VZCZCXRO3997
PP RUEHMA RUEHPA
DE RUEHUJA #0666/01 1101041
ZNR UUUUU ZZH
P 201041Z APR 09
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 5776
INFO RUEHOS/AMCONSUL LAGOS PRIORITY 1151
RUEHGB/AMEMBASSY BAGHDAD 0201
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 ABUJA 000666 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS TO USTR-AGAMA 
DEPT PASS USAID AFR/SD FOR CURTIS AND ATWOOD 
BAGHDAD FOR DUNDAS MCCULLOUGH 
TREASURY FOR PETERS, IERONIMO AND HALL 
DOC FOR 3317/ITA/OA/KBURRESS AND 3130/USFC/OIO/ANESA/CREED 
DOE FOR PERSON, HAYLOCK AND SPERL 
USDA FOR FAS/OTP MCKENZIE 
 
E.O. 12598: N/A 
TAGS: ECON ENRG CVIS EINV EAGR EAID PGOV NI
SUBJECT: NIGERIA: KADUNA PRIVATE SECTOR SEEKS US INVESTMENT 
 
REF: ABUJA 549 
 
 
¶1. (SBU) Summary.  During a March 5-6 visit to Kaduna by EconDeputy, 
Kaduna Chapter Members of the Nigeria-American Chamber of Commerce 
(NACC) were unanimous in their displeasure with the Yar'Adua 
administration's inability to increase electricity supply.  They 
complained that epileptic electricity supply severely hampers 
business activity and industrial growth.  Kaduna Chamber of 
Commerce, Industry, Mines and Agriculture (KADCCIMA) officials 
lamented the "dismal" level of U.S. company interest in investing in 
Kaduna State, despite their contention that Kaduna has a much more 
favorable business climate than Lagos or Kano.  Various 
interlocutors stated over and over that companies from China, India, 
Malaysia and Indonesia were far more involved in the area, 
supporting more trade missions and streamlining visa procedures. 
End Summary. 
 
¶2. (U) EconDeputy and Econ Specialist met with a wide range of 
northern private sector business leaders March 5-6 to discuss the 
business climate in Kaduna State.  They also attended the opening of 
30th annual Kaduna International Trade Fair, which was organized by 
KADCCIMA. 
. 
DISAPPOINTMENT WITH THE PRESIDENT 
--------------------------------- 
. 
¶3. (SBU) During a roundtable discussion with members of the Nigeria- 
American Chamber of Commerce, Alhaji Ibrahim Usman, Managing 
Director of Powerseal Nigeria, complained that the Yar'Adua 
administration has failed to manage the nation's electricity crisis. 
 (Note:  Usman was vice presidential candidate on the African 
Democratic Congress (ADC) ticket of Professor Pat Utomi during the 
April 2007 Nigerian presidential election.  Usman also attended the 
PowerGen convention in Orlando, Florida in December 2008 at the 
invitation of the U.S. Commercial Service.  End Note.)  He further 
lamented the recent "unjust removal" of Engineer Bello Suleiman, 
former Executive Vice Chairman of the Power Holding Company of 
Nigeria (PHCN).  Usman asserted that Suleiman's removal was a 
deliberate political action, "without reason", and will only serve 
to further weaken the nation's power sector.  He commended Suleiman 
for his systematic approach and vision to reform the power sector. 
(Comment:  The media reported Minister of Power Babalola removed 
Suleiman in March because of internal political struggles.  Suleiman 
previously served as Minister of Power and Steel during the 
transitional government of General Abdulsalami Abubakar from June 
1998 to May 1999, as well as Managing Director of the defunct 
National Electric Power Authority from 1999 - 2001.  These tenures 
were marked by no notable achievements.  End Comment.) 
 
¶4. (SBU) Usman and other members stressed that Kaduna state was 
experiencing low industrial growth as a direct result of epileptic 
electricity supply that restricts manufacturing operations.  The 
businessmen lamented that operating companies on generator power was 
extremely expensive due to high fuel costs for generator fuel. 
 
¶5. (SBU) A major complaint expressed by NACC members was that U.S. 
nonimmigrant visa processing was too "cumbersome" and "arbitrary" 
and harmed opportunities for U.S. exports to Nigeria.  Businessmen 
contrasted what they considered "friendly" and "reasonable" 
procedures for Asian countries with the long waits for appointments 
and opaque decision making process by U.S. Consular Officers.  Also 
mentioned was that businessmen with Muslim names often faced 
"further processing," which made it impossible for them to travel in 
a timely manner. 
 
¶6. (SBU) At a dinner organized by the NACC, retired politician 
Alhaji Umaru Dikko told EconDeputy that the economy's dependence on 
oil revenues was a disaster.  He said Nigeria was blessed with 
enormous agriculture potential that could be harnessed to boost 
agro-production and eradicate poverty.  When asked in what direction 
the country was going under the Yar'Adua administration, Dikko said 
he was not optimistic that it was the "right" direction.  (Comment: 
Dikko is former politician who was a trusted adviser to President 
Shehu Shagari.  End Comment.) 
. 
KADCCIMA 
 
ABUJA 00000666  002 OF 002 
 
 
-------- 
. 
¶7. (SBU) The Kaduna Chamber of Commerce, Industry, Mines and 
Agriculture (KADCCIMA) organizes the annual Kaduna trade fair and is 
the most prominent business association in Kaduna State.  KADCCIMA 
was established in 1973 to provide a network of national and 
international business contacts and opportunities through trade 
fairs and promoting the private sector. Alhaji Usman Garba Saulauwa, 
Secretary General of KADCCIMA, lamented the lack of interest in 
investing in Kaduna on the part of U.S. companies.  He stated that 
KADCCIMA had trade partnerships and exchange visits with Asian 
countries such as China, India, Indonesia, Malaysia, Taiwan and 
Singapore, but U.S. companies were simply not engaging with the 
Chamber.  EconDep responded that the major barrier to U.S. 
investment in Kaduna was the lack of infrastructure.  The unreliable 
electricity supply and poor transportation infrastructure makes 
Kaduna less attractive than Lagos for U.S. investment. 
 
¶8. (SBU) Saulauwa asserted that Kaduna is a better place for foreign 
investment than Kano, Lagos or other Nigerian cities.  He maintained 
that Kaduna State had a favorable business climate, and the fact 
that the city served as "an administrative seat" to the 19 Northern 
states makes it a favorable choice for logistical reasons.  Saulauwa 
added that Kaduna State was blessed with a highly educated and 
skilled workforce, costs of doing business were low, business 
culture was "favorable" and crime was low.  He cited the World Bank 
2008 report on "Doing Business in Nigeria", which chose Kaduna State 
as the "best place for doing business." (Note: The four indicators 
used in the World Bank report were: costs associated with starting a 
business; the number of procedures required to attain a construction 
license; the number of procedures required to register property; and 
the efficiency of the legal system in enforcing contracts.  End 
Note).  Saulauwa complained that the closure of the former Kaduna 
United States Information Service office (USIS) in 1997 was a 
mistake, adding that the USG should "move back to Kaduna" to 
re-build social and economic ties to the city. 
. 
30th Kaduna International Trade fair 
----------------------------------- 
. 
¶9. (SBU) The 2009 theme of the Kaduna trade fair was "Energizing 
Industry and Agriculture for National Development."  EconDeputy and 
Econ Specialist at the fair observed that the vast majority of 
products were manufactured in China with only a few U.S. products 
sprinkled in, most notably cosmetics.  Businessmen reported a low 
turnout of exhibitors at the trade fair, attributing it to the 
downturn in the local economy.  Exhibitors reported more businesses 
were closing in Kaduna because of poor electricity supplies, port 
congestion in Lagos that delays imports and exports and the high 
transportation costs from Kaduna to other parts of the country. 
. 
Comment 
------- 
. 
¶10. (SBU) EconDeputy heard from numerous interlocutors that 
businesses in Kaduna were suffering and that company closures were 
on the rise.  A combination of too little electricity, high 
transportation costs and the national and global economic downturn 
were taking their toll.  The remaining businesses are eager for 
foreign investment and wish to partner with U.S. companies, but 
don't see U.S. companies showing much interest in the area - likely 
for the same reasons businesses already in Kaduna were closing.  For 
now, Kaduna businessmen are focusing on attracting Asian investors 
to grow the economy. 
 
¶11. (U) This cable was coordinated with ConGen Lagos. 
 
SANDERS