VZCZCXRO3564
PP RUEHMA RUEHPA
DE RUEHUJA #2008/01 2841633
ZNR UUUUU ZZH
P 101633Z OCT 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 4147
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHYD/AMEMBASSY YAOUNDE 0414
RUEHOS/AMCONSUL LAGOS 0064
RHMFISS/HQ USAFRICOM STUTTGART GE
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RUEKJCS/DIA WASHINGTON DC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHNSC/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 03 ABUJA 002008 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR AF/W, INR/AA 
STATE PASS TO USTR-AGAMA 
DOE FOR GEPERSON 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON EPET ETRD ELAB NI
SUBJECT: NIGERIA: BIWEEKLY POL/ECON UPDATES FOR SEPT 16-30, 2008 
 
REF: A. Abuja 1925 
 
THIS CABLE IS SENSTIVIE BUT UNCLASSIFIED.  NOT FOR INTERNET 
DISTRIBUTION. 
 
¶1. (U) Following is a joint Embassy Abuja-ConGen Lagos Compilation 
of September 16-30, 2008 political/economic highlights, which did 
not feature in our other reporting, covering: 
-- National Assembly 
-- Corruption 
-- Military Affairs 
-- Labor 
-- Economic News 
-- Oil and Gas 
-- Criminal Justice 
 
National Assembly 
----------------- 
¶2. (SBU) MEMBERS OF THE HOUSE SEEK TO INTRODUCE LEGISLATIVE 
DIMENSION TO YAR'ADUA'S 7-POINT AGENDA: Nine Representatives have 
formed a group to promote the enactment of legislation for each of 
the objectives in the President's 7-Point Agenda.  "The 7-PAG", or 
"The 7-Point Agenda Group", came together in July 2008 before the 
National Assembly's recess.  On September 18, Poloff met with the 
group's Coordinator, Representative Samson Osagie (People's 
Democratic Party (PDP), Edo State) in response to a letter of 
introduction sent to the Embassy.  Osagie said the group sees a 
"disconnect" between the executive and legislative branches of 
government in Nigeria.  Therefore, 7-PAG aims to get the House to 
support each point of the President's Seven-Point Agenda with 
legislation.  Osagie specifically highlighted education, 
infrastructure, and agriculture as target areas for improvements. 
 
¶3. (U) NATIONAL ASSEMBLY JOINT COMMITTEE ON THE REVIEW OF THE 1999 
CONSTITUTION (JCRC) EXPANDS MEMBERSHIP TO 88: On September 25 the 
Guardian Newspaper quoted JCRC Chairman, Ike Ekweremadu as saying 
that the committee has 44 members from the House and 44 from the 
Senate (with one member of the House and one Senator from each 
state, one member of the House and one Senator from the Federal 
Capital Territory, and one additional representative from each zone 
to ensure women's interests were covered).  Ekweremadu added that 
the committee would be inaugurated when the National Assembly 
resumes on October 7.  (NOTE: On October 8, the joint committee 
encountered another setback when the House refused to inaugurate its 
portion of the committee, without public explanation.  The federal 
budget money put aside for the exercise will expire if not spent by 
the end of the calendar year.  END NOTE.) 
 
Corruption 
---------- 
¶4. (U) NIGERIA IMPROVES ITS RATING TO 121 OUT OF 180 MOST CORRUPT 
NATIONS: Transparency International (TI), a global civil society 
organization, rated Nigeria 121st in a September survey of 180 most 
corrupt nations.  In 2007, Nigeria ranked 147 and three years 
earlier 152.  TI noted that Nigeria was among several countries with 
significant improvement in the battle against corruption.  In terms 
of the actual corruption perception index (CPI), Nigeria moved from 
a score of 2.2 in 2007 to a score of 2.7 in 2008.  CPI measures the 
perceived levels of public sector corruption on a scale from zero 
(highly corrupt) to ten (highly clean), and carries a plus or minus 
.3 margin of error. 
 
¶5. (U) IBORI'S LAWYER ARRESTED: Former Governor of Delta State James 
Ibori's lawyer, Bhadresh Gohil, was arrested in London and charged 
with money laundering.  Gohil, who works at the London law firm 
Arlingtons Sharmas was arrested for helping the former governor 
launder money, and breaking the UK Proceeds of Crime Act, between 
2005 and 2008. Ibori was arrested last year by the Economic and 
Financial Crimes Commission (EFCC) and arraigned before a Federal 
High Court in Kaduna for alleged financial crimes running into tens 
of billions of naira. 
 
¶6. (U) EFCC FREEZES RIVERS STATE ACCOUNT: The Economic and Financial 
Crimes Commission (EFCC), has frozen one of the accounts of the 
Rivers State government over alleged money laundering.  According to 
 
ABUJA 00002008  002 OF 003 
 
 
EFCC sources, up to $4 million was diverted from government accounts 
to a fictitious account, allegedly by Nyeson Wike, Chief of Staff to 
the governor of Rivers State. 
 
Military Affairs 
---------------- 
¶7. (U) MILITARY TO RECEIVE INCREASED BUDGET: After a September 16 
meeting with the new Service Chiefs, the Office of the President 
announced an increased military budget over the next two years "to 
transform the armed forces (to become a) technology driven, 
well-equipped force (made up of) highly motivated and contented 
officers and men."  While press reports did not give specifics, the 
President is reported to have told the Service Chiefs that he is 
aware of the challenges the military faces and the inadequacy of 
current funding levels and that he hopes to begin to "see tremendous 
improvement in the funding situation because of this change." 
 
Labor 
----- 
¶8. (U) NIGERIAN LABOR MINISTRY INTERVENES IN DISPUTE BETWEEN NUPENG 
AND CHEVRON: The Nigerian Labor Ministry has intervened in the 
dispute between a local branch of the National Union of Petroleum 
and Natural Gas Workers Union (NUPENG) and Chevron Nigeria Ltd. 
(CNL) in an effort to avert a strike.  NUPENG opposes the 
casualization of the workforce, under which CNL employs its members 
as contractors without pensions and other benefits.  General 
Secretary for NUPENG, Bernard Ugbi, warned that a strike will affect 
production of approximately 700,000 barrels of oil a day.  There is 
no firm date yet to hold talks with the ministry and Chevron over 
the labor issues.  A Chevron spokesman in Nigeria declined to 
comment on the dispute. 
 
Economic News 
------------- 
¶9. (U) IMPORTS OF U.S. TALLOW INCREASE: Imports have soared in 2008 
and are expected to reach nearly $80 million, up from $16 million in 
¶2007.  Nigeria is currently the third largest market in the world 
for U.S. tallow.  The rapid growth has been caused by two major 
factors: Overall growth in soap manufacturing in Nigeria and reduced 
competition from domestically produced palm oil.  While tallow 
imports have been at record levels this year, industry sources 
indicate that these imports could slow next year.  In August 2008, 
the GON lifted the prohibition on the importation of soap noodles 
and flakes and instituted a 20 percent duty on these products. 
Industry sources expect strong competition in the next year from 
soap noodles and flake supplies from major palm oil producers in 
Malaysia and Indonesia.  The price of imported soap noodles is often 
cheaper than domestically produced soap largely due to very high 
Nigerian manufacturing costs resulting from routine power shortages. 
 
 
¶10. (U) THE GON REDUCED IMPORT PROHIBITION LIST: The GON reduced the 
number of goods on the import prohibition list from 43 to 26, but 
instituted tariffs on the imported items up to 35%.  On September 
24, the Controller-General of the Nigerian Customs Services Hamman 
Ahmed announced that all transactions and payments for customs 
services would be done though e-payment starting October 1.  See 
reftel A. 
 
¶11. (SBU) EKITI STATE ECONOMIC SUMMIT: Participants at the 
poorly-attended Ekiti State Economic Summit, held June 25-27 at the 
Ekiti Trade Fair Complex, complained about the lack of development 
planning and planning capacity, inconsistency in government policy, 
and the futility of public-private partnerships when no public 
capacity exists.  Governor Oni's (PDP) presentation focused on 
investment opportunities within the state, listing accomplishments 
of his administration to lukewarm applause.  Oni prioritized the 
dairy, brick, ethanol, biodiesel, farm fencing/gate, and cattle 
industries as state priorities.  Frustrations were evident among the 
presenters; one was particularly critical, linking good economic 
development indicators to good governance.  He spoke directly to an 
unimpressed Governor Oni, saying that government's job is to make 
good use of fiscal tools at its disposal and to invest in its 
institutions, human capital, infrastructure and direct production in 
order to create sustainable development.  PolOff visited the Ikogosi 
 
ABUJA 00002008  003 OF 003 
 
 
Warm Spring Resort, touted by Oni as the savior of the Ekiti tourism 
industry.  The small, outdated facility consisted of spring water 
piped into a swimming pool near a run-down hotel. 
 
¶12. (SBU) ONDO STATE - FUEL DEPOT SHORT OF SUPPLY: During a 
September 17 visit to the Ore, Ondo State Nigerian National 
Petroleum Company (NNPC) depot, an assistant to the depot manager 
told Poloff and PolSpec that the depot supplies petroleum products 
to Ondo, Ekiti, Osun, Edo and Kogi states, and receives its supplies 
from Mosimi, a major depot in Ogun State.  During the visit only two 
distribution trucks were observed being filled and four were waiting 
in line.  The manager said there was not enough fuel to fill all the 
other trucks in the parking lot.  If operating at full capacity, the 
depot can provide 300,000 liters a day.  However, theft along the 
pipeline has reduced output.  The depot was shut down following 
extensive vandalization of the 151 kilometer pipeline; it reopened 
in June 2006.  Recently, the Niger Delta militant group MEND 
reportedly issued a warning that it would blow up the pipeline if 
the federal appeals court reinstates former Ondo State Governor 
Agagu (PDP) to his post.  Charges of fraud led an elections tribunal 
to overturn his 2007 election. 
 
Oil and Gas 
----------- 
¶13. (U) $62.5 OIL BENCHMARK FOR 2009 BUDGET: On September 24, the 
Ministry of Finance announced a proposed $62.5 per barrel of oil as 
the benchmark for the 2009 budget.  MinFin projected oil output at 
2.3 million barrels per day (bpd).  The 2008 budget was based on a 
projected production of 2.45 million bpd and a benchmark of $59 per 
barrel.  Nigeria started a process of crude oil benchmarking for its 
budget in 2004 to compensate for the constant fluctuations of prices 
in the oil market. 
 
¶14. (SBU) PIPELINE RUPTURE IN DELTA STATE: A portion of the Chanomi 
Creek oil pipeline in the Warri Southwest Local Government Area in 
Delta State ruptured on October 1.  The pipeline supplies crude oil 
to the Warri refinery.  It is not clear if the rupture was 
accidental or the result of sabotage.  The pipeline was the target 
of repeated attacks in recent years.  Government relations managers 
for the Nigerian National Petroleum Corporation and Chevron said the 
pipeline break did not disrupt supplies to the Warri refinery.  NNPC 
has reportedly awarded a $5.4 million repair contract to Fenog 
Nigeria LTD, a Warri-based, Nigerian-owned company. 
 
Criminal Justice 
---------------- 
¶15. (U) LAGOS STATE - CRIMINAL JUSTICE REFORM: A June 3 workshop on 
the Administration of Criminal Justice Law in Lagos State acquainted 
stakeholders with changes to the Lagos State Criminal Administration 
Law, passed in 2007 and now slowly being implemented around the 
state.  The law targeted specific weaknesses in administration 
including delayed investigations, lack of information sharing among 
agencies, absences of witnesses and investigators during court 
proceedings, prison congestion, and frivolous defense objections 
during court cases.  Included in the law is the country's first plea 
bargain provision, intended to reduce prosecutorial work load and 
court costs. 
 
¶16. (SBU) LAGOS STATE - CRIMINAL CASE TRACKING SYSTEM: A July 10 
meeting with project managers for the British Council-sponsored 
Lagos State case tracking system showed Lagos State's commitment to 
modernizing its Ministry of Justice.  Each of Lagos' five prisons, 
the Ministry of Justice, the Police units and Court systems all 
share information via this computerized system to better track 
arrestees and their cases.  Each agency has dedicated computers, but 
because the computers are not yet connected, information is shared 
via compact disk.  However, project managers stated they are facing 
increasing resistance from senior officials as the project goes 
forward.  Governor Fashola strongly supports the project, the 
managers said, both institutionally and financially, with the result 
that state institutions are less resistant than federal ones to the 
project.