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P 260920Z JUN 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 3237
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHYD/AMEMBASSY YAOUNDE 0284
RUEHOS/AMCONSUL LAGOS 9503
RHMFISS/HQ USAFRICOM STUTTGART GE
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHDC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

UNCLAS SECTION 01 OF 03 ABUJA 001245 
 
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 JUNE 1-15, 
2008 
 
REF: ABUJA 1014 
 
¶1. (U) Following is a joint Embassy Abuja ConGen Lagos 
compilation of June 1-15, 2008 political/economic highlights, 
which did not feature in our other reporting, covering: 
 
-- National Assembly 
-- The Presidency 
-- Niger Delta 
-- Oil and Gas 
-- General Economic News 
-- Other Important Issues 
 
National Assembly 
----------------- 
¶2. (SBU) On June 3, 2008 former Senator Abba-Aji replaced 
former Senator Florence Ita-Giwa as the President's Special 
Advisor for National Assembly matters.  Ita-Giwa's exit came 
only a few days after the Presidency announced the departure 
of Chief of Staff General Abdullahi Mohammed.  Like General 
Mohammed, Senator Ita-Giwa was first appointed under the 
Obasanjo administration and had been retained by President 
Yar'Adua.  Although Ita-Giwa insisted that she voluntarily 
left the Special Advisor post to "concentrate on and serve 
her own people" from the Bakassi region, many observers 
believe her resignation, coupled with her speedy replacement 
by a loyal Yar'Adua man, is another diminution of former 
President Obasanjo's political influence within the current 
government. 
 
¶3. (U) On June 15th, the Senate Committee on the Federal 
Capital Territory (FCT) recommended that the FCT government 
revoke the titles to a total of 4,352 plots of land in Abuja 
allocated by former FCT Minister Mallam Nasir El-Rufai during 
his final 30 days in office.  The recommendation was 
contained in the committee's interim report on its 
investigation into activities of the past FCT Administration 
(1999-2007).  Senators faulted the allocations, particularly 
those to Rufai,s family members, as well as 655 plots signed 
out by Rufai May 28, 2007 (the last day of the previous 
administration) several days after the dissolution of the 
Federal Executive Council by the former President.  The 
Senate committee has concluded that the land distributions in 
the final days of the administration were illegal because by 
law Rufai was no longer the minister after Obasanjo dissolved 
his cabinet. 
 
The Presidency 
-------------- 
¶4. (SBU) On June 8, 2008, Joseph Makoju, Special Advisor to 
the President on Energy, announced his resignation from the 
government.  However, Makojou, another holdover from the 
previous administration, has offered to continue to advise 
Yar'Adua in an "honorary" capacity.  Makojou was first 
appointed by former President Obasanjo to turn around the 
crisis-ridden Nigeria Electric Power Authority (now named 
Power Holding Company of Nigeria), and was then elevated to 
the position of Presidential Advisor.  In spite of the 
lingering crisis in the energy sector, he remained an 
influential figure in the last administration.  His exit is 
viewed as another setback for Obasanjo. 
 
Niger Delta 
----------- 
¶5. (U) The GON signed a Memorandum of Understanding (MOU) 
with the British government for the establishment of a legal 
framework for permanent and visiting military training teams. 
 While press reports did not give the specifics of the June 
12 agreement, it appears the MOU will lay the groundwork for 
greater UK involvement in the training of Nigerian military 
forces operating in the restive Niger Delta region, and 
possibly also in preparing Nigerian troops for their 
international peacekeeping deployments.  In signing the 
agreement, Minister of Defense Mahmud Yayale Ahmed is 
reported to have said that the lack of British military 
involvement with Nigeria "has allowed others to scavenge and 
take into more and more of our defense policies."  While Post 
 
ABUJA 00001245  002 OF 003 
 
 
is unsure what the DefMin meant by this, his comments were 
made at a time when Nigeria's military has been increasing 
its engagement with foreign, primarily Western, militaries, 
including with his Chief of Defense Staff publicly talking 
about working with Africom. 
 
¶6. (U) In the face of criticism from the Movement for the 
Survival of the Ogoni People and the Ijaw Youth Council, 
Senior Special Assistant to the Vice President Ima Niboro 
issued a June 12 statement supporting the choice of U.N. 
Under-Secretary General for Political Affairs Ibrahim Agboola 
Gambari as chairman of the steering committee for the 
upcoming summit on the Niger Delta.  The statement said that 
Gambari's extensive experience in international conflict 
resolution gave the "Niger Delta issue a global perspective." 
 Several indigenous ethnic groups have criticized what they 
say was Gambari's lack of a constructive role following the 
1995 execution of Ken Saro-Wiwa and ten other Ogoni 
activists, and have threatened to boycott any proceedings 
held under Gambari's auspices. 
 
Oil and Gas 
----------- 
¶7. (U) The GON has delayed a decision on raising gasoline 
prices until December 31, 2008.  While announcing the delay, 
the Minister of State for Energy (Petroleum) Odein Ajumogobia 
hinted at the possibility that a change to subsidy would 
target assistance to the poor rather than set one fixed 
gasoline price for all consumers.  Union leaders said that 
any price increase would be unacceptable. 
 
Banking Sector 
-------------- 
¶8. (U) On May 11, the Executive Director of Corporate Banking 
at Oceanic Bank told Econoff of plans to reinvigorate the 
Association of Nigerian Bankers.  In addition to acting as a 
type of think tank for banking and management best practices, 
the association will serve as a banking trade group to 
articulate the industry's views on government policy.  The 
association will be separate from the Bankers Committee, a 
semi-regulatory body chaired by the Central Bank of Nigeria 
(CBN). 
 
¶9. (U) On June 2, the CBN increased the Monetary Policy Rate 
from 10% to 10.25%, its third increase this year (see 
reftel).  During the Monetary Policy Committee meeting, the 
CBN also increased the cash reserve requirement from 3% to 4% 
for commercial banks, with an effective date of June 9. 
 
¶10. (U) On June 11, the Nigerian Minister of Finance 
announced that the South African government endorsed three 
Nigerian banks to operate in South Africa: First Bank, Union 
Bank and United Bank of Africa (UBA). 
 
¶11. (U) In cooperation with a June 12-13 U.S. Mission event 
on export credit financing for the Export-Import Bank 
(Ex-Im), U.S. Trade Development Agency, Foreign Agricultural 
Service, and Foreign Commercial Service, Ex-Im announced that 
it is more doubling the size of the Nigerian Bank Facility to 
 $1 billion.  The Facility covering 14 Nigerian banks allows 
for expedited processing of short- and medium-term insurance, 
and guarantees transactions in support of U.S. exports.  The 
increase in the Facility is to meet Nigerian banks growing 
demand for medium-term financing (5-7 years) to support U.S. 
exports of passenger aircraft, oil and gas equipment, 
dredges, and telecommunications and manufacturing equipment. 
 
Other Important News 
-------------------- 
¶12. (SBU) Cancer Rates in Abia State: A team of doctors from 
MD Anderson Cancer Center in Houston, Texas visiting Abia 
State told PolOffs on April 13 that the incidence of cancer 
in Abia State was overwhelming.  The group was concerned with 
the rising number of breast cancer cases in the region, and 
it recommended investigations into lifestyle, water and food 
sources, and environmental factors as possible causes.  The 
team focused on capacity building of available health care 
 
ABUJA 00001245  003 OF 003 
 
 
facility staff, public education, cancer screenings and 
subsequent referrals to local hospitals, and the 
establishment of an effective referral system.  The First 
Lady of Abia State provided transportation for the group, and 
said she would pay for the follow-up care of the patients 
seen by the team. 
 
¶13. (U) Import Duties: In a front page headline, the daily 
"Leadership" urged the GON to "review import duties and to 
allow for a free flow of goods into the country."  The 
article commented that "the high import tariff regime is 
counterproductive and largely responsible for the low revenue 
from customs duties even at this time of import boom." 
Meanwhile, Ambassador, Econoff, and USAID have followed up on 
this issue with both the Minister of Commerce (June 10) and 
Minister of Agriculture (June 24) on these issues. 
 
¶14. (U) Cocoa Farming: Akinwale Ojo, Executive Secretary for 
the Cocoa Association of Nigeria, has urged the GON to offer 
cash subsidies to farmers, contending that the GON should do 
more than just distribute insecticides.  He told the press 
that all of Nigeria's cocoa production is exported, 14 out of 
36 states produce cocoa, and 80% of the production comes from 
five primary states. 
 
¶15. (U) Roadway Funding: The Federal Executive Council (FEC) 
approved on June 11 a loan of N38.28 billion ($330 million) 
for federal road infrastructure development and upgrade.  The 
interest-free loan is to be secured from the International 
Development Association of the World Bank and will be used 
for the upgrade of the Sagamu-Ibadan Expressway, the 
Abuja-Kaduna-Zaria-Kano link road, and the 
Enugu-Abakiliki-Ogoja junction.  The project is expected to 
start on July 28 of this year and end in 2016. 
 
¶16. (SBU) Nigerian Customs Service (NCS) shakeup continues: 
The GON has re-structured the NCS, breaking the service into 
four departments: Corporate Support Service, Strategic 
Research and Policy, Tariff and Trade, and Enforcement, 
Investigation and Inspection.  The move also led to the 
removal/retirement of eight top officials, including Deputy 
Controller General A.K. Haliru and Assistant Controller 
General B.L. Kpagih, who both met with EconOff on May 8 to 
discuss temporary import licenses. 
 
¶17. (SBU) Energy Partners Coordination Forum:  At urging of 
Embassy Econ and USAID, the World Bank convened a new energy 
partners working group on June 5.  The group should prove a 
useful forum for coordination on oil and gas and electric 
power policy and program initiatives.  Participants included 
UNDP, AfDB, ECOWAS, UNIDO and German, French and U.K. reps. 
Upcoming meetings will focus on rural access, renewable 
energy, private sector investment, and broader policy issues. 
 
¶18. (SBU) Dept Management Office:  Acting AID Mission 
Director, Econcouns and U.S. Treasury Resident Advisor met 
with DMO Director General Dr. Abraham Nwankwo to celebrate 
eight years of productive USG technical assistance to the 
DMO.  The TA has accomplished the following:  move of 
domestic debt portfolio from the Central Bank to the DMO, 
relaunch of Federal Government Bond Market in 2003 after a 
lapse of 18 years, development of secondary market in 
government securities and bonds, licensing of 19 primary 
dealers and market makers, and improvement in Nigeria's 
credit rating.  DMO has a new focus on debt management at the 
state level.  The agency will keep close contact with 
Embassy, USAID and Treasury about its efforts and possible 
needs for assistance going forward.  One area not addressed 
in this closeout meeting was need for federal ministries and 
other agencies to establish dedicated accounts within the 
central bank, in place of the current use of commercial 
accounts for ongoing government functioning. 
SANDERS