VZCZCXRO3396
PP RUEHMA RUEHPA
DE RUEHUJA #1412/01 2151400
ZNR UUUUU ZZH
P 031400Z AUG 09
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 6720
INFO RUEHOS/AMCONSUL LAGOS 1766
RUEHJO/AMCONSUL JOHANNESBURG 0074
RUEHZK/ECOWAS COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 02 ABUJA 001412 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS AID AFR/SD FOR CURTIS, ATWOOD AND SCHLAGENHAUF 
DEPT PASS TO USTDA-PAUL MARIN, EXIM-JRICHTER 
DEPT PASS TO USTR-AGAMA 
JOHANNESBURG FOR NAGY 
USDOE FOR GEORGE PERSON 
TREASURY FOR PETERS AND IERONIMO 
DOC FOR 3317/ITA/OA/BURRESS AND 3130/USFC/OIO/ANESA/REED 
 
E.O. 12958: N/A 
TAGS: EFIN EPET ECON SENV PREL ENRG PGOV ELAB NI
SUBJECT: NIGERIA: TREASURY DELEGATION MEETS WITH GON AND NGOS 
 
REF: A) ABUJA 1139 
 B) ABUJA 1290 
 
ABUJA 00001412  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY. 
 
¶1. (SBU) Summary:  Treasury Senior Advisor Ian Solomon and Senior 
G-20 Policy Advisor Robin Ritterhoff visited Abuja from July 12-15 
to meet with the Governor of the Central Bank of Nigeria, the 
Minister of State for Finance, representatives of the Nigerian 
Extractive Industries Transparency Initiative (NEITI), 
non-governmental organizations, the Country Director for the World 
Bank, and farmers.  The CBN Governor thanked Treasury for its 
engagement with the CBN and expressed his hope that Treasury will 
maintain a position of confidence in Nigeria's banking system.  The 
Minister of State for Finance emphasized the need for additional 
funding for education and health, while the NEITI stated that its 
2005 audit report on the oil and gas sector has not yet been 
released.  The World Bank Country Director gave the delegation an 
overview of the Bank's role in Nigeria.  Representatives of civil 
society organizations stressed the need for financial and capacity 
building assistance to strengthen their work and role in Nigeria's 
extractive industry.  End Summary. 
 
Central Bank 
------------ 
 
¶2. (SBU) Accompanied by the Ambassador, EconOff and Econ Specialist, 
Senior Advisor to Treasury Secretary Timothy Geithner, Ian Solomon, 
and Senior Policy Advisor on G-20, Robin Ritterhoff, met briefly 
with the Governor of the Central Bank of Nigeria Lamido Sanusi.  The 
delegation inquired about changes the Governor has made since he 
became Governor in June and about the general health of the banking 
sector.  As he did earlier (ref B), Sanusi discussed audits being 
conducted to determine the financial health of banks.  He did not, 
he said, foresee a systematic crisis in the banking sector, but 
wants banks to present their true financial position to the public. 
He is aware of the risk of a loss of confidence by international 
banks, and noted that they take their signals from the views of the 
U.S.  Sanusi thanked Treasury for its engagement with the CBN and 
expressed his hope that the U.S. will maintain a position of 
confidence in Nigeria's banking system.  He indicated that they 
would appreciate technical assistance and capacity building support 
from Treasury (Note:  The Ambassador, on July 24, transmitted a 
letter from Treasury containing an offer of technical assistance to 
deal with problems related to the global financial crisis.  End 
Note). 
 
¶3. (SBU) Sanusi and his staff indicated that the results of the 
re-launched Wholesale Dutch Auction process were positive.  (Note: 
the Wholesale Auction was suspended in January due to foreign 
currency supply shortage and reintroduced on July 13.  End Note). 
Sanusi believes the auctions will provide some exchange rate 
stability, which together with the downward trend on inflation 
should help rebuild confidence.  Also, at the meeting the Governor 
confirmed to the Ambassador his attendance of the AGOA Forum, 
scheduled for August 4-6 in Nairobi. 
 
Minister of State for Finance 
----------------------------- 
 
¶4. (SBU) Accompanied by EconOff and Econ Specialist, the delegation 
met with the Minister of State for Finance, Aderemi Babalola, to 
discuss the general health of the Nigerian economy.  Babalola 
touched on many issues, including the affects of the global 
financial crisis on Nigeria and the need for increased expenditure 
in the health and education sectors. 
 
¶5. (SBU) With regard to the global financial crisis, he stated that 
Nigeria was not affected as much as other countries, but that 
Nigeria would have been in a tremendous trouble if the crisis had 
occurred 6-7 years ago since the banks were weak before the 2004-05 
consolidation. 
 
NEITI 
----- 
 
¶6. (SBU) The delegation met with the leadership of the Nigerian 
 
ABUJA 00001412  002.2 OF 002 
 
 
Extractive Industries Transparency Initiative (NEITI), accompanied 
by EconOff and Econ Intern.  NEITI is mandated by law to promote 
transparency and accountability in the management of Nigeria's oil, 
gas and mining revenues.   NEITI Chairman Professor Humphrey Asobie 
thanked the USG, especially USAID, for the support it has provided 
his organization.  Solomon congratulated Asobie on the NEITI's 
accomplishments to-date and asked the status of the 2005 audit 
report.  Asobie reported that the report has been completed; 
however, it will not be released until it is presented to the 
Federal Executive Council (FEC) and approved by the National 
Assembly.  He expressed concern over the lack of leadership and 
commitment toward revenue transparency in the National Assembly and 
that bickering in the National Assembly might bog down the approval 
and release of the 2005 audit. 
 
¶7. (SBU) Asobie expressed distress over the delay in the submission 
of the 2005 audit report, which they attributed to the slow start of 
their organization (2004) due to lack of funding.  Asobie said that 
the 2006, 2007, and 2008 audits will be completed together, and the 
contract for the audit work, expected to cost $3 million, will be 
award within a few weeks.  Funding, he said, is a constant challenge 
that bears on the NEITI's ability to hire more professional staff to 
conduct audits in a timely manner.  NEITI officials would be 
receiving World Bank funding to look into the mining sector.  Asobie 
maintained that the three new regulatory agencies proposed in the 
Petroleum Industry Bill should facilitate NEITI's job since they 
would have oversight responsibilities on oil and gas revenues. 
 
Civil Society Organizations 
--------------------------- 
 
¶8. (SBU) The U.S. delegation held an informal discussion with four 
civil society organizations:  Transparency in Nigeria (national 
chapter of Transparency International), Civil Society Legislative 
Advocacy Center, Zero-Corruption Coalition, and Publish What You Pay 
Nigeria.  Asked about progress and challenges facing civil society 
organizations, the attendees cited lack of funding and institutional 
capacity. 
 
World Bank 
---------- 
 
¶9. (SBU) World Bank Country Director Ohno Ruhl stated that the Bank 
will be coming out with its new country strategy soon.  Regarding 
food security, the Bank is scaling up its agricultural projects, 
specifically in the area of commercial agriculture, but is 
challenged by the lack of consistent GON agricultural policies. 
 
Farmers 
-------- 
 
¶10. (SBU) The U.S. delegation visited a farm sponsored by the Gates 
Foundation within the Federal Capital Territory (FTC).  Local 
farmers and agro-businesses work with the International Institute 
for Tropical Agriculture (IITA) on finding the best way to increase 
crop production and improve the quality of seeds.  These farmers are 
eager for drought resistant crops, particularly maize, as it is the 
most successful crop in all ecological zones of the country.  The 
farmers noted their perennial problems of persistent drought, weed 
infestation, pesticide prices, and fertilizer shortages. 
 
¶11. (U) This cable was coordinated with Consulate Lagos. 
 
SANDERS