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Viewing cable 09ABUJA1540, NIGERIA: POL-ECON GRAB BAG

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Reference ID Created Released Classification Origin
09ABUJA1540 2009-08-21 15:17 2011-08-24 16:30 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Abuja
VZCZCXRO8386
PP RUEHMA RUEHPA
DE RUEHUJA #1540/01 2331517
ZNR UUUUU ZZH
P 211517Z AUG 09
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 6854
INFO RUEHZK/ECOWAS COLLECTIVE
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 001540 
 
SENSITIVE 
SIPDIS 
 
DEPT PASS TO USAID FOR AFR/ATWOOD 
DEPT PASS USTR-AGAMA 
DOE FOR GPERSON, CHAYLOCK 
TREASURY FOR PETERS AND IERONIMO 
LABOR FOR SHALEY 
USDA/FAS/OTP FOR MCKENZIE 
 
E.O. 12958:  N/A 
TAGS: PGOV ECON EIND ELAB EPET NI IZ
SUBJECT:  NIGERIA:  POL-ECON GRAB BAG 
 
Ref:  A) ABUJA 1377, B) ABUJA 1270 
 
1. (U) Mission Nigeria provides the following compilation of recent 
political and economic developments not reported elsewhere. 
 
-------------------------------------------- 
DANGOTE ELECTED NEW STOCK EXCHANGE PRESIDENT 
-------------------------------------------- 
 
2. (SBU) Aliko Dangote gained unanimous election August 6 as 
President and Chairman of the Council of the Nigerian Stock Exchange 
(NSE) for a three-year term.  Dangote, a prominent northern 
businessman and ally of President Yar'Adua, replaced prominent 
western businessman Oba Otudeko.  Southerner Reginald Abbey-Hart and 
Westerner Erastus Akingbola gained election as First and Second Vice 
Presidents under the Council's rotating leadership system.  Bismarck 
Rewane of Financial Derivatives predicted a tightening of market 
operations and regulations under the new chairman, which could boost 
investors' confidence.  While Dangote listed transparency and 
improved governance and liquidity as priorities, the Central Bank of 
Nigeria subsequently identified him as among individuals defaulting 
on loans to troubled local banks. 
 
--------------------------------------------- ------- 
NIGERIA IMPLEMENTS NEW MULTI-YEAR ELECTRICITY TARIFF 
--------------------------------------------- ------- 
 
3. (U) Under a new Multi-Year Tariff Order (MYTO)implemented in 
July, Nigeria created a rate structure to capture the full cost of 
delivering electricity, facilitating transition to a more efficient 
and reliable market-oriented power supply system.  The MYTO will 
permit a yearly review and adjustment of prices, if material 
variations (five percent or more) occur in the inflation rate, 
exchange rate, and cost of gas.  According to the Electricity 
Regulatory Commission, a three-year, one-billion-dollar federal 
government subsidy will protect consumers by covering the difference 
between the old fixed rate and the new market-driven rate.  The new 
rate is intended to generate funds for salaries, maintenance, 
repair, and investment in the power sector. 
 
---------------------------------------- 
LIGHT-UP-NIGERIA PLANNING OCTOBER EVENTS 
---------------------------------------- 
 
4. (U) Young professional Nigerians fed up with insufficient 
electrical power in their country started the Light-Up-Nigeria 
social movement in July on social media networks Facebook and 
Twitter.  Members of the group, which now numbers 17,000 users 
inside and outside Nigeria, told Econoff August 18 of plans to host 
events in Abuja, Lagos, London, and possibly the U.S. on Nigeria's 
Independence Day (October 1).  As part of efforts to garner support, 
Light-Up-Nigeria will produce a theme song and promotional 
materials.  They hope to transform October 1 into a type of Live Aid 
event for electrical power in Nigeria. 
 
-------------------------------------------- 
CUSTOMS SERVICE GETS NEW COMPTROLLER GENERAL 
-------------------------------------------- 
 
5. (U) Assistant Comptroller General Abdullahi Dikko replaced 
Bernard-Shaw Nwadialo as the new Comptroller-General of the Nigerian 
Customs Service on August 17.  The press characterized Dikko as a 
good manager who will promote his agency's growth and welfare.  U.S. 
Congresswoman Sheila Jackson-Lee paid a courtesy call on him during 
her visit to Nigeria (SEPTEL). 
 
------------------------------------- 
ALLEGED TAX EVASION IN MUSIC BUSINESS 
------------------------------------- 
 
6. (SBU) Performing Musicians Association of Nigeria (PMAN) 
President Tee-Mac accused foreign musicians entering Nigeria on 
tourist visas of depriving the GON of tax revenue from their 
performances.  Tee-Mac claimed to Econoff August 10 that, while all 
foreign artists performing in Nigeria must pay 25 percent of their 
 
ABUJA 00001540  002 OF 004 
 
 
earnings in taxes, the GON did not enforce this provision.  He said 
Nigerian music promoters launder money by deliberately inflating 
costs of performances, transferring the inflated amounts to 
performers' accounts overseas, and then crediting their accounts 
with the excess amounts. 
 
------------------------------------------- 
COUNTERFEIT CARTRIDGES CAUSE TROUBLE FOR HP 
------------------------------------------- 
 
7. (SBU) Hewlett Packard's Anti-Counterfeiting Team Leader for 
Europe and Africa, Lukas Drlik, claimed to ECONOFF August 7 that the 
Nigerian Police Inspector General was behind an illicit business in 
Lagos that produced counterfeit toner and print cartridges. 
According to Drlik, HP has lost 10 million dollars yearly in 
counterfeit toner sales in Nigeria.  He described the mark-up on 
genuine toners in Nigeria as more lucrative than for drugs, as one 
can buy cartridges in Dubai for 15 dollars and sell them here for 
100 dollars.  This margin encouraged counterfeiters, including some 
authorized HP distributors, to produce fake toners for one dollar 
and sell them for 100 dollars.  Consulate Lagos is working with HP 
and the Nigerian Standards Organization to protect HP's rights. 
 
------------------------------------------ 
VIRGIN NIGERIA TO FOCUS ON REGIONAL MARKET 
------------------------------------------ 
 
8. (SBU) Virgin Nigeria (VN) Chief Executive Officer Captain Dapo 
Olumide said his company planned to reinvent itself as a Pan-African 
airline by focusing on regional markets and recruiting pilots and 
crew from African destinations.  The airline will focus on routes 
between Nigeria and other African countries, such as Ghana, Senegal, 
Ivory Coast, and Togo.  VN recently acquired two new Brazilian 
Embraer jets and planned to purchase 14 more to improve cost 
efficiency on local and regional routes.  Olumide lamented increases 
in Nigeria's airport fees, which discouraged air traffic, while 
other countries lowered theirs.  VN wanted to establish a 
maintenance base in the region, but not necessarily in Nigeria.  In 
January, VN announced suspension of long-haul flights to London and 
Johannesburg and, instead, introduced flights to Senegal and 
Gambia. 
 
---------------------------- 
MOST OIL PRODUCTION OFFSHORE 
---------------------------- 
 
9. (SBU) Coleman McDonough of Hercules Offshore told Econoff August 
10 that Nigeria's oil production had fallen to one million barrels 
per day (bpd).  He said Exxon Mobil, with production of 700,000 bpd 
(including 200,000 from the Erha field alone) accounted for almost 
three-quarters of Nigeria's production.  McDonough said that most, 
if not all, production now came from off-shore fields.  He claimed 
that Shell and Chevron had almost totally shut down production in 
the Delta. 
 
------------------------------------ 
SCHOOLS DAMAGED IN BOKO HARAM CRISIS 
------------------------------------ 
 
10. (U) The Boko-Haram crisis in Borno state (Ref A) reportedly 
affected two schools benefiting from the Ambassador's Girls' 
Scholarship Program (AGSP).  Fire destroyed these schools, one of 
which the Ambassador visited earlier this year to meet with AGSP 
scholars and distribute books (Ref B).  The circumstances of the 
fires remained unknown. 
 
----------------------------------------- 
ANAMBRA PDP EXECUTIVE COMMITTEE DISSOLVED 
------------------------------------------ 
 
11. (U) Peoples' Democratic Party (PDP) stakeholders in the South 
East formally dissolved the party's Anambra State Executive 
Committee August 18, after a long-standing battle over party control 
that produced intra-party disputes.  Stakeholders called for new 
elections at ward, local, and state levels to select new executive 
 
ABUJA 00001540  003 OF 004 
 
 
councils to run party affairs.  Anambra state journalist Fred Okoni 
told PolSpec that, with all three PDP factions vying for control, 
dissolution of one powerful faction would not likely resolve the 
power tussle.  One faction, however, may team up with Governor Peter 
Obi (APGA) in the gubernatorial election in early 2010. 
 
-------------------------------------- 
ASUU PRESIDENT DESCRIBES PAY DISPARITY 
-------------------------------------- 
 
12. (U) Academic Staff Union of Universities (ASUU) President 
Ukachukwu Awuzie publicly condemned a GON threat to institute a 
"no-work, no-pay" rule after nearly two months of strikes by 
university teachers across Nigeria.  Awuzie insisted August 18 that 
the union would not allow the issue of lost pay to dampen members' 
desire to seek fundamental changes in Nigeria's educational system. 
Awuzie described the disparity in wages between professors and those 
in the federal government opposing ASUU's actions.  He explained 
that the present salary of a professor at Nigerian universities 
amounted to about 3,859,078 naira annually (about 24,423 U.S. 
dollars), while a local government chairman earned 13.9 million 
naira (about 87,975 dollars), and a permanent secretary, executive 
secretary, parastatal chief executive, and vice chancellor earned 
about 22 million naira (about 139,241 dollars) per year.  In 
comparison, a Federal High Court Judge earned 26,875,840 naira 
(170,100 dollars), a Federal House Member 35,932,346 naira (227,420 
dollars), and a Senator 36,677,840 naira (about 232,138 dollars) 
yearly.  After an August 10 meeting of the union's National 
Executive Council Awuzie said, "It is sad to note that although we 
were invited to resume the renegotiations with the GON on August 3, 
we have spent the first week without achieving anything." 
 
-------------------------------- 
BAYELSA STATE AND USAID SIGN MOU 
-------------------------------- 
 
13. (U) USAID-Nigeria signed a Memorandum of Understanding (MOU) 
with the Executive Governor of Bayelsa State August 13 to strengthen 
the capacity of key government branches, in the first instance in 
which a Nigerian state has transferred resources to the USG to 
improve the capacities of state and local institutions.  The project 
will equip government officials to enact and implement Bayelsa's 
2009 Public Procurement Bill and pending fiscal responsibility 
legislation; enhance the ability of the Due Process and e-Governance 
Bureau, the Central Tender Board, and the Procurement Departments in 
various ministries, departments and agencies to implement public 
procurement legislation and apply procurement best practices; and 
build the capacity of legislators and permanent staff of the House 
of Assembly to fulfill their legislative roles.  USAID-Nigeria will 
also help establish a Budget and Procurement Research Office in the 
legislature to further promote transparency and accountability. 
 
----------------------- 
DFID AND USAID SIGN MOU 
----------------------- 
 
14. (U) USAID-Nigeria and the United Kingdom's Department for 
International Development (DFID) signed an MPU formalizing a 
partnership to implement the Nigeria Education Data Survey (NEDS) 
2009.  NEDS encompasses a nationwide household survey to gather and 
analyze data on schools and other education and training institutes 
in the country.  The survey will provide strategic information for 
the Federal and State Ministries of Education and development 
partners in Nigeria.  USAID will provide 1.1 million dollars for the 
survey, matched by a 1.5 million dollar contribution from DFID. 
 
USAID SUPPORT FOR EXPANDED MAIZE MARKET 
 
15. (U) USAID-Nigeria's Maximizing Agricultural Revenues and Key 
Enterprises in Target Sites (MARKETS) project formed a new alliance 
with Nigerian private sector firm Grand Cereals to increase 
productivity and expand markets for maize.  Grand Cereals will help 
farmers achieve greater maize yields using MARKETS on-farm and seed 
technologies.  Grand Cereals is the largest maize processor in 
Northern Nigeria, buying 65,000 metric tons of grain from farmers 
 
ABUJA 00001540  004 OF 004 
 
 
annually.  Project officials plan to address constraints from 
limited maize storage capacities and increase yields from 1.5 metric 
tons per hectare to more than 2 metric tons per hectare.  The 
project is working with Grand Cereals through the United Bank for 
Africa (UBA) to access three billion naira (about 19 million 
dollars) for processing expansion, storage facility construction, 
and working capital in the sorghum sector. 
 
------------------------------------------ 
2008 DEMOGRAPHIC AND HEALTH SURVEY RESULTS 
------------------------------------------ 
 
16. (U) The Nigerian National Population Commission Chairperson and 
USAID-Nigeria Mission Director presented preliminary results from 
the 2008 Demographic and Health Survey (DHS) to First Lady Hajiya 
Turai Umaru Yar'Adua on August 11.  While USAID provided most 
funding, the UNFPA covered some local costs.  The presentation 
included a summary of key findings and areas of improvement since 
the 2003 survey.  The 2008 survey collected data from a 
nationally-representative sample of about 48,000 men and women 
between the ages of 15 and 59 and offered, for the first time, data 
disaggregated by state for most indicators and the ability to gauge 
a maternal mortality ratio. 
 
MCCULLOUGH