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UNCLAS SECTION 01 OF 05 ABUJA 002438 
 
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 POL/ECON UPDATES FOR DECEMBER 1-14, 
2008 
 
Ref: A. ABUJA 2377 
 ¶B. ABUJA 2358 
 
¶1. (U) The Following is a joint Embassy Abuja, ConGen Lagos 
compilation of December 1-14 political/economic highlights, which 
did not feature in our other reporting, covering: 
 
--Economic News 
--Southern Economic News 
--Delta Security Incidents 
--Oil and Gas 
--Human Rights 
--Labor 
--Corruption 
--Election Tribunals 
 
Economic News 
------------- 
 
¶2. (U) AMERICAN/NIGERIAN AVIATION COMPANY UNVEILING: The Ambassador 
gave welcoming remarks at a dinner honoring the inauguration of a 
new American/Nigerian aviation company - CITA-TRIAX Aviation Ltd - 
on November 25 Abuja.  The company is providing aviation consultant 
services, cargo delivery, and services for infrastructure 
development in West Africa.  To improve capacity building in 
Nigeria's aviation sector, the company announced a partnership with 
Western Michigan University College of Aviation.  The CITA group is 
in discussions with several state governments for a location to 
build a local aviation college campus in Nigeria. 
 
¶3. (U) COCOA EXPORTS ON THE RISE: Nigerian Federal Produce 
Inspection Service announced on November 18 that Nigeria's cocoa 
exports surged 36% in 2008. A total of 119,432 metric tons (mt) was 
shipped, compared with 87,997 mt in 2007.  Nigeria is currently the 
world's fourth largest exporter of cocoa beans. 
 
¶4. (U) INFLATION HITS 14.7 PERCENT: Inflation rose to 14.7% in 
October from 13% in September, the National Bureau of Statistics 
reported on November 19.  Growth in food prices, which form much of 
the index basket, increased to 19.2% in October from 17.1% in 
September. 
 
¶5. (U) WORLD BANK LOANS TO NIGERIA: On November 24 the Minister of 
Finance Shamsuddeen Usman disclosed that since 1999 the World Bank 
has loaned Nigeria nearly $3.5 billion. 
 
¶6. (U) WEST AFRICAN CURRENCY DUE DEC. 2009: In November 24 press 
reports the common West African currency, the Eco, is expected to 
unveil by December 1, 2009.  Not all member states of the West 
African Monetary Agency (WAMA) will join in implementation because 
some countries will not meet the requirements such as an inflation 
rate of 5% and budget deficit of 4% of GDP.  At the time of writing, 
Nigeria does not meet WAMA requirements. 
 
¶7. (U) INDIAN INVESTMENT IN NIGERIA: The Indian Deputy High 
Commissioner reported on November 20 that the Indian government will 
invest over $15 billion into various sectors of the Nigerian economy 
within the next few years.  He disclosed that bilateral trade 
between the two countries was more than $8 billion in 2007 and India 
is the fourth largest non-oil export destination for Nigerian 
products. 
 
¶8. (U) GON ISSUED BONDS VALUED AT $14.6 BILLION: As reported in the 
press on November 24, the total value of bonds issued by the GON in 
the last five years was 1.73 trillion naira ($14.6 billion).  These 
bonds were issued between 2003 and September 2008 to finance capital 
projects. 
 
¶9. (SBU) ISSUANCE OF 20 YEAR BONDS: On November 28, 2008, the 
Nigerian government's Debt Management Office for the time issued 20 
year bonds.  The 20 year bonds have a coupon rate of 15% and 10 
billion naira ($74 million) were issued although total demand was 
23.52 billion naira ($174 million).  The bond issue was 
oversubscribed by 135% because there were 57 bids and only 38 were 
successful.  In a December 4 meeting with the DMO DG, EconSpec was 
told that the DMO was surprised at the demand for the bonds and had 
 
ABUJA 00002438  002 OF 005 
 
 
been warned by industry experts to not go forward with it. 
 
¶10. (U) DEFICIT TO BE FINANCED BY ISSUING BONDS: According to 
President Umar Yar'adua in his budget speech, the federal government 
plans to finance some portion of the proposed deficit in the 2009 
budget by issuing $500 million worth of bonds in the international 
financial markets.  GON officials confirmed that the proposed bond 
issue is primarily aimed at testing the financial market's appetite 
for Nigerian debt instruments.  The terms and schedule for issuing 
the bonds have not been set as yet by the GON. 
 
¶11. (U) WHO MEASLES CAMPAIGN: The World Health Organization (WHO) 
coordinator for Kaduna state announced on November 25 that out of 
800,000 deaths from measles worldwide reported in 2008, 4,000 are 
from Kaduna state.  He stated that 75% of all measles death in 
Africa were in Nigeria and the WHO pre-measles campaign took place 
from November 26-30.  A similar campaign took place in the 17 
remaining states from December 10-14th. 
¶12. (U) INFRASTRUCTURE CONCESSION REGULATORY COMMISSION (ICRC): On 
November 27, President Yar'Adua inaugurated the Board of the ICRC 
whose mandate is to develop and issue guidelines on PPP policies, 
process and procedures.  In addition, the commission will develop 
the appropriate framework to concession and handle all 
infrastructure projects.  The ICRC board has 12 members with Chief 
Ernest Shoneken as a Chairman. 
Southern Economic News 
---------------------- 
 
¶13. (U) At the South-East Economic Summit held in Owerri, Imo State, 
December 4-5, Deputy Senate President, Ike Ekweremadu said the 
federal government has approved plans to upgrade Enugu airport to an 
international airport to serve Nigeria's South East.  Ekweremadu 
said federal legislators from Enugu state have agreed to use their 
constituency allowances to help upgrade the airport and urged the 
region's governors and federal legislators from other South East 
states to support the project.  He said such direct access to the 
world would encourage the Igbo peoples' entrepreneurial spirit and 
help boost the region's economy.  Imo Governors Ikedi Ohakim and 
Anambra Governor Peter Obi attended the conference; other regional 
governors sent representatives. 
 
¶14. (U) On December 12, Anabel Mobile Limited, an integrated mobile 
device and telecommunications content company, launched its new 
product line, a series of phones and Blackberry-like devices capable 
of handling not only phone, text and email access, but also access 
to Microsoft Word, Excel and other computer software.  Microsoft's 
West Africa division told Pol-Econ Chief that the Anabel platform 
was Microsoft's first introduction of the technology in Africa. 
Anabel's President and CEO, Nicholas Okoye, is a former Chairman of 
Transcorp. 
 
¶15. (U) On December 3, Econoffs met with Mansur Ahmed, current 
Director General of the Nigerian Economic Summit Group, who was 
recently appointed head of the Federal Government's new 
Infrastructure Concession Regulatory Commission (ICRC).  He said the 
ICRC will develop and issue guidelines on Nigeria's Public Private 
Partnership (PPP) policies, processes and procedures in 
infrastructure development. The ICRC will collaborate with state 
governments to harmonize the framework for contracting PPP 
infrastructure projects. He said electric power, roads and railways 
will be priorities for the new Commission, though the ICRC will also 
have control of all concessions of trans-state waterways. Ahmed said 
ICRC may start with some viable PPP projects like the Lagos-Ibadan 
motorway and the Lagos-Kano-Nguru rail line. 
 
¶16. (U) On November 27 President Yar'Adua inaugurated the 12-member 
ICRC board in accordance with the ICRC Act passed during President 
Obasanjo's tenure. The board chaired by Chief Ernest Shonekan, 
former Head of Government of Nigeria, is under the President's 
supervision. Though the ICRC is tasked with the responsibility to 
identify potential PPP projects and take a lead in the development 
and procurement processes that will enable private sector 
participation in line with international best practices, it does not 
have the power to sanction erring partners in whatever projects it 
brokers. 
 
 
ABUJA 00002438  003 OF 005 
 
 
Delta Incidents; No Americans Involved 
--------------------------------------- 
 
¶17. (SBU) On December 2 the Bulgarian Foreign Ministry announced the 
release of their citizen, who had been taken hostage the previous 
week.  No further details were provided. 
 
¶18. (SBU) Three Christian missionaries of unspecified West African 
nationality were taken hostage on December 7 according to Post 
security contacts.  They were released unharmed without payment of a 
ransom on December 10. 
 
Oil and Gas 
----------- 
 
¶19. (SBU) Business Day reported on December 10 that the joint 
venture cash call for 2009 will be USD 15 billion, similar to 2008's 
cash call.  Like last year, the GON will be short, funding only USD 
5 billion of the USD 8.8 billion it owes based on its ownership 
stake in the joint ventures.  According to the paper, the GON will 
seek "alternative funding sources" from the credit markets; in 2008 
that meant loans from international oil companies.  (Comment:  This 
is not the ideal time to seek financing from either credit markets 
or oil companies.  Joint venture oil production will not improve 
until the funding issue is resolved.  End Comment.) 
 
¶20. (SBU) Shell announced plans to lay off 1,000 employees from its 
joint venture with the Nigerian National Petroleum Corporation 
(NNPC) as part of a staffing rationalization plan called "One 
Shell".  No timeline for the layoffs was announced and there has 
been no response from NNPC. (Comment:  This is becoming an annual 
holiday ritual for Shell; it tried to lay off employees the same 
time last year under the guise of the One Shell program.  NNPC and 
the GON blocked those layoffs.  End Comment.) 
 
¶21. (U) On December 10, Lagos Consul General met with Uju Ifejika, 
the Managing Director and Chairman of local oil company Brittania-U. 
 Ifejika is the only woman-head of a local oil company in Nigeria 
and is the company's majority shareholder.  In early 2009, 
Brittania-U plans to start production of 10,000 barrels per day from 
the Ajapa oil field located near off-shore Delta State.  Using 
funding from Oceanic Bank, the company purchased an 88,000 
barrel-capacity barge to be used as a floating production platform 
and a 78,000 barrel coastal tanker to transport the oil from the 
field to nearby Escravos oil terminal.  These $12 million dollar 
investments are currently being overhauled in Houma, Louisiana; 
delivery is scheduled for February 2009. 
 
Human Rights 
------------ 
 
¶22. (U) On December 16 Public Affairs' locally engaged staff from 
Jos reported that the Sultan of Sokoto and the head of the Christian 
Association of Nigeria are meeting with both Muslim and Christian 
communities in the area to help further reduce tensions.  In 
addition, the Plateau Government has provided applications for 
communities to fill out for property loss.  Despite this, tension 
remained high in Jos and simple incidents can spank fear.  For 
example, on December 10 a swarm of bees triggered a wave of panic 
that caused many to initially believe the violence had reignited 
(reftel A).   According to reports, a honeycomb fell from a tree 
creating a surge of bees that compelled people to run for safety, 
which in turn caused others in the vicinity to follow suit fearing a 
reprisal of the previous week's violence.   The pandemonium lasted 
for three hours, but subsided due to constant radio announcements 
that there was no cause for alarm.  Although there were no reports 
of actual violence resulting from the chaos, there were minor 
injuries and accidents as a result of people trying to flee the 
area. 
 
Labor 
----- 
 
¶23. (U) According to press reports and embassy sources, the 
Judiciary Staff Union of Nigeria (JUSUN) commenced a nationwide 
strike on December 1 to protest of failure to pay uniform salaries 
 
ABUJA 00002438  004 OF 005 
 
 
to judicial staff at federal and state levels. The strike is the 
second within the year by JUSUN, made up of mostly judiciary 
administration staff, and is crippling court activities in the 
country.  The strike did not affect the Supreme Court's ruling on 
December 13, which ruled in favor of Yar'Adua's 2007 disputed 
election victory.  However, the strike did disrupt the money 
laundering and corruption hearing on charges brought against former 
Edo State Governor Lucky Igbinedion by the Economic and Financial 
Crime Commission (EFCC).  Igbinedion and his team of lawyers arrived 
at the Federal High Court and were refused entrance.  The court will 
resume the trial on December 17. 
 
Corruption 
---------- 
 
¶24. (U) According to the Daily Trust on December 2, the EFCC 
declared five Rivers State officials wanted over $27 million in 
connection with alleged fraud.  The officials included the 
Government House Administration Permanent Secretary Fudera Hark and 
Government House Director of Finance and Accounts Robert Aya, both 
wanted for signing government house checks from an account under 
investigation. Three other people, Harrison Princewill, Nathan Wike 
and Bright Ikonwa, all staff of the Government House are also on the 
wanted list for making substantial withdrawals from the same 
account.  According to the EFCC, "efforts to get the five officials 
to appear before the EFCC have proved difficult as they have taken 
refuge in the Government House in Port Harcourt." 
 
¶25. (U) At a December 1 anti-corruption conference, attended by 
President Yar'Adua and Economic and Financial Crimes Commission 
(EFCC) Chairwoman Waziri, Representative of the United Nations 
Office on Drugs and Crime (UNODC) Oliver Stolpe declared to 
journalists that public office holders in Nigeria have 
misappropriated $100 billion meant for the development of various 
projects across the economy over the years.  The amount is 
approximately three times what Nigeria owes as foreign debt ($28.5 
billion).  Stolpe referenced a recent 2007 survey of 2,203 
businesses, conducted by the EFCC in conjunction with the National 
Bureau of Statistics in Lagos, Delta and seven other states, which 
indicates that 75.6% and 71% of businesses felt strongly that 
crime/security and corruption are impeding the growth of business in 
Nigeria.  Stolpe also told the journalists that the police force 
remained the most corrupt institution in Nigeria, according to 62.6% 
surveyed, but also noted that corruption permeated every facet of 
Nigerian society.  EFCC responded to Stolpe's claims, telling the 
journalists that "over concentration of reporting corruption on 
individuals and persons will not do us good." 
 
¶26. (U) On December 11, Transparency in Nigeria (TIN), an affiliate 
of Transparency International, expressed its reservations to media 
representatives about the independence of the Economic and Financial 
Crimes Commission (EFCC), specifically noting the circumstances 
under which former Chairman Ribadu was removed from office and 
demoted. TIN's Secretary General, Osita Ogbu, also told journalists 
that Ribadu's prosecution appears to be part of the world-wide 
persecution of anti-corruption crusaders and human rights defenders, 
and called on President Yar'Adua's government to uphold its 
commitment under the United Nations Convention against Corruption 
and International Human Rights to ensure that anti-corruption 
advocates can operate in a safe environment. 
 
¶27. (U) On December 10, EFCC Chair Farida Waziri announced Nigeria's 
Anti Corruption Revolution Campaign (ANCOR) in Abuja.  Waziri also 
announced that the EFCC secured 296 convictions within the last five 
years related to cases of corruption, money laundering, advance fee 
fraud, bank fraud, and pipeline vandalism.  Waziri maintained that 
the EFCC recovered assets worth $5.6 billion over the same period 
(Note: Post cannot confirm this number) and revealed that there are 
over 15 cases involving Politically Exposed Persons (PEPs) in 
various stages of prosecution in the courts. 
 
Election Tribunals 
------------------ 
 
¶28. On December 2, the Kogi State Elections Tribunal hearing the 
petition of Abubakar Audu to overturn the March 29, 2008 rerun Kogi 
 
ABUJA 00002438  005 OF 005 
 
 
State Gubernatorial elections upheld the declared victory of sitting 
Governor Ibrahim Idris (reftel B).  The tribunal ruled that the 
petitioner failed to prove beyond reasonable doubt that there were 
malpractices, noting "if election fails in a few polling boths, that 
is not enough to affect the overall result."  (Note: Idris was the 
declared winner in the 2007 gubernatorial polls as well; however, 
the rerun election was called when the Tribunal annulled the 2007 
results.  Observers reported that little progress was made in 
correcting the flaws that plagued the 2007 elections.)  No violence 
was reported following the announcement of the Tribunal ruling. 
 
SANDERS