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DE RUEHUJA #2372/01 3401135
ZNR UUUUU ZZH
R 051135Z DEC 08
FM AMEMBASSY ABUJA
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INFO RUEHZK/ECOWAS COLLECTIVE
RUEHYD/AMEMBASSY YAOUNDE 0543
RUEHSA/AMEMBASSY PRETORIA 1557
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

UNCLAS SECTION 01 OF 03 ABUJA 002372 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS TO USTR-AGAMA 
DOE FOR GPERSON, CHAYLOCK 
LABOR FOR SHALEY 
 
E.O. 12958: N/A 
TAGS: PGOV ECON ELAB EPET EFIN EAGR KDEM NI
SUBJECT: NIGERIA:  BI-WEEKLY ECON UPDATES FOR NOVEMBER 15-30, 2008 
 
REF: A. Abuja 2129 
REF: B. Abuja 2339 
 
¶1. (U) The following is a US Mission Nigeria compilation of November 
15-30 political and economic highlights, which did not feature in 
our other reporting, covering: 
 
- - CORRUPTION 
- - DELTA INCIDENTS 
- - OIL AND GAS 
- - AVIATION 
- - FISCAL RESPONSIBILITY 
- - HEALTH 
- - ECONOMIC 
- - POLITICAL 
 
CORRUPTION 
- - - - - - 
¶2. (U) On November 24, Lagos High Court Judge Tijani Abubakar 
granted former Enugu Governor Chimaroke Nnamani leave to travel to 
the United States, in spite of opposition from the Economic and 
Financial Crimes Commission (EFCC).  Nnamani is standing trial on 
charges of fraud, conspiracy, concealment and money laundering 
totaling 5.6 billion naira ($48 million).  Nnamani told the court 
that he was representing the Government of Nigeria at the 63rd 
session of the United Nations General Assembly in New York and 
needed additional time to visit his family in the United States. 
Earlier this year, Nigerian courts released the travel documents of 
three other indicted Governors currently on trial for money 
laundering and official corruption: Ayodele Fayose of Ekiti State, 
James Ibori of Delta State, and Orji Uzor Kalu of Abia State.  The 
three Governors cited medical reasons to support their applications. 
 The courts overruled EFCC prosecutors' objections that releasing 
their passports would cause trial delays and potentially lead to 
evidence tampering. 
 
DELTA SECURITY INCIDENTS; NO AMCITS INVOLVED 
- - - - - - - - - - - - - - - - - - - - - - - 
¶3. (U) "This Day" newspaper reported that a British oil worker was 
kidnapped on November 27.  The worker was traveling alone in an 
upscale area of Port Harcourt and was reportedly off duty at the 
time. 
 
¶4. (SBU) Militants briefly hijacked the MV THOU GALAXY on November 
16 near Escravos, Delta State, releasing the vessel and its 10 
person Filippino crew on November 18.  Local daily "The Punch" 
reported that militants were demanding the release of the MT AKUADA, 
seized by the JTF on November 14 for allegedly participating in 
illegal oil bunkering.  (Note: Some Niger Delta residents allege 
that the JTF seizes only those ships that don't adequately "settle" 
the JTF to ensure safe passage.  End note.) 
 
¶5. (U) On November 18, Chevron declared force majeure on deliveries 
of 90,000 barrels of oil per day until December 31 after an attack 
in Delta State, which damaged the Abiteye-Olero pipeline that feeds 
the Escravos Terminal.  The damaged pipeline forced Chevron to shut 
down most of its onshore fields in Delta State.  The same pipeline 
was damaged as a result of an attack in June 2008, forcing Chevron 
to declare force majeure on 120,000 barrels of oil. 
 
¶6. (SBU) On November 20, the local press reported that the JTF 
repelled militants who attacked their positions near the Escravos 
Terminal.  A subsequent press statement by the "Ijaw Youth Leaders 
Forum" (IYLF) demanded the removal of General Wuyep Rimtip, head of 
the JTF in the western Niger Delta.  In the statement, the IYLF 
threatened attacks on the Escravos facility, including the oil 
terminal and Chevron's massive gas-to-liquids plant currently under 
construction. (Note: Senior Chevron executives have told Energyoff 
that they credit General Rimtip for stopping oil theft from their 
pipelines and wells in Delta State.  End note.) 
 
OIL AND GAS 
- - - - - - 
¶7. (SBU) On November 20, local papers reported that the Federal 
Executive Council has ruled out any decrease in the pump price of 
gasoline, currently fixed at 70 naira per liter ($2.26 per gallon). 
(Comment:  A reduction in the retail price of gasoline was never 
 
ABUJA 00002372  002 OF 003 
 
 
likely, despite trade union demands.  While still spending a 
significant amount on fuel subsidies, lower oil prices have reduced 
the financial pressure on the GON to raise the retail price of 
gasoline, something it reportedly considered earlier in the year 
when oil prices were at record highs.  End Comment.) 
 
¶8. (SBU) On November 26 the Chairman and Managing Director of one of 
Nigeria's largest and oldest indigenous oil companies told EnergyOff 
that President Yar'Adua promised his Special Advisor to the 
President on Petroleum Matters, Dr. Emmanuel Egbogah, that he would 
be the new energy minister.  It appears now, however, that Rilwanu 
Lukman will instead fill that position, which according to the 
Chairman, was the result of pressure from northern leaders who 
insisted that the job go to their fellow northerner.  The Chairman 
also repeated an earlier claim that Lukman reluctantly accepted the 
offer, but with the condition that he leave the position after one 
year.  (Note:  Many local oil executives believe that in addition to 
his health problems and outside business interests, Lukman's 
hesitance stems from the fact he actually lives in Geneva, 
Switzerland, and does not want to take up residence in Nigeria 
again.  End Note.) 
 
¶9. (SBU)  The Managing Director for Petrobras Nigeria told EnergyOff 
on November 26 that 2009 was shaping up to be a bad year for the 
local industry, noting the continuing high cost of operations in 
Nigeria.  When asked about his company's future in light of big oil 
discoveries off the coast of Brazil, the executive said Petrobras 
was scaling back its operational and expansion plans in Nigeria to 
focus on opportunities closer to home. 
 
AVIATION 
- - - - - 
¶10. (U) On November 11, the press reported that the UK Royal 
Aeronautical Society will help Nigeria in determining the causes of 
aircraft accidents and weather related air crashes.  The purpose of 
the collaboration is to help Nigeria minimize and eliminate airplane 
accidents. 
 
FISCAL RESPONSIBILITY 
- - - - - - - - - - - 
¶11. (SBU) On November 10 EconCouns, Acting Deputy AID Mission 
Director, AID Officer and head of USAID REFORMS project met with the 
governors of Benue, Akwa Ibom, Sokoto, Kwara, Bauchi, and Ekiti 
States.  Minister of Finance Usman chaired the meeting, which 
focused on state-level responsibility and procurement and resulted 
in an agreement to set up a joint working group to harmonize and 
facilitate the implementation of related legislation across the 36 
states.  The Minister and some governors emphasized effective law 
enforcement and administration, peer review, donor technical 
assistance, fiscal responsibility, effective procurement, and 
avoiding delays in executing budgets, the latter having been a 
problem following adoption of the national fiscal responsibility 
law.  Usman also informed donor representatives that he was chairing 
a Presidential Committee to explore the possibility of a sovereign 
wealth fund coordinated among federal, state and local levels of 
government. 
 
¶12. (U) As reported in the press on November 14, Director General of 
Budget Office Bright Okogwu stated 91 percent of the 2009 budget 
will be allocated to the capital budget, of which 46 percent will go 
for infrastructural development.  According to Okogwu, 11.9 percent 
of the entire budget will go for power, believing that the 
government would generate an additional 6000 mega watts of 
electricity in 2009. 
 
HEALTH 
- - - - 
¶13. (U) In response to the rise of incidents of polio in northern 
Nigeria, the World Health Organization (WHO) reported that it is 
recruiting and training local chiefs to renew interest in polio 
immunization.  The polio immunization campaign started on November 
13 in Gezawa village, 20 kilometers (12 miles) north of Kano.  Kano 
state has been the epicenter for the transmission of the polio virus 
to other parts of the world for the past five years.  According to 
the WHO figures, Nigeria has recorded 740 new polio cases in 2008 
with Kano accounting for 267, compared to 286 cases countrywide in 
2007, 57 of them in Kano (reftel A). 
 
ABUJA 00002372  003 OF 003 
 
 
 
ECONOMIC 
- - - - - 
¶14. (U) On November 14, the media reported that importers smuggled 
over 17 billion naira ($144 million) worth of fabrics from Dubai 
into Nigeria every year, despite the import ban on textiles. 
Smuggling and infrastructure problems have led to a drop in the 
number of operational textile factories, from 140 to 10.  Some 
industry observers claim that the Nigerian textile industry uses 
outdated equipment and the 70 billion naira ($593 million) GON fund 
for the textile sector has not made much difference.  Meanwhile, 
Nigeria's textile unions recently organized a large conference on 
November 26, attended by Labor Attache, to address the illegal 
importation of Chinese fabric being advertised as made in Nigeria. 
 
 
¶15. (SBU) At a reception on November 29, an executive with the South 
Africa's Nedbank informed the Consul General that the bank has plans 
to open a branch office in Maersk House in Lagos.  Additionally, the 
executive said Nedbank plans to acquire two "third tier" Nigerian 
banks which will give them over 400 branches nationwide. 
 
POLITICAL 
- - - - - 
¶16. (SBU) From November 25-26, PolCouns and PolOff travelled to 
Kaduna to meet with former Nigerian Head of State General Muhamadu 
Buhari (see Ref. B); present a paper for an Anti-Corruption Summit 
sponsored by the Nigerian House of Representatives; and speak at a 
Nigeria Textiles Union conference.  Buhari told PolCouns that his 
political campaign structure remains in place to galvanize voter 
support, should the court annul the 2007 Presidential election.  The 
next day, at what was supposed to be a major anti-corruption 
"summit" sponsored by the Nigerian House of Representatives, 
PolCouns presented a paper on corruption and good governance to a 
sleepy audience of about 70 participants.  PolCouns challenged those 
present to address Nigeria's endemic corruption as a key step in 
reversing the country's long history of underdevelopment; the summit 
facilitator, however, quickly moved on to the next speaker, Aminu 
Bello Masari, who feigned great concern in the need for 
anti-corruption vigilance.  At a textile union conference later in 
the afternoon, Labor Attache conveyed to conference participants the 
USG interest and support for workers' rights, corporate 
responsibility, and the Nigerian labor movement to the extent it 
promotes democratic values and economic development. 
 
¶17. (U) On November 20, the Nigerian National Assembly (NASS) 
commenced its long-awaited review of the 1999 Constitution.  Topping 
the agenda were the issues of federalism, revenue allocation, state 
creation, and electoral reform.  Senate President David Mark assured 
that the legislative exercise would include other stakeholders and 
highlight civil rights and civil liberties, the separation of 
powers, checks and balances, strengthening of judiciary, and freedom 
of the press.  Mark also claimed that when completed, the exercise 
would enhance legitimacy and guarantee a "people's constitution." 
Mark further charged the committee to consider revenue allocation, 
federalism, the immunity clause, council administration, state 
creation, and electoral reform as other urgent areas. 
 
SANDERS