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Cablegate: Nigeria: Biweekly Pol/Econ Updates March 1-16, 2008

VZCZCXRO0627
PP RUEHMA RUEHPA
DE RUEHUJA #0536/01 0801620
ZNR UUUUU ZZH
P 201620Z MAR 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 2389
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHYD/AMEMBASSY YAOUNDE 0207
RUEHOS/AMCONSUL LAGOS 8954
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RUEKJCS/DIA WASHINGTON DC
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHNSC/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 06 ABUJA 000536

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR AF/W, INR/AA
STATE PASS TO USTR-AGAMA
DOE FOR GPERSON

E.O. 12958: N/A
TAGS: PGOV PHUM ECON EPET ETRD KIRF NI
SUBJECT: NIGERIA: BIWEEKLY POL/ECON UPDATES MARCH 1-16, 2008

REF: A. 07ABUJA 1593
B. ABUJA 0106

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

1. (U) Following is a joint Embassy Abuja-ConGen Lagos
compilation of March 1-16, 2008 political/economic
highlights, which did not feature in our other reporting,
covering:
-- Elections: Tribunals, Reforms, Party Politics
-- Corruption
-- Niger Delta
-- National Assembly
-- Human Rights, Migration, Religious Freedom
-- Economic News
-- ECOWAS
-- Oil and Gas

---------------------------------------------
ELECTIONS: TRIBUNALS, REFORMS, PARTY POLITICS
---------------------------------------------
2. (U) Both Muhammadu Buhari (All Nigeria People's Party,
ANPP) and Atiku Abubakar (Action Congress, AC) have asked the
Supreme Court to overturn the Presidential Election
Tribunal's February 26 decision to uphold the April 2007
presidential election. Buhari filed his appeal February 29,
while Atiku filed his appeal March 14. A Supreme Court
ruling on the presidential election challenge is expected as
early as April 2008.

3. (SBU) On March 11, the Senate confirmed the appointment of
Court of Appeals Justices James Ogebe and Saifullahi
Coomassie to the Supreme Court. Justice Ogebe presided over
the Presidential Election Tribunal, which ruled February 26
to uphold President Yar'Adua's April 2007 election, and
Coomassie delivered the controversial February 19 ruling that
may pave the way for Obasanjo-loyalist Andy Uba to take up
the position of Anambra governor when current governor Peter
Obi's (All Progressive Grand Alliance) tenure expires in
2010.

4. (U) KANO: The Kano State Election Tribunal ruled March 11
to uphold second-term governor Ibrahim Shekarau's (ANPP)
election, declaring petitioner Ahmed Bichi (People's
Democratic Party, PDP) failed to prove that any
"non-compliance" with the Electoral Act "substantially
affected" the outcome of the elections. Bichi will appeal
the Tribunal's ruling. (Note: Bichi is currently serving as
Minister of State for Commerce and Tourism.)

5. (U) IMO: On March 6 the Imo State Election Tribunal upheld
the election of Governor Ideki Ohakim of the People's
Progressive Alliance (PPA). The tribunal dismissed the
principal contender, Ifeanyi Araraume (PDP), who they said
had failed to prove beyond a reasonable doubt that he won the
number of votes required in the 27 local government areas of
the state. Araume will file an appeal.

6. (U) ABIA: The Abia State Election Tribunal nullified the
election of Governor Theodore Orji (PPA) February 25 and
declared that Onyema Ugochukwu (PDP) should be sworn in as
governor. Orji is contesting the decision, and a ruling by
the Appeals Court is expected within two months. According
to the tribunal ruling, Orji, who was the Chief of Staff to
the previous governor, did not meet the legal requirement to
run for office, because a candidate may not hold any
government position 30 days prior to filing as a candidate.
PDP lawyers provided evidence that Orji was still living in
government quarters and earning a government salary at the
time the elections were being held. The appeal process will
delay widely anticipated Economic and Financial Crimes
Commission (EFCC) corruption charges against Orji. (Note:
Orji had actually been in the EFCC's custody when the
election was held; he was released on bail and the case
suspended upon his election and subsequent swearing in. As

ABUJA 00000536 002 OF 006


governor, he would be immune from prosecution; as an average
citizen, he could be on his way back into court. End Note.)

7. (SBU) The PDP held its annual national convention March 8.
Most people in attendance largely ignored the speeches by
outgoing members of the party secretariat, as well as the
fact that the fifty or so ballot boxes dutifully provided by
the Independent National Electoral Commission (which,
ironically, also sent a formal election monitoring team),
remained unused. Despite the hopes of many to the contrary,
it was business as usual in the PDP.

----------
CORRUPTION
----------
8. (U) A Federal High Court in Rivers state granted an
injunction March 5 against the investigation, arrest, or
prosecution of former Rivers governor Peter Odili (PDP). The
Economic and Financial Crimes Commission (EFCC) claimed the
court had no legal authority to bar it from investigating the
governor for corruption charges. The EFCC will appeal the
ruling.

9. (U) On March 13 former Jigawa governor Ibrahim Turaki
(ANPP) filed an application at the Abuja Federal High Court
to strike out the charges of corruption and money laundering
brought against him by the EFCC. He argued that a Kano
Federal High Court had earlier granted a "perpetual
injunction" barring the EFCC or any government agency from
arresting or prosecuting Turaki.

10. (U) The EFCC is planning to prosecute directors of the
Nigerian Ports Authority (NPA) over allegations of irregular
award of contracts valued at over 100 billion naira ($855
million). More than 24 thousand contracts have allegedly
been awarded without due process.

11. (U) Former Delta State Governor James Ibori attempted to
have his trial for money laundering and other counts (brought
by the EFCC) assigned to a different judge, according to
press reports. Ibori claimed the Federal High Court in
Kaduna was biased against him. However, the court disagreed,
stating money laundering, economic, and financial crimes are
exclusively within the Federal High Court's jurisdiction.

-----------
NIGER DELTA
-----------
12. (U) According to press reports, gunmen in Rivers State on
March 4 kidnapped a German employee of Julius Berger, a
prominent German construction company in Nigeria, and killed
a military Joint Task Force (JTF) soldier from Operation
Restore Hope attached to him. The kidnapped German was
reportedly working on the West-East road project awarded by
the Federal Government to develop infrastructure in the Niger
Delta. Two children of a former Etche Local Council chairman
were also kidnapped on March 4. The children's mother paid
approximately $13,000 but the kidnappers reportedly demanded
an additional $342,000. The daughter of a shipping magnate
was reportedly kidnapped on her way to school in Port
Harcourt on March 10, according to press reports.

13. (U) Following these kidnappings, the Rivers State
government publicly stated it would no longer abide these
attacks and would "track down suspected killers with a view
to prosecuting them." Rivers State Governor Amaechi
reportedly said his government had adopted a "proactive
policy" which would arrest and prosecute anyone directly or
indirectly linked to kidnapping.

14. (U) March 11 press reports claim Governor Amaechi and
Senate President David Mark visited one of criminal/militant
leader Ateke Tom's camps which the Nigerian military's
"Operation Flush Out III" had uncovered. In addition to
finding rifles and ammunition, an underground pipeline
running to a "private jetty where petroleum products are sold

ABUJA 00000536 003 OF 006


illegally" was reportedly found under one of Ateke Tom's
uncompleted buildings.

-----------------
NATIONAL ASSEMBLY
-----------------
15. (U) March 12 the National Assembly (NASS) amended the
2008 budget at 2.748 trillion naira ($23.5 billion), which
was $2.6 billion more than asked for by President Yar'Adua,
but $1.3 billion less than the amount initially sent to
Yar'Adua by the NASS on February 20. The adjusted budget was
produced by a 14 person joint committee led by Deputy Senate
President Ike Ekweremadu and Deputy Speaker of the House
Usman Bayero Nafada. The reductions came mainly from
allocations in the areas of Defense, Army and Air Force,
Transportation, the National Planning Commission, the Senate
and House of Representatives, NASS General Services and
Judgment Debts. Lower capital expenditures were put forth
for the ministries of Agriculture, Water Resources, the
Federal Capital Territory, Health, Interior, the Science and
Technology Commission, Code of Conduct Bureau, Police Service
Commission, and the NASS. The lower amount of expenditure
cut the budget deficit from $5.5 billion to $1.1 billion.

16. (U) The National Assembly is in recess until the week of
April 7, at which time they hope to receive approval of the
federal budget from the President. (Note: March 20 press
reports suggest that the President may again withhold assent
and seek further cuts. End note.) Once the budget is
approved, members of the House of Representatives will begin
discussions on amendments to the Constitution.

------------------------------------------
HUMAN RIGHTS, MIGRATION, RELIGIOUS FREEDOM
------------------------------------------
17. (U) Press reported March 11 that the British government
will soon train the first cadre of 308 police officers
selected to participate in the newly-created Anti-Terrorism
Squad. Northern newspaper Daily Trust claimed "even though
there was no support for America (to train Nigerians)," the
GON "would soon ask for some help from foreign governments"
to assist in fighting what the Inspector General of Police
Mike Okiro termed "domestic terrorists." Okiro explained
that domestic terrorism is witnessed "daily through numerous
acts of violent criminal acts, assassinations, and bank
robberies."

18. (U) During the weekend of March 8, renewed communal
violence (ref A) resulted in the loss of an undetermined
number of lives in Mbaku, a village outside of Makurdi, Benue
State. Trouble apparently started when ethnic Fulani
herdsman and their cattle were drinking and bathing in the
water near a local dam. According to Police Commissioner
Ibiyinka Kayode, this repository is the only clean source of
drinking water in the area and villagers claimed the Fulani
were contaminating it. Village leader, Mbashir Zaki
Aemberga, further attributed the violence to the continuous
destruction of local crops by the Fulani cattle constantly
grazing on farmlands. Media reports claim seven people were
killed, while Kayode argued that only one Fulani person died
as a result of the violence.

19. (U) On March 6, Assistant Controller of Prisons, Kayode
Odeyemi, issued a statement that a total of 316 juveniles,
aged 14-18, are currently in custody in 11 prisons throughout
the country. Also in the statement, the Nigeria Prisons
Service also denied previous reports (Ref B) that there were
300 babies in the nation's prisons, stating that in fact
there were only 19. Rivers, Delta, and Imo state had the
highest population of juveniles according to the report.

20. (SBU) An appeal has been made to the international
community to assist with the resettlement of Nigerian
citizens affected by the International Court of Justice
judgement on the Bakassi penninsula. Leader of the Nigeria
delegation to the Nigeria-Cameroon Mixed Commission, Prince

ABUJA 00000536 004 OF 006


Bola Ajibola, who made the plea, did not however explain what
happened to the one billion naira "Bakassi Resettlement Fund"
to which many countries already contributed. An alarm was
raised last year by the Mixed Commission about the missing
funds and the GON has yet to explain what happened. Some
sources allege that former governor of Cross River State
Donald Duke "misappropriated" the resettlement money.

21. (SBU) President Yar'Adua attended the 11th Heads of State
Islamic Summit of the Organization of the Islamic Conference
(OIC) in Dakar, Senegal on March 13. This is Nigeria's
highest-profile engagement with the OIC since joining the
organization in 1986. Nigeria's membership in the OIC has
been criticized by some parts of the Christian community as
an attempt to "Islamize" the country. Foreign Minister Ojo
Maduekwe (a Christian) defended President Yar'Adua's
attendance at the recent summit insisting that "there are
benefits to be derived from Nigeria's OIC membership."

-------------
ECONOMIC NEWS
-------------
22. (U) Northern Nigeria has been ravaged by outbreaks of
measles. Recent reports from Kano, Katsina, Zaria, Gusau,
and Dutse indicate that hundreds of children have died as a
result of the disease. Poor families in rural areas have
been hardest hit. 50 children reportedly died in Ikara local
government in Kaduna State, while another 150 children died
in Zaria town. Low immunization rates are to blame for the
tragedy.

23. (U) President Yar'Adua approved the establishment of the
Ogun/Guangdong Free Trade Zone (FTZ) in Igbesa, Ogun State.
The first phase of the project will cost $500 million. With
this formal approval, Ogun state now has tree FTZs (the
others are Olokola FTZ in Ogun East and the Kajola
Specialized Railway Terminus FTZ in Ogun Central).

24. (U) Nigeria's external debt could rise by 118.2 percent
to $7.2 billion in the next four years, according to
"Nigeria's Economic and Financial Indicators 2004 to 2012"
report by the International Monetary Fund (IMF). External
debt, which totaled $3.397 billion in September 2007,
comprises multilateral debt ($2.852 billion) and non-Paris
debt ($545 million). The IMF has advised Nigeria to
implement the debt management framework, particularly at
state and council levels. IMF expressed support for the
government's decision to rely only on concessional external
financing to prevent a re-accumulation of unsustainable debt.

25. (U) The Minister of Agriculture and Water Resources,
Sayyadi Abba Ruma, reported that the country's agriculture
output had dropped drastically, but did not give figures for
the shortfall. Low production cuts across all agricultural
sub-sectors including rice, maize, cassava, sugar, potatoes
and vegetables. Yearly 15 million tons of wheat are required,
but only 70 thousand tons are produced in Nigeria.

26. (U) An American firm, IceCool Park Limited, has received
financial backing from GT Bank and Diamond Bank for the
implementation of the first phase of the IceCool
Entertainment Park, estimated to cost $40 million. The
project will reportedly employ 1000 Nigerians and will
generate more than 20 million naira ($172,414) for the Ogun
State Government.

27. (U) The American Business Council in Nigeria was formally
launched in Lagos on March 6. Its purpose is to promote
development of commerce and investment between the U.S. and
Nigeria. The Council will support sustainable socio-economic
reform initiatives in Nigeria, through public policy
advocacy, promotion and implementation of projects. It will
promote the removal of trade barriers between Nigeria and the
U.S. and work with the U.S. Chamber of Commerce to advocate
the views of the American business community in Nigeria.


ABUJA 00000536 005 OF 006


28. (U) The Central Bank of Nigeria (CBN) has revealed that
non-petroleum industries have boosted economic growth in the
last quarter of 2007. Growth increased 6.1 percent in the
third quarter to 7.6 percent in the last quarter of 2007.
This increase was due to manufacturing firms increasing their
production during the holiday season and to the increased
prices of cocoa, cotton, soybean and palm oil in the
international market.

29. (U) The World Bank has listed the Nigerian Stock Exchange
(NSE) among the top 20 emerging markets, alongside Brazil,
Russia, India and China. This announcement is a confidence
booster for the Nigerian economy which is critical for
strengthening the Nigerian capital market and making it more
competitive for both domestic and foreign investors.

30. (U) The International Monetary Fund (IMF) forecasted 9
percent economic growth rate for Nigeria, only second to
China with 10 percent, while warning of the risk of high oil
revenue spending and over-dependence on energy on the
macroeconomic stability of the country. The IMF position
buoyed hopes that the country will receive improved rating
from the global sovereign rating agencies Standard and Poor
and Fitch.

31. (U) This month, President Yar'Adua demanded a review of
existing international trade policies which were not
beneficial to the West African sub-region. He argued that
although broadened participation in international trade
offered important avenues for the growth of the sub-region,
the volatile and complex pace of globalization had created
uncertainty about the downside risks presented by the open
economy. In order to counter these concerns, he ordered the
review of existing international trade policies.

32. (U) The GON says that 12 million more housing units are
needed to address the housing problem facing the country.
The Minister of State for Environment, Housing, and Urban
Development, Chica Odom, said that federal and state
governments would collaborate to meet the housing needs of
Nigerians. He said that the government would embark on
aggressive urban renewal to restore its abandoned housing
estates and to make them livable. He also noted that the
government is no longer building houses, but provides land
and the environment for private developers to access funds at
reasonable interest rates to develop properties.

33. (U) The policy of restricting banks' lending rates to a
maximum 400 basis points above the Minimum Rediscount Rate
(MRR) is not longer valid, according to the CBN. The CBN
explained that subsequent developments in the economy led to
the adoption of a market-based framework for monetary policy
management with the Monetary Policy Rate replacing the MRR.
Lending rates will still be high because funds for banks are
still high, the business environment is risky, and future
inflationary trends are uncertain.

34. (U) The World Bank has proposed a new loan of about $2
billion under its International Development Assistance (IDA)
for Nigeria between 2008 and 2010. Specifically, it offers
Nigeria $450 million in 2008, $877 million in 2009 and $700
million in 2010. The loan is tied to projects in education,
health, roads and agriculture.

------
ECOWAS
-------
35. (U) The Economic Community of West African States
(ECOWAS) has agreed to pursue a comprehensive,
development-oriented and mutually beneficial Economic
Partnership Agreement (EPA) with the European Union (EU).
The sub-region had failed to meet a December 31, 2007
deadline for signing of the EPA with the EU. The purpose of
this agreement is to replace the bilateral trade agreements
with African, Caribbean and Pacific countries and allow
access to the EU market.

ABUJA 00000536 006 OF 006

-----------
OIL AND GAS
-----------
36. (U) The U.S oil service firm Expo won contracts valued at
over $300 million in the last six months in Nigeria and other
African countries. The contracts cover a range of offshore
deepwater products and services and are to be delivered on a
phased basis over the next three years. Out of the $300
million, $60 million were secured for West and South Africa
region for provision of offshore deepwater technology for
Chevron, Agip, and Shell in Nigeria, increased scope from BP
deepwater in Angola, and for Total and Noble in the Cameroon.


37. (SBU) ExxonMobil resumed full production from its oil
fields near its Qua Iboe terminal after a minor pipeline
break caused the release of less than four barrels of oil.
The company had shut in around 20,000 barrels of oil as a
precaution. ExxonMobil has brought in a team from the United
States to evaluate the pipeline.

38. (SBU) After local drivers complained about poor running
vehicles and engine damage, contaminated gasoline was found
at gas stations owned by Oando Plc and Mobil Oil Nigeria Plc.
The gasoline contained 20 percent ethanol, far above
Nigerian maximum specifications of 3 to 5 percent. Nigerian
companies are not capable of properly handling and storing
gasoline heavily blended with ethanol. Oando Plc had
purchased the gasoline from an international broker then
distributed it to its own stations and to Mobil. (Note: The
downstream operators take turns importing gasoline which then
they distribute to other downstream companies on a schedule
agreed to by Nigerian regulators. End note.)

39. (SBU) A Post contact with a European downstream company
which did not receive the contaminated gas told Econoff that
Nigerian regulators failed to inspect the gasoline before it
was offloaded from the tanker. He could not say for certain
why Oando and its broker bought the blended gasoline in the
first place. Nigerian regulators have ordered the gasoline
pulled from the market and may require Oando to pay for
damages.
SANDERS

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