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Cablegate: Nigeria: Government and Exporters Are Optimistic On

VZCZCXRO3035
PP RUEHMA RUEHPA
DE RUEHUJA #2340/01 3361412
ZNR UUUUU ZZH
P 011412Z DEC 08
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 4577
INFO RUEHOS/AMCONSUL LAGOS 0349
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC

UNCLAS SECTION 01 OF 03 ABUJA 002340

SENSITIVE
SIPDIS

DEPT PASS TO USTR-AGAMA AND GARDE; AID FOR GWEYNAND AND SLAWETZ; AND
SBA FOR SMITH
TREASURY FOR PETERS AND HALL
DOC FOR 3317/ITA/OA/KBURRESS AND 3130/USFC/OIO/ANESA/DHARRIS
USDA/FAS FOR MAURICE HOUSE, DOROTHY ADAMS
DOJ FOR KOUAME

E.O. 12958: N/A
TAGS: ETRD ECON KIPR EAGR EINV EAID PGOV NI
SUBJECT: NIGERIA: GOVERNMENT AND EXPORTERS ARE OPTIMISTIC ON
DEEPENING US/NIGERIA TRADE AND INVESTMENT

REF: A. ABUJA 2302
B. ABUJA 2295
C. ABUJA 2278
D. ABUJA 2223
E. ABUJA 2197
F. ABUJA 2177
G. ABUJA 2146
H. ABUJA 1977
I. ABUJA 1925

1. (SBU) Summary. During the November 17 - 20 visit of Laurie-Ann
Agama, Director for African Affairs in the Office of the United
States Trade Representative (USTR), Government of Nigeria (GON)
officials reiterated Nigeria's commitment to the U.S. - Nigeria
Trade and Investment Framework Agreement (TIFA), improving Nigeria's
non-oil export performance under the African Growth and Opportunity
Act (AGOA), and negotiating a bilateral investment treaty (BIT).
They agreed that the U.S. - Nigeria trade and investment
relationship should be enhanced beyond AGOA. The GON acknowledged
there are obstacles to improving Nigeria's non-oil export
performance and business climate, but remain optimistic that the
obstacles are not insurmountable. In the Ambassador's November 26
meeting with the President's Chief Economic Advisor Tanimu Yakubu,
she pushed for better engagement on the BIT and further reduction on
the import bans. Yakubu responded that the GON would send a
delegation to the U.S. to discuss BIT and look again at bans. End
Summary.
.
Meeting With the Ministry of Commerce and Industry
--------------------------------------------- -----
.
2. (SBU) Laurie-Ann Agama, Acting EconCouns and EconSpecialist met
with officials of the Ministry of Commerce and Industry (MCI) led by
the Permanent Secretary, Elizabeth Emuren on November 17, 2008.
Emuren reiterated Nigeria's commitment to the TIFA, AGOA, BIT and
trade reforms. She underscored that collaboration and dialogue is
necessary to making more progress on the U.S. - Nigeria trade
agenda.

3. (SBU) Agama commended the GON on its recent tariff policy changes
that resulted in a substantial reduction in the number of items on
the import prohibition list and reductions in the tariff rates. She
also commended the reduction in the tariff on goods in the fifth
tariff band from 50% to 35%. Agama asked for clarification whether
Nigeria's West African neighbors have or will accept the fifth
tariff band and its applicable duty in the Economic Community of
West African States (ECOWAS) Common External Tariff (CET) template.


4. (SBU) In response to Agama's question, Badeji Abikoye, Director
of Trade at MCI, stated that the fifth tariff band introduced by
Nigeria has been ratified by the ECOWAS Council of Ministers, and
negotiations are ongoing between Nigeria and its ECOWAS neighbors on
the issue. Abikoy related that to the best of his knowledge there
was no timeline to conclude the negotiations. (Note: Agama and
Acting EconCouns attended part of a three-day conference at ECOWAS
regarding implementation of the fifth band. The GON notified ECOWAS
of the products to be included in the fifth band, reported that
these products were included to promote industrial development and
it was open to further negotiations. End Note).

5. (SBU) Agama stressed the need for the GON to deepen reforms to
improve the business environment. She cited the violation of
Marriott International's trademark and the U.S. Export-Import Bank's
relationship with U.S. company EarthCare Technologies as examples
that illustrate the challenges of doing business in Nigeria.
Abikoye agreed with Agama on the need for further reforms and said
he would work with the relevant agencies to resolve the Marriott
issue.

6. (SBU) Regarding Nigeria's AGOA strategy and focus sectors,
Abikoye said that an inter-agency group is presently working on it,
and he opined that the focus products will include shea butter,
handcrafts, and seafood. He expressed concerned with technical
barriers to trade such as Sanitary and Phytosanitary Standards (SPS)
and requested the USG certify either the National Agency for Food
and Drug Administration and Control or the Standards Organization of
Nigeria laboratory as adequate for quality assurance tests for

ABUJA 00002340 002 OF 003


Nigerian exports rather than having Nigerian exporters take their
goods to Accra, Ghana, for testing. Agama said she will pass on the
request to the relevant U.S. government agencies. She also
mentioned that the West African Trade Hub plans to enhance the
Nigeria AGOA Resource Center in Lagos.

7. (SBU) Regarding the date for the next TIFA council meeting to be
held in Washington, D.C., Emuren agreed with Agama to reschedule the
meeting for late January after the new U.S. administration has been
inaugurated.
.
Bilateral Investment Treaty - Way Forward
-----------------------------------------
.
8. (SBU) Regarding the BIT process, Agama explained that an
"exploratory process" should first be embarked upon by both parties
to better understand the contents of the BIT in order to decide
whether to launch negotiations. The GON reported that it already
established a ministerial committee chaired by the Chief Economic
Advisor to the President to study the U.S. Model BIT text, and make
comments while comparing it with the Nigerian model Investment
Promotion and Protection Agreement text. MCI officials acknowledged
the explanation provided by Agama but advised that the explanation
should also be provided to the Chief Economic Advisor, in order to
avoid dissipating so much energy on an issue the exploratory process
could easily resolve.

9. (SBU) On November 26 the Ambassador met with the President's
Chief Economic Advisor Tanimu Yakubu and conveyed this point to
which he agreed. Yakubu said beginning in January 2009 the GON
would send a team to Washington first, followed by participation in
5-8 digital video conference sessions afterward. Yakubu commented
that his government was committed to moving forward on this issue
and that he was supportive of reducing bans even further. The
Ambassador gave the recent example of her trip to Taraba State in
early November as an example of how bans hurt Nigeria's trade
(reftel C). She explained that many items, such as Taraba's
highland tea which need better packaging and inputs to make them
trade competitive, are banned by the GON. Yakubu took this on board
and said he would look at the issue.
.
NEPC Already Forging Ahead
--------------------------
.
10. (SBU) On November 18, 2008, during a meeting with Sidi Aliyu and
Opeyemi Abebe of the Nigerian Export Promotion Council (NEPC), both
said the NEPC is focusing on the supply-side bottlenecks faced by
exporters. Specifically, NEPC has engaged the services of
consultants to provide training to Nigerian exporters on product
development, while the consultants are also assisting with marketing
the products in the U.S. Abebe reported that there is a new focus
to target U.S. consumers through online channels rather than
focusing on attracting established U.S. importers. Agama responded
by commending the NEPC but also advised that while assisting
exporters in product development, it is also important to consider
product design so that the products will be appealing to U.S.
customers. She promised to put the NEPC in contact with U.S.
consultants that can assist in this area.

11. (SBU) Aliyu and Abebe also stated that a report on the AGOA
focus sectors has been completed and sent to USAID for comments.
The focus sectors include handcrafts, shea butter, and leather.
NEPC also plans to draft an AGOA strategy in conjunction with other
stakeholders in the GON and the private sector. The workshops will
be held during the first quarter of 2009 and NEPC requested USAID
play a role. Agama advised that NEPC should take the lead,
initiative, and ownership of the project, and the USG will find a
way to collaborate.

12. (SBU) Abebe signified NEPC's interest in signing up for the U.S.
Department of Commerce's e-learning toolkit on "Industry Analysis
and Trade Policy" which is available to developing countries trade
policy officials. Agama promised to liaise with the Department of
Commerce on the request.
.
SMEDAN EAGER TO WORK WITH SBA
-----------------------------
.

ABUJA 00002340 003 OF 003


13. (SBU) Agama and EconSpecialist met with officials of the Small
and Medium Enterprises Development Agency of Nigeria (SMEDAN), led
by Acting Director General Wale Fasanya. Fasanya stated that SMEDAN
has established "Business Support Centers" in some states in
collaboration with state governments, and "Business Information
Centers" in collaboration with local governments, community groups
and business associations. Through these centers SMEDAN provides
enterprise development services to small businesses. The enterprise
development services include training on how to write business
plans, accounting, marketing, selling techniques, legal and
regulatory framework for doing business, registering products, how
to access finance (psychology in approaching banks for loan),
operational aspects of production, and product quality.

14. (SBU) Fasanya reported that SMEDAN is also collaborating with
the National Poverty Eradication Program (NAPEP) and the Office on
Millennium Development Goals to provide entrepreneurship training to
individuals that benefit from the NAPEP loan scheme. Moreover,
SMEDAN plans to organize small businesses into clusters and enhance
their capacity to produce and export.

15. (SBU) Regarding AGOA and TIFA, Fasanya said that the December
2007 TIFA in Abuja was the maiden participation of SMEDAN in issues
relating to the TIFA and AGOA. He noted that SMEDAN is
collaborating with the NEPC and other GON agencies to improve the
capacity of small businesses to export not only within the region
but to developed markets in the U.S. and Europe.

16. (SBU) Fasanya underscored that SMEDAN is interested in building
a robust relationship with the U.S. Small Business Administration
(SBA). He said that a Memorandum of Understanding was signed
between SMEDAN and SBA in 2004/2005 but it was not implemented. He
hoped that a partnership can be established. Agama promised to pass
the request to SBA officials in Washington.
.
Nigerian Exporters Eager to Take Advantage of AGOA
--------------------------------------------- -----
.
17. (SBU) On November 17, 2008 Laurie-Ann Agama, Acting EconCouns
and EconSpecialist met with Joseph Idiong, President of the Nigerian
Exporters Association, who said that Nigerian exporters want to take
advantage of opportunities available under AGOA to export to the
U.S. He said that he organized several trade missions to the U.S.
in the past and plans to do more in the future. He also asked for
further information on U.S. trade groups that his association could
partner with to establish collaboration aimed at attracting
investment and improving Nigeria's export performance. Idiong also
requested advocacy training for Nigerian exporters.

18. (SBU) Idiong mentioned that though the private sector is willing
to explore the U.S. market under AGOA, inconsistency in government
trade policy and focus remains a problem. Specifically he stated
that successive Ministers of Commerce have their personal focus
sectors and projects they want to implement but unfortunately there
is no continuity in implementation whenever a new minister is
appointed. Idiong also said that there is lack of coordination
among various GON agencies responsible for trade policy formulation
and implementation.
.
Comment
-------
.
19. (SBU) Past USG assistance and GON efforts have improved AGOA
awareness in Nigeria. USG assistance will achieve better results if
the Nigerians can take leadership and ownership of their programs
while the USG only steps in to complement their efforts. Despite
many challenges to improving non-oil export performance, there are
some GON officials and the private sector that are optimistic that
achievements are possible. An update from the GON at the January
2009 TIFA Council Meeting should provide a strong indication of
whether the GON has taken the initiative.

SANDERS

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