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RR RUEHMA RUEHPA
DE RUEHUJA #0316/01 0540955
ZNR UUUUU ZZH
R 230955Z FEB 09
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC 5337
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHYD/AMEMBASSY YAOUNDE 0663
RUEHSA/AMEMBASSY PRETORIA 1697
RUEHGB/AMEMBASSY BAGHDAD 0064
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAIIA/CIA WASHDC
RUEKDIA/DIA WASHDC
RHMFISS/HQ USAFRICOM STUTTGART GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

UNCLAS SECTION 01 OF 04 ABUJA 000316 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT PASS TO USTR-AGAMA 
BAGHDAD FOR DMCCULLOUGH 
DOE FOR GPERSON, CHAYLOCK 
LABOR FOR SHALEY 
USDA/FAS/OTP FOR MCKENZIE 
DEPARTMENT PASS TO USAID/AFR FOR ATWOOD 
 
E.O. 12958: N/A 
TAGS: PGOV ECON ELAB EPET EFIN EAGR KDEM NI
 
SUBJECT: NIGERIA - BI-WEEKLY POL/ECON UPDATES FOR FEBRUARY 1-14, 
2009 
 
¶1. (U) The following is a joint Embassy Abuja, ConGen Lagos 
compilation of February 1-14 political/economic highlights, which 
did not feature in our other reporting, covering: 
 
--Economy 
--Politics 
--Agriculture 
--Environment and Health 
--Aviation 
--Elections 
--Corruption and Crime 
--Oil, Gas, and Power 
--Delta Incidents 
 
ECONOMY 
------- 
 
¶2. (U) PRICES OF COMMODITIES RISE AS NAIRA FALLS: A market survey 
report published on February 12 revealed that commodity prices have 
significantly appreciated, due to increase in transportation and 
production costs.  A bag of cement which sold for 1,650 naira ($11) 
in December 2008 now goes for 1,800 naira ($12). 
 
¶3. (U) FINANCE MINISTER URGES TRANSPARENCY IN TAX COLLECTION: 
During the first management meeting of the Federal Inland Revenue 
Service (FIRS), Finance Minister Muhtar said the GON was not 
comfortable with spending on sectors that did not reciprocate in 
terms of returns on investments and that spending in the extractive 
industry, solid minerals and mining sectors have not been 
reciprocated.  Muhtar also said tax evasion constitutes a major 
source of revenue leakage.  The Ministry reported that the Tax 
Appeal Tribunals would soon be constituted to promote taxation as an 
effective tool for economic development. 
 
¶4. (SBU) AMERICAN BUSINESS COUNCIL DISCUSSES GLOBAL FINANCIAL 
CRISIS:  On February 11, Lagos Consul General Donna Blair hosted a 
breakfast meeting of the American Business Council (ABC) to discuss 
the global financial crisis and its impact on Nigeria.  ABC members, 
(including the Nigerian directors of a major American bank, an 
indigenous oil company, a private equity firm specializing in West 
Africa, and a large U.S. consumer products manufacturer) agreed that 
while the Nigerian Central Bank governor appears more sober in his 
assessment of the Nigerian economy, the Central Bank is still not 
taking appropriate action to combat a potential crisis in the 
Nigerian banking sector.  However, the American bank director said 
Nigerian banks may be less vulnerable to bad assets since they are 
generally less leveraged that their western counterparts.  He 
forecast that the naira would likely stabilize at 150 naira to the 
USD if oil prices stayed near $45 per barrel.  ABC members noted 
that a lack of transparency in the Nigerian banking sector makes it 
difficult for outsiders, including Central Bank examiners, to 
understand the extent and nature of "toxic assets" on the balance 
sheets of Nigeria's biggest banks.  This uncertainty could continue 
to put downward pressure on the naira. 
 
POLITICS 
-------- 
¶5. (U) HOUSE OF REPS RETURNS 2 BILLION NAIRA UNSPENT TO TREASURY: On 
February 5, the House of Representatives returned N2.1 billion ($14 
million) unspent funds from 2008 allocations to the treasury. 
During the day's session, the Speaker tendered documents from the 
Accountant General of the Federation acknowledging that the money 
was deposited in the treasury. 
 
¶6. (U) TWENTY INJURED IN CLASH FOLLOWING GOVERNOR'S MOTORCADE: Press 
reported 20 people were injured in a clash between youth and 
supporters of the Kano State governor, Malam Ibrahim Shekarau on 
February 7.  Shekarau's supporters were reportedly following the 
Governor's vehicle to a wedding.  Several youths reportedly began 
shouting disparaging remarks at the Governor as the convoy passed. 
 
ABUJA 00000316  002 OF 004 
 
 
Supporters in several vehicles to the rear of the convoy reportedly 
stopped and began fighting with the youths.  Press reports Kano 
police command denied knowledge of the incident. 
 
¶7. (U) INSPECTOR GENERAL OF POLICE OKIRO TO RETIRE: Press reported 
Inspector-General of Police, Mike Okiro, is expected to retire on 
July 24.  Okiro will be 60 years old, having served 32 years in the 
police.  He is expected to start take leave starting on April 24, 
three months before his expected departure from office.  By law, 
public officers in Nigeria are expected to retire after 35 years in 
service or after attaining 60 years of age. 
 
¶8. (U) PRESIDENT CUTS SALARIES OF POLITICAL APPOINTEES:  The 
National Economic Council (NEC), the umbrella body for the governors 
of the 36 states and the nation's economic managers endorsed the 
salary cut proposed by President Umaru Musa Yar'Adua for all 
political appointees in the country on February 10.  Yar'Adua called 
the current remunerations for political office holders in the 
country "untenable and unjustifiable in the present circumstances." 
On February 11, local press published excerpts from a February 10 
letter from President Yar'Adua to the Chairman of the Revenue 
Mobilisation and Allocation and Fiscal Commission (RMAFC), in which 
he stated, "I wish to observe that like other nations, our country 
has suddenly found itself a victim of the current global financial 
meltdown and unprecedented economic crises".  The RMAFC is 
constitutionally charged reviewing salaries of political 
appointees. 
 
AGRICULTURE 
----------- 
 
¶9. (U) CASSAVA OUTPUT IN NIGERIA EXPECTED TO RISE: Cassava output is 
expected to rise 30% with the help of $5.3 million from USAID to 
fund cassava production in Nigeria and six other African countries 
(DR Congo, Ghana, Malawi, Mozambique, Sierra Leone and Tanzania). 
The objectives of the project include mass propagation of improved 
varieties of cassava with on-farm yield potential 30% greater than 
those of existing varieties; promotion of farm gate processing to 
increase the shelf life of cassava;  and farmer capacity building in 
improved cassava production techniques. 
 
¶10. (U) USG TO HELP NIGERIA BECOME RICE EXPORTER: On February 12 in 
Benue State, the Ambassador attended a USAID Public-Private 
Partnership agriculture program as part of American National Week. 
The collaboration between the U.S. government and Olam Nigeria 
Limited Agricultural Partnership Development Program is a positive 
step aimed at improving rice production in the country with the goal 
of making Nigeria a net exporter of rice.  The USG is providing 
technical assistance for the Benue State government to enable it 
take advantage of the Africa Growth and Opportunities Act (AGOA). 
Nigeria is the largest importer of rice in Africa and the second 
largest importer globally. 
 
¶11. (U) PATH TO NIGERIA'S FOOD SECURITY: On February 12 USAID 
consultants identified agricultural biotechnology as a major route 
to Nigeria's food security and are leading a campaign to promote 
agricultural biotechnology in Nigeria in ensuring food security and 
wealth creation.  The USG supports a bio-safety bill in the National 
Assembly that would ensure that biotechnology is used in a safe and 
responsible manner. 
 
ENVIRONMENT AND HEALTH 
---------------------- 
 
¶12. (U) NIGERIA TIGHTENS IMPORT RULES:  The National Agency for 
Food, Drug Administration and Control (NAFDAC) announced on February 
12 that Nigeria implemented tighter controls on chemical imports 
from India and China after 84 children died and another 111 became 
ill from teething syrup contaminated with diethylene glycol.  NAFDAC 
arrested 12 Nigerians involved in manufacturing and marketing the 
 
ABUJA 00000316  003 OF 004 
 
 
toxic chemical.  To prevent future incidents, NAFDAC said all 
propylene glycol imports must now be re-certified by the agency's 
independent analysts in India and China before shipment. 
 
¶13. (U) 26 STATES RISK OUTBREAK OF MENINGITIS IN 2009:  On February 
12 the Minister of State for Health disclosed that the 
cerebro-spinal meningitis (CSM) epidemic had spread from 19 Northern 
states into the southern states of Oyo, Ebonyi, Enugu, Imo, Anambra 
and Cross River State.  The Minister appealed to state governments 
to support their state ministries of health to check the impending 
outbreak effectively.  He added that the nation was "sitting on the 
keg of gunpowder waiting to explode." 
 
¶14. (U) NORWAY GIVES $50M FOR MATERNAL HEALTH:  The Norwegian Deputy 
Foreign Affairs Minister announced on February 11 that his country 
contributed $50 million to Nigeria to address health related 
problems.  The goal of the initiative was to improve maternal, 
newborn and child health in Northern Nigeria by providing quality 
service to Maternal and New born Child Health in Jigawa, Katsina, 
Yobe, and Zamfara states.  He commended the establishment of the 
National Health Insurance Scheme (NIHS) to address health problems 
in the country and urged the government to give priority attention 
to women's right to health. 
 
CORRUPTION AND CRIME 
-------------------- 
 
¶15. (U) FORMER GOVERNOR'S WIFE ARRESTED BY EFCC:  The Economic and 
Financial Crimes Commission (EFCC) arrested Tinu Ladoja, wife of a 
former Governor of Oyo State Rashidi Ladoja, on February 7 for 
operating a wonder bank (a Nigerian pyramid scheme).  She was 
accused of collecting over N100 million ($680,000) from customers 
without offering required services. 
 
¶16. (U) FIFTEEN NIGERIAN TRAFFICKERS ARRESTED IN HOLLAND:  The 
National Agency for the Prohibition of Trafficking in Persons 
(NAPTIP) cooperated with Netherlands' authorities in the arrest of 
15 Nigerians engaged in the trafficking in persons in Holland.  Two 
Ghanaians were also arrested in an operation tagged "Koolvis." The 
trial of the 15 Nigerians and two Ghanaians is expected to come up 
in district court in Zwollel Town located in northern part of 
Holland in May.  The arrests were attributed to a crackdown on 
trafficking, which has the support and active participation of 
International Police (INTERPOL), Italian Anti-Mafias Bureau, 
Belgium, Spanish and the Royal Dutch anti- trafficking departments, 
and was spearheaded by NAPTIP. 
 
OIL, GAS, AND POWER 
------------------- 
 
¶17. (U) OIL UNIONS POSTPONE STRIKE THREAT:  On February 11, 
Nigeria's oil labor unions, NUPENG and PENGASSAN called off a 
threatened strike over what they claimed were concerns about 
deteriorating security in the Niger Delta.  While Nigerian employees 
of international oil companies bear the brunt of attacks and 
kidnappings in the Niger Delta (incidents which do not usually 
attract the attention of the international press), both unions are 
also in the middle of regularly scheduled contract negotiations with 
the oil companies.  The unions gave a 21 day ultimatum for their 
security concerns to be addressed. 
 
¶18. (SBU) SHELL DECLARES FORCE MAJEURE:  On February 10 Shell 
declared force majeure on February loadings from the Bonny Island 
export terminal in Rivers State.  March loadings may also be 
impacted.  On January 8, Shell had lifted force majeures declared in 
July and October 2008 for exports from several terminals, including 
Bonny. 
 
¶19. (U) JTF IMPOUNDS OIL THEFT BARGES:  On February 12, the press 
reported that the JTF had impounded 22 barges filled with stolen 
 
ABUJA 00000316  004 OF 004 
 
 
crude oil.  According to a JTF spokesmen, the barges, located in 
Delta State were apparently waiting for a deep-water vessel to come 
and take their cargoes. 
 
DELTA INCIDENTS; NO AMCITS INVOLVED 
----------------------------------- 
 
¶20. (U) The press reported that a wife of the former Minister of 
Petroleum had been kidnapped in Port Harcourt on February 3.  She 
was released on February 6 after payment of a ransom.  MEND, which 
did not take credit for the kidnapping, claimed that the hostage 
takers had threatened to gang rape their victim daily until the 
ransom was paid.  If true, this would be an escalation of the 
brutality associated with kidnappings. 
 
¶21. (U) According to local press reports, on February 3, a Rivers 
State Electoral Commissioner was kidnapped.  No further information 
on his status is available. 
 
¶22. (U) On February 5 a vessel providing security to an off-shore 
oil platform was reportedly attacked by armed men.  The Nigerian 
captain was killed and one Nigerian crewman was injured in the 
attack.  No hostages were taken. 
 
¶23. (U) Shell's Utogoru natural gas plant in Delta State was damaged 
in an attack on February 7.  A spokesman for MEND claimed 
responsibility for the attack.  According to Shell one employee and 
one contractor were killed. 
 
¶24. (U) On February 7, the local press reported that 60 gunmen 
invaded the Obele community in Rivers State, abducting eight people 
and destroying several homes, including that of the traditional 
ruler.  An unidentified number of people were injured in the 
attack. 
 
¶25. (U) On February 8, according to press accounts, a construction 
site for a road project financed by the Ondo State Oil Producing 
Areas Development Commission was attacked by about 50 gunmen who 
seized one hostage, a Portuguese construction worker. 
 
SANDERS