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Cablegate: Nigeria: Pol/Econ Updates for December 2007

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UNCLAS SECTION 01 OF 05 ABUJA 000023

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STATE FOR AF/W, INR/AA
DOE FOR CAROLYN GAY

E.O. 12958: N/A
TAGS: PGOV PHUM PINR PREL KDEM KCOR KJUS NI
SUBJECT: NIGERIA: POL/ECON UPDATES FOR DECEMBER 2007

THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET
DISTRIBUTION.

-------------------
2007 YEAR IN REVIEW
---------------
1. (SBU) SUMMARY: Nigeria's fragile democracy continues to
face several challenges. Domestic and international
observers assessed the April elections, which brought
President Umaru Yar'Adua (of the People's Democratic Party,
PDP) to power as marred by gross irregularities, intimidation
of voters, and violence. Over 1,200 petitions challenging
the electoral results of the state, gubernatorial, and
presidential elections were filed at election tribunals in
June; four gubernatorial elections have been overturned.
Progress on rule of law and anti-corruption efforts,
including investigations of several former governors, remains
lukewarm. Post will report septel an assessment of
Yar'Adua's six months in office and an analysis of the
(on-going) Presidential Election Tribunal.

2. (U) SUMMARY CONT'D: On the economic front, although
Nigeria faces many challenges, including alleviation of the
poverty afflicting the majority of the population,
macroeconomic indications were positive for the second half
of 2007. Inflation stayed near 6 percent throughout that
period. The Central Bank estimated GDP growth at 6 percent
for the third quarter of CY07, with non-oil growth at 9.5
percent. Foreign exchange reserves passed USD 50 billion in
December. END SUMMARY.

---------------
POL/ECON UPDATE
---------------
3. (U) Following is a joint Embassy Abuja-ConGen Lagos
compilation of December 2007 political/economic highlights,
which did not feature in our other reporting, covering:
-- Election Tribunals & Electoral Reform
-- Corruption
-- Niger Delta
-- National Assembly
-- Human Rights
-- Economic News: ECOWAS Tariff, Power, Aviation

-------------------------------------
ELECTION TRIBUNALS & ELECTORAL REFORM
-------------------------------------
4. (SBU) Nigerian press report on December 21 the Electoral
Reform Panel is soliciting recommendations on how to improve
Nigeria's electoral system from former heads of state,
including former presidents Obasanjo and Shagari and former
heads of state Abdulsalami Abubakar and Ibrahim Babangida.
(Note: The 22-member Electoral Reform Panel, headed by former
Chief Justice Muhammad Uwais, was inaugurated on August 28 by
President Yar'Adua. In November, President Yar'Adua ordered
the suspension of public hearings before the Panel until
after the Presidential Election Tribunal (which is
entertaining cases against the President's April election)
renders its ruling. While the overall composition of the
Panel has been praised as representative of a cross-section
of Nigerian civil society, Uwais' appointment as chairman and
the Panel's merely-advisory status have been criticized. End
Note.)

5. (U) On December 18, Justice Umaru Abdallahi, President of
the Federal Court of Appeal (which appoints and supervises
justices to the various presidential, gubernatorial, and
state election tribunals throughout the country), alleged
politicians were attempting to bribe election tribunal
justices in an effort to sway outcomes. Abdallahi will
appoint justices in January to sit on the panels entertaining
appeals to the decisions already rendered by certain
gubernatorial election tribunals (in October and November,
tribunals overturned the gubernatorial elections in Kogi,
Kebbi, and Adamawa states, ordering fresh polls).

6. (U) Action Congress presidential aspirant Atiku Abubakar,
who filed a joint petition with All Nigeria People's Party
candidate Muhammadu Buhari contesting President Yar'Adua's
April election, petitioned the Supreme Court on December 2 to
permit the use of oral testimony (and not simply witness

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depositions to be remitted to the court). In November, the
Presidential Election Tribunal disallowed the use of oral
testimony in Buhari's case. (With potentially several hundred
witnesses to be called to the stand, the Tribunal feared a
protracted trial.) The Supreme Court is expected to rule
January 17.

----------
CORRUPTION
----------
7. (SBU) On December 31, Independent and Corrupt Practices
Commission (ICPC) announced it has commenced its probe of 31
former governors, who served during former president
Obasanjo's tenure (1999-2007). (Note: Case files against the
31 former governors had been remitted to former Chief Justice
Muhammad Uwais while the governors (who enjoyed
constitutional immunity from prosecution at the time) were in
office. On December 19, Chief Justice Idris Kutigi sent
these case files (and 6 others against former governors) to
the ICPC. End Note.)

8. (U) On December 27, Senator Iyabo Obasanjo-Bello, daughter
of former president Obasanjo, appeared for interrogation at
Economic and Financial Crimes Commission (EFCC) headquarters
over alleged contracts fraud. An Austrian firm petitioned
the EFCC and the Presidency to investigate contracts totaling
USD 30 million the firm had disbursed to Obasanjo-Bello when
she served as Commissioner in the Ogun State government.

9. (U) Nigerian press report the Senate is set to investigate
former president Obasanjo over a USD 500 million loan
allegedly acquired from China to finance a rural telephone
project during his tenure.

10. (U) On December 22, the Ekiti High Court charged former
Ekiti governor, Ayodele Fayose, with the 2005 murder of Tunde
Omojola. (Note: Omojola, a member of the National Conscience
Party (NCP), was allegedly beaten to death while monitoring a
local councillorship election being contested by his
brother-in-law, Labaika Suleiman (also NCP), in May 2005.
Reports suggest Fayose entered the polling station and
ordered his armed guards to kill Omojola for attempting to
stop Fayose from rigging the election. End Note.) At the
time the charge was filed, Fayose was incarcerated already
after being denied bail by a Lagos High Court on a 51-charge
count of fraud and money laundering. Fayose is scheduled to
appear in the Ekiti High Court on January 9 (for the murder
trial) and the Lagos High Court on January 10 (for the
corruption trial).

11. (U) On December 17, a Federal Court denied bail to former
Delta governor James Ibori (1999-2007), who was arrested by
the EFCC on December 12 for allegedly stealing more than USD
80 million in public funds. Ibori's trial is scheduled to
begin January 11. (Note: Ibori is widely viewed as one of
the principal financiers of Yar'Adua's election campaign.
This case is being viewed as a litmus test for the
President's stated commitment to tackling corruption. End
Note.)

12. (U) Attorney General (AG) Michael Aondoakaa announced on
December 12 that the GON is considering merging the EFCC,
ICPC, and the Code of Conduct Bureau due to considerable
overlap in the mandates of all three anti-corruption bodies.
The AG told the House Committee on Justice that such a merger
would help avoid instances of double jeopardy and could
streamline the government's anti-corruption efforts.

-----------
NIGER DELTA
-----------
13. (SBU) On December 26, armed gunmen attacked an US-flagged
vessel M/V Hondo River while it was operating in Nigerian
territorial waters. The fifteen crewmembers on board
including an AmCit were robbed and sustained
non-life-threatening injuries. The vessel arrived safely at
its final port of call, Onne. (Note: Hondo River is operated
by Trico Marine and was providing services to ExxonMobil's
near-offshore oilfields. End Note.)

14. (SBU) ConGen Lagos contact confirmed the December 19

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release of Bayelsa Deputy Governor's father (following nine
days in captivity) and suggested that Bayelsa militants (not
the police or Joint Task Force (JTF)) apprehended the
criminals responsible for the attack. The militants may have
turned over the Deputy Governor's father and the criminals to
the state government as a gesture of goodwill. Also,
according to several press reports, father of Bayelsa State
Accountant General Thomas Zidafamor was kidnapped on December
19, shortly after the release of the Deputy Governor's
father. Press reports suggest the attack was pre-meditated.

15. (SBU) According to security sources, an explosion
occurred at a refinery jetty on December 19 at 0300 hours
outside Port Harcourt (Rivers State). "Serious shooting" was
also reported by security sources in Okrika around 0500 hours.

16. (SBU) A human rights contact reported an "awesome clash"
between militants and the JTF in Okrika on December 19,
reportedly resulting in damage to a jetty adjacent to the
Nigerian National Petroleum Corporation (NNPC) premises and
the death of at least three individuals. Nigerian press
report criminal leader Ateke Tom (of Rivers State) claimed
responsibility for the attack, reportedly in retaliation for
a JTF attack on his base in Okrika. Tom publicly announced
his actions were "predicated on the general lack of
confidence in the presidential-brokered peace."

17. (U) Bayelsa militants publicly renounced negotiations
with the GON, but are reportedly maintaining positive
relations with Bayelsa State Government. Meanwhile,
spokesman for the Movement for the Emancipation of the Niger
Delta (MEND) Jomo Gbomo claimed MEND did not support the
militants' December 6 signing of the Bayelsa State-backed
Bayelsa Peace Conference and Agreement.

-----------------
NATIONAL ASSEMBLY
-----------------
18. (U) On December 30, Speaker of the House of
Representatives Oladimeji Bankole said the House will
determine whether due process was followed when the Economic
Financial Crimes Commission (EFCC) placed Chairman Nuhu
Ribadu on sabbatical. (Note: On December 27, the EFCC
announced Ribadu is being sent to the Nigerian Institute for
Policy and Strategic Studies in Plateau State to begin a
10-month training course. The GON endorsed the sabbatical on
December 31. End Note.)

19. (U) During its annual budget review, the Senate
Appropriations Committee discovered that since 2004 several
ministries have been diverting government funds into the
private bank accounts of top government officials. The House
was scheduled to finalize the budget on December 27; however,
the House Appropriations Committee accused the GON of
"purposely withholding" necessary information concerning
contracts, benchmarks, and surplus funds (dating back to
2005). Passage of the budget will top the National
Assembly's agenda when it reconvenes January 9.

------------
HUMAN RIGHTS
------------
20. (U) In a December 17 statement, Amnesty International
(AI) accused the GON of illegally executing seven prisoners
in the last two years, claiming defendants lacked legal
representation or necessary resources to file appeals. The
seven individuals were convicted of armed robbery in the
northern state of Kano, and sentenced to death. While Kano
governor Ibrahim Shekarau endorsed the death sentences, the
seven were moved to other prisons in the country and later
hanged. Nigerian human rights attorneys have cast doubt on
AI's accusations, asserting the cases had followed due
process.

21. (SBU) On December 11, the Abuja Court of Appeal ruled the
Public Order Act of 1990 infringed upon fundamental human
rights and that public gatherings no longer required permits.
Inspector General of Police said the Nigerian Police Force
(NPF) will challenge the decision at the Supreme Court.
(Note: The NPF frequently cites the Act to forcibly disband
public gatherings critical of the government. End Note.)

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22. (U) The Inspector General of Police admitted that members
of the Nigerian Police Force killed 785 suspected armed
robbers from June-September 2007. The GON also publicly
stated that police had killed at least 8,564 individuals
between 2000 and 2007.

-------------
ECONOMIC NEWS
-------------
23. (SBU) Finance Minister Usman announced the suspension of
the ECOWAS Common External Tariff (CET) on December 14.
While Usman said Nigeria is still committed to the CET in the
long run, the GON reached a deadlock with ECOWAS trading
partners regarding which products could qualify for "Type B"
exceptions or be subject to 50 percent duties. (Comment:
Vested interests are continuing to keep high tariffs and
import bans in place, despite their negative impact in terms
of customs corruption, high prices to consumers and for
factors of production, and continuation of a system based on
favoritism and connections rather than creating conditions
for broader economic participation and growth. End Comment.)


24. (U) Nigeria's electricity woes continue. To meet
projected national demand by 2010, the GON requires an
estimated USD 13 billion (an amount greater than the GON's
2008 budget). The Nigerian Electricity Regulation Commission
(NERC) and National Electric Power Authority forecast the
demand for electricity to exceed 16,000 megawatts by 2010.
NERC has agreed to develop a paper with Post that will detail
the impediments to growth and ways forward to alleviate the
current power crisis and meet the 2010 demand goal.

25. (U) Following the December 21 announcement that several
Nigerian airlines had secured a waiver to operate flights
into the United States, Harold Demurin, Director-General of
the Nigerian Civil Aviation Authority, informed that Nigerian
carriers Arik, Virgin Nigeria, and Bellview Airlines were in
the process of leasing aircraft from US-designated Category
One countries. Demurin expects to begin operations from
Lagos to the US on these carriers by mid-2008. (Note: North
American Airlines currently operates three round-trip
Lagos-New York flights per week. Delta Airlines commenced
operations between Atlanta and Lagos earlier this month. The
safety of Nigerian-operated aircraft has been the major
hurdle precluding Nigerian airlines from flying into the US.
Facilitating travel between the US and Nigeria, particularly
through direct flights, is key to improving trade and
tourism. End Note.)

26. (U) Lagos Governor Babatunde Fashola presented to the
State House Assembly an USD 3.5 billion budget, including USD
2.3 billion for capital expenditures. The (unfortunately)
named "Great Leap" budget is designed to tackle some of
Lagos's major problems, including deteriorating
infrastructure, poor sanitation, and education. Fashola
hailed the budget as a departure from the traditional
emphasis on current spending; however, reaction from local
experts and the general public has been mixed. While
encouraged by the governor's apparent interest in long term
planning, most local observers are maintaining a wait-and-see
attitude.

---------------------
OTHER NOTEWORTHY NEWS
---------------------
27. (U) In a televised Christmas address, President Yar'Adua
thanked the people of Nigeria for keeping faith in his
administration over the past seven months. Yar'Adua stated
the government will ensure more visible progress towards the
implementation of his Seven Point Plan in 2008. (Note: On
August 1, Yar'Adua outlined his Seven Point Plan to address
the power and energy sector, food security and agriculture,
unemployment, mass transportation, land reform, security
(high crime, Niger Delta), and education. End Note.) The
President also encouraged Nigerians to incorporate godliness,
brotherly love, and honesty into their daily lives and said
his administration will be counting on the goodwill, support,
and cooperation of the Nigerian people to help realize a
strong, united, and prosperous nation.

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28. (U) On December 23, Nigerian press report over 5,000
Nigerian peace-keeping troops, currently serving in Darfur,
have yet to be paid most of their allowances (approximately
USD 8.5 million).

29. (SBU) The ruling People's Democratic Party (PDP) national
convention, initially scheduled for December and later
postponed to January, is now expected to take place April
2008. Influential positions, including party chairman, will
be decided at the convention. Rumors have been circulating
that the convention is being postponed until the Presidential
Election Tribunal rules on President Yar'Adua's April
election. As well, the campaigns for PDP chairman appear in
full swing, with former Senate President (2000-2003) Pius
Anyim emerging as a favorite to challenge former Ebonyi
governor (1999-2007) and reported Obasanjo-loyalist Sam Egwu
for the coveted position.

30. (U) Following President Yar'Adua's December working visit
to Washington, the GON is sending Special Advisor for Poverty
Eradication (cabinet-level) to Washington January 8-11 to
obtain additional information about microfinance institutions
and their relevance to Nigeria. The visit comes on the heels
of Yar'Adua's attendance at the Academy for Educational
Development-sponsored civil society roundtable in December.
SANDERS

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