
passed its second reading.  The committee was chaired by 
Senator Dr. Grace Bent and the Minister for Environment Mrs. 
Halima Tayo Alao was one of the presenters.  Embassy contacts 
told us that in general, the spirit of the meeting was good, 
but that the most relevant agencies were left out, and that 
the NCCC would duplicate efforts of other government 
agencies. 
 
¶13. (U) Dr. Newton Jubinoh, retired CEO/Chairman of Costain, 
international engineering and consulting firm, and a founder 
of Fight Against Desert Encroachment (FADE), and publicist 
Ebun Olatoye were in the United States from May 11-17 for a 
VolVis program in Tucson, Arizona and Reno, Nevada on 
desertification.  Dr. Jibunoh led his third expedition across 
the Sahara in late April and received a &Green Award from 
the U.S. Embassy for his work on desertification.  Upon his 
return to Nigeria, the Mission plans to ask Dr. Jibunoh and 
Ebun to give a presentation on their Sahara trip. 
 
Energy 
------ 
¶14. (SBU) Director-General/CEO of the Nigerian Energy 
Commission, Professor Abubakar Sambo, told EconOff on May 19 
that there is the potential to use Jatropha to produce 
biodiesel for electricity generation and feedstock.  Sambo 
said there is excitement about the development of the 
Jatropha crop because it needs little or no irrigation, can 
be interplanted, takes three years to first yield and has a 
30 year expected production cycle.  The shrub plant does very 
well in the arid and semi-arid areas of the 19 states of 
northern Nigeria and a few other states in the south.   The 
GON sees the Jatropha development as a tool for poverty 
reduction and to help meet Millennium Development Goals. 
(COMMENT: The GON is not yet fully confident in its ability 
to develop this market and has visited China and Brazil to 
seek ideas on how to develop an appropriate infrastructure. 
No production sites have been identified to date.  END 
COMMENT) 
 
¶15. (U) Oyo State government signed a Memorandum of 
Understanding with Zia Energy International, a subsidiary of 
Zia Metallurgical Processes, Inc., a United States industrial 
company that will be generating electricity from organic 
waste.  The project is expected to start before the end of 
the year.  Governor Adebayo Alao-Akala said that the dump 
site at Awotan in Iddo Local Government Area had been 
allocated to the U.S. firm. 
 
¶16. (SBU) Nigeria,s U.S. educated Minister of the Federal 
Capital Territory (FTC) told Ambassador on June 5 that the 
FTC continues to partner with U.S. companies on alternative 
energy sources, with a recently completed project to provide 
solar powered street lights in parts of FTC. 
 
Aviation 
-------- 
¶17. (SBU) On May 14, the Nigerian government sent a letter 
 
ABUJA 00001095  004 OF 006 
 
 
from President Yar,Adua to President Bush contending that 
the GON has commenced amending aviation laws in accordance 
with FAA recommendations.  These recommendations stem from a 
January 2008 FAA technical assistance visit to Lagos, in 
which the FAA concluded that the following legislation did 
not meet International Civil Aviation Organization (ICAO) 
standards - the Nigerian Airspace Management Agency Act 
(NAMA) of 1999; the Federal Airports Authority of Nigeria Act 
(FAAN) of 1996; and the Nigerian Meteorological Agency Act 
(NIMET) of 2003.  As a result of conflicting legislation, 
several agencies roles and responsibilities are duplicative 
and unclear.  The GON amendment will give the Nigerian Civil 
Aviation Agency (NCAA) full and unfettered authority for 
regulatory oversight of the entire Aviation industry, in line 
with standard of the International Civil Aviation 
Organization (ICAO). 
 
Debt 
---- 
¶18. (U) The GON rejected a $2.5 billion loan offered by the 
Chinese government for proposed new rail lines from Lagos to 
other parts of the country.   The Director General of the 
Debt Management Office, Dr. Abraham Nwankwo, announced on May 
20 that the decision was in line with President Yar,Adua,s 
position to not take non-concessionary loans.  The GON is 
working on the legal framework which could make it possible 
for the Nigerian private sector to access this loan for 
infrastructure development. 
 
¶19. (U) The GON borrowed $180 million from the World Bank to 
fund educational sector development.  The Education Minister, 
Igwe Aja-Nwachukwu, announced that if Nigeria is to become 
one of the top 20 economies by year 2020 it must begin to 
educate students on entrepreneurship knowledge and skills. 
The loan will be used to enhance development of the 
entrepreneurship education at the universities. 
 
Fiscal Responsibility 
--------------------- 
¶20. (SBU) The United Nations Development Program (UNDP), UK 
Department for International Development(DFID), the World 
Bank and United Stated Agency for International Development 
(USAID) in collaboration with the Government of Nigeria (GON) 
rolled out technical assistance to the 36 states of the 
federation to design and enact fiscal responsibility and 
public procurement legislation.   Workshops have been held in 
Calabar, Kaduna and Abuja, reaching all of the states.  In 
opening the Calabar workshop which took place from May 12-15, 
2008, the Deputy Governor of Cross River state Mr. Efiok 
Essien Cobham noted that &adoption and implementation of 
prudent fiscal policies and practices by the incumbent 
government will lay a firm foundation for the socio-economic 
prosperity of future generations.8  At the workshops, 
experts shared lessons learned from similar legislation at 
the federal level and in other countries with state delegates 
who also discussed their specific legislative needs and 
developed plans of action for advancing the process. 
Comments by participants indicated commitment to advancing 
the state-level laws in these areas.  Through fiscal 
responsibility regimes, public officials are formally 
required to engage in economic planning, prudent budgeting 
and responsible debt management.  Public procurement 
legislation will help to control corruption and ensure the 
cost-effective utilization of public funds. 
 
Agriculture 
----------- 
¶21. (SBU and Business Proprietary Information) On May 22 
during a meeting between EconOffs and John Deere 
International (JD), JD reps told us that the company had 
signed a distribution agreement with the Nigerian company - 
AgroPro.  With AgroPro as its Nigerian distributor, JD 
expects to grow its Nigerian business and hopes to open 
thirty retail and service branches by 2011.  JD is focusing 
on renting tractors and equipment initially and expects to 
move toward more sales in the future.  The National Food 
Resource Agency has contacted JD and is interested in 
 
ABUJA 00001095  005 OF 006 
 
 
subsidizing tractor sales to its partners.  JD expects the 
first service branch to open in Kaduna by the end of June and 
with the first order for 30 tractors.  Tractors suited to 
Nigeria,s climate and conditions are manufactured in JD,s 
factories in India and Brazil. 
 
¶22. (U) The GON signed a Memorandum of Understanding (MOU) 
with the Korean government for the establishment of a $1.8 
million rice processing mill.  The MOU, signed by the 
National Food Reserve Agency and the Korean International 
Cooperation Agency is for the development and improvement of 
indigenous rice and post harvest processing in the country. 
The project will be will be funded through grant-in-aid over 
the next two years and the factory will be located in Bida, 
Niger state. 
 
¶23. (U) A 15 member delegation from the Kaduna 
Nigerian-American Chamber of Commerce returned from a May 
trade visit to Detroit with renewed interest in purchasing 
U.S. products.  In a conversation on May 30, the 
delegation,s leader and the President of the Kaduna NACC, 
Hajiya Habiba, thanked EconOfff for his assistance and 
expressed particularly interest in purchasing U.S. products. 
(NOTE:  EconOff met with Kaduna NACC in September 2007 and 
encouraged NACC to visit U.S. to seek ties.  END NOTE). 
Members of the delegation are interested in purchasing solar 
equipment, and medical equipment.  They are also seeking 
advice on preserving and packaging agricultural products for 
the U.S. market.  Next step is Mission Nigeria will put 
together a team representing Foreign Commercial Service, 
Embassy Econ, Foreign Agricultural Service and AID to visit 
Kaduna to provide information on purchasing U.S. products and 
AGOA trade export assistance. 
 
Oil and Gas 
----------- 
¶24. (SBU) An official with Nigerian Liquefied Natural Gas 
(NLNG) told Econoff that the Chairman of the Niger Delta 
Development Commission (NDDC) was behind legislation that 
would repeal the 1989 NLNG Fiscal Incentives and Guarantees 
Act.  The 1989 Act provides the fiscal terms for Nigeria's 
massive NLNG facility and exempts the company from certain 
taxes, among them, a three percent levy on oil company 
revenues that goes to support the NDDC.  The repeal bill was 
introduced by Ogun State Representative Gbenga Odowaiye 
although NLNG is located on Bonny Island in Rivers State. 
The NLNG contact confided that company's debt rating agencies 
did not yet know of the bill.  He did not think the bill 
would pass, but worried that news of its introduction would 
frighten potential investors in NLNG's train seven. 
(Comment:  News of the bill is now public.  While it may not 
ultimately pass the legislature, the proposal, coming in the 
midst of Nigeria's attempt to attract foreign financing for 
development of its natural gas sector, must have potential 
investors scratching their heads.  Odowaiye's claim that 
repeal of the 1989 Act is necessary because NLNG refuses to 
"contribute to the development of its host community" should 
be easy to dismiss; the nearby town of Bonny enjoys almost 
continuous electrical power supplied by generators used to 
power the LNG facility.  In fact, it may be one of the few 
towns in Nigeria to have 24/7 electrical power.  End 
Comment.) 
 
¶25. (SBU) The Nigerian National Petroleum Corporation wrapped 
up a week long road show that sought to promote investment in 
its recently released Natural Gas Master Plan.  The plan, 
long-circulated among industry insiders, calls for USD 30 
billion dollars of investment in Nigeria's natural gas 
infrastructure over the next decade.  The Abuja presentation, 
which was followed by presentations in London and Singapore, 
was marred with several glitches.  Most tellingly, the 
Minister of State for Gas, Emmanuel Odusina, abruptly ended a 
planned hour long question and answer period thirty minutes 
into the session after one Nigerian industry executive after 
the next took the opportunity to complain about the slow pace 
of sector reform and the threat the Gas Master Plan posed to 
existing gas agreements.  One private equity contact was 
 
ABUJA 00001095  006 OF 006 
 
 
cautiously optimistic that good investment opportunities 
existed, but he and others thought the full Gas Master Plan 
was far too ambitious for a government not known for seeing 
such projects to completion. 
 
Other Important Issues 
----------------------- 
¶26. (SBU) Turnover at Customs Service: The GON appointed a 
new Controller General of Customs, Hamman Kajoli Ahmed, on 
May 27.  Ahmed replaces Jacob Gyang Buba who,s four-year 
tenure ended.  Ahmed is a graduate of Ahmedu Bello University 
in Zaria, and started his career as a Superintendent of 
Customs and rose to Assistant Controller-General before the 
new appointment.  Industry contacts suspect that Buba was 
removed due to corruption issues, but the GON provided no 
official explanation for the change. 
 
¶27. (U) Increase in bus fares in Lagos: Protests by commuters 
in Lagos State caused local authorities to reverse a sudden 
increase in bus fares on the Lagos State Bus Rapid Transit 
(BRT) system.  The price for a short trip had unexpectedly 
doubled from 50 naira to 100 naira.  Officials of the Lagos 
Metropolitan Area Transport Authority (LAMATA), the operator 
of the BRT, said they would revert to the old rate following 
protests at some BRT terminals.  Meanwhile, long queues at 
BRT bus stops despite the inclement weather point to the 
system's growing popularity.  The World Bank-assisted project 
is part of the state government's response to Lagos' 
notorious traffic jams. 
 
¶28. (SBU) Increase in child prostitution: During a May 30 
meeting with PolEcon Chief, Godwin Morka, zonal head of the 
Lagos National Agency for the Prohibition of Trafficking in 
Persons (NAPTIP), said that an increasing number of child 
prostitutes over the past few years have come from the local 
government area of Oron, in Akwa Ibom state.  Morka estimated 
that the Lagos NAPTIP shelter has assisted 150 girls over the 
past 18 months from this area alone.  He estimated that 
approximately 20,000 women from Akwa Ibom state are engaged 
in prostitution in Lagos alone; 5,000-6,000 of which are from 
Oron.  The Oron Community Union, through its representatives 
in Lagos, have been meeting with Morka, he said, in an 
attempt to stem the tide. 
SANDERS