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Cablegate: Nigeria: Esf Proposals for Fy 2002

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 10 ABUJA 003162

SIPDIS


DEPT FOR AF/W; DON BOOTH AND SOOKY PARK
ALSO FOR AF/EPS
STATE PASS TO AID-AFR


E.O. 12958: N/A
TAGS: EAID ECON PGOV PHUM PREL NI
SUBJECT: NIGERIA: ESF PROPOSALS FOR FY 2002


1. The following is Embassy Abuja's ESF funding proposals
for FY 2002


FY 2002 ECONOMIC SUPPORT FUNDS
U.S. Mission Nigeria Proposals


Program Overview


Nigeria has significant strategic value to the United States.
The world's eighth largest oil producer, Nigeria ranks as
the fifth largest supplier to the United States, providing
ten percent of total U.S. oil imports. Nigeria also is a
potential major supplier of natural gas, having the eighth
largest reserve in the world. Nigeria commands Africa's
second largest economy, is the largest U.S. trading partner
on the continent, and represents a huge potential market for
American producers. Moreover, Nigeria stands as the dominant
economic and political actor in the West African sub-region.


With a population of over 120 million, Nigeria is Africa's
most populous nation and its largest democracy. It also has
Africa's largest Islamic population, numbering roughly 60
million Muslims. A stable, prosperous Nigeria that values
democracy and its processes will improve the lot of its own
people, which translates into benefiting one of every five
Africans.


Since the 1999 return of civilian government, the
U.S.-Nigerian bilateral relationship has been a productive
one. Nigeria has promoted democratization and taken an
active role in conflict resolution in countries such as
Liberia, Sierra Leone, Guinea Bissau, Cote d'Ivoire, The
Congo, Burundi and Sudan. Additionally, Nigeria has taken a
constructive position on important transnational issues such
as counter-narcotics and HIV/AIDS. Since September 11,
Nigeria has voiced strong public support for U.S. operations
in Afghanistan and has been at the forefront of African
counter-terrorism efforts. Nigeria has become an important
ally for America on many issues.


However, Nigeria's democratic transition is not complete.
The electoral process is unsettled and susceptible to
violence. Communal violence and tensions have threatened
internal security in many areas. At the root of many of
these outbreaks are poverty and unemployment. Despite some
reforms such as progress on privatization, the non-oil
economy is not robust and has not produced the job and income
opportunities many had expected. Too many Nigerians still
await their democracy dividend.


The over-arching U.S. goal in Nigeria is to help protect the
country's long-term internal stability by promoting democracy
and sound economic reforms. A vibrant democracy devoted to
good governance and the rule of law will advance U.S. goals
here and throughout the continent. Direct investment in the
non-oil sector is an essential component for job creation,
poverty reduction and thus, political stability. The U.S.
can help Nigeria lower the barriers for those who wish to
play a productive role in the national economy.


Given Nigeria's pro-western leaning and its visible public
support for our counter-terrorism efforts in Afghanistan, we
should provide significant support to Nigerian
democratization, stability and economic development.
Provision of FY 2002 ESF will show that the U.S. has not
forgotten Africa and that close African partners, such as
Nigeria, can derive concrete, tangible benefit from aligning
their interests with ours.


DEMOCRACY AND GOVERNANCE


U.S. Policy Objectives and National Interests


Strengthening democracy is critical to the long-term
stability of Nigeria. Democratic governance safeguards human
rights and promotes the rule of law. It provides a conducive
environment for private investment and economic growth, and
helps position Nigeria to sustain a constructive role beyond
its border. A democratic Nigeria portends increasingly
closer bilateral relations and enhanced cooperation on
regional security, counter-terrorism, and international law
enforcement and other important USG interests. America's
interests benefit if Nigerian democracy succeeds. A deciding
factor will be the quality of the 2003 elections.


The 2003 elections present both a challenge and an
opportunity for Nigeria's democratic effort. With elections
less than two years away, the informal campaign already has
begun. The campaigning is intense and not always positive.
Without well-placed electoral assistance, 2003 could repeat
the irregularities that plagued the 1999 exercise, causing
many observers to deem them flawed. Potential obstacles
include inadequate election administration, insufficient
civic participation and widespread cynicism born of political
corruption. Moreover, the risk of electoral violence is high
and could mar the process. What happens during the lead-up
to election, especially voter registration, will be as
critical as the balloting itself. It is important that the
entire electoral process be viewed by most Nigerians as a
transparent, democratic improvement over the 1999 exercise.


In addition to ensuring credible elections, concerns
regarding federalism and decentralization need to be resolved
in a way that promotes good governance and a tolerant
political culture. New relationships need to be forged among
the different levels of government and between government and
civil society in order to deal more effectively with the
issues of democracy and governance. Also, Nigeria's police
force needs to be capable of providing the security essential
to political stability, while being cognizant of the rule of
law and human rights considerations.


I. Elections Assistance: Total $7.15 million


ESF can help move Nigeria toward successful elections. The
USG already has committed $2 million in FY-2001 ESF to
support the administration of elections. These funds provide
technical assistance through December 2002 to Nigeria's
Independent National Electoral Commission (INEC) and to State
Independent Electoral Commissions (SIECs) for elections
administration training. While FY-2001 funding is an
important initial contribution, a wide range of assistance is
still needed to ensure the coming elections are conducted
properly and to integrate non-partisan elections
administration into the matrix of Nigeria's political process.


International standards would call for an expenditure of at
least 60 million to fund elections preparations in Nigeria
(one dollar per estimated voter.) However, INEC was only
allocated $12 million so far (The remaining $25 million of
the FY-2002 INEC budget was reserved for infrastructure
improvements that may be needed by INEC but do not directly
prepare its staff for the actual administration and conduct
of elections nor enhance the electoral process.)


Clearly, there is a budgetary shortfall. The proposed $7.15
million in FY2002 ESF would help reduce the deficit. The
Mission has established an Inter-Agency Elections Working
Group, and in close coordination with other donors, will
implement the following assistance:


A. Consolidating INEC Election Administration and Capacity
Building. FY-2001 ESF funded voter registration database
development and training in logistics management. However,
INEC's technical capacity, while improved, remains limited
and will be seriously tested during the 2002-2003 elections.
The USG is well positioned to provide technical assistance
due to the strong relationship between INEC and the
International Foundation for Elections Systems (IFES), a key
USAID partner. FY 2002 ESF will fund the continuous
presence, through December 2003, of IFES's
internationally-recognized senior elections administration
advisor, as well as numerous training events and consultants
in specific areas of electoral administration and electoral
law reform. The senior advisor has already played an
invaluable role by providing guidance on international
electoral standards, INEC's budget submissions, conflict
management, and development of a code of conduct for
political parties. A major focus of the additional (FY 2002)
technical assistance will be monitoring implementation of
logistics plans for the 2003 elections. ESF assistance will
establish post-election mechanisms to evaluate INEC's
performance and to begin strategic planning for the 2007
elections. An aim of that strategic review would be to ensure
that elections planning becomes an integral part of normal
government operations. ($2.7 million)


B. INEC Polling Station Officers Training. FY-2002 ESF will
fund IFES preparation of a manual for the 120,000 polling
station officers who will oversee the actual voting
throughout the country, and train INEC staff to conduct
orientation workshops for these officers. These polling
station officers are temporary employees engaged shortly
before the elections. Basic orientation on policies and
procedures is needed for them to perform their critical task
of ensuring that voting at their stations is conducted
properly and fairly. Given the shortage of INEC resources,
the quality of training will be inadequate unless outside
assistance is provided. IFES has already evaluated INEC's
training resources and created a training plan by which INEC
will fund the attendance of the trainees, while IFES provides
training materials and workshop oversight. ($700,000)


C. Party Poll Agents Training: Each candidate and party is
permitted to have a representative at each polling station.
Party-affiliated observers, as well as independent observers,
are critical to keep irregularities and, thus, potentially
violent protests to a minimum. However, party observers can
add confusion if misinformed about electoral procedures.
This program element will provide manuals,
training-of-trainers, and overall coordination among the
political parties to train up to 500,000-600,000 party
agents. The International Republic Institute (IRI) will
implement this program. IRI has established relationships
with Nigerian political parties over the past two years
through its work on grassroots organizational development and
promoting women's participation in political parties. ($1.25
million)


D. Civil society and media campaigns to promote participation
and non-violence: Civil society and media activities must be
intensified for the 2003 elections. This program utilizes
Nigerian NGOs to promote civic awareness, greater public
participation in the pre-elections phase and higher voter
turnout. The other component of the program will be to
discourage the violence that has often discredited elections
in Nigeria. The project will create mechanisms to mediate
conflict and disseminate non-violence and voter education
messages. The program will be administered through a
pre-existing USAID civil society assistance program.
Individual NGOs will be selected through a proposal process
coordinated with the Transition Monitoring Group, a Nigerian
NGO coalition. ($1.3 million)


E. U.S. Election Observers: USAID will use FY-2002 ESF to
support a team of high-level election monitors from the
United States, as was done for the 1999 elections. Funds
will be provided to one or more U.S. institutions (IFES, NDI,
Carter Center, IRI) to field an observation team. Details of
this activity will be developed as interested organizations
are identified. ($400,000)


F. Media Training: Training would be provided to media
practitioners on elections procedures, ways of using and
analyzing voting data, and standards of professionalism for
media coverage of the elections. To be implemented through
IFES and USAID's civil society assistance program. ($300,000)


G. Elections Tribunals Assistance: FY-2002 ESF will provide
basic orientation on the new electoral law and on
international standards for election tribunal judges. The
program will also include a public education campaign about
the tribunals. Building effective tribunals promotes the rule
of law and peaceful resolution of elections disputes,
reducing the chance of election-related violence and
instability. The judges will be trained on the new electoral
law, given an orientation on elections procedures, and
provided access to relevant legal precedents from other
countries. This program would be implemented through a
pre-existing USAID assistance project that works with several
high courts and the National Judicial Institute of Nigeria
and includes grants to local NGOs for public education.
($400,000)


II. Nigerian Governors' Forum: $850,000


Governors are becoming important political players in
Nigeria; they control significant resources and have
established themselves as major decision-makers and agents of
influence. Their political capacity has been visible in
recent debates over the electoral law and resource allocation
(oil revenue) between state and federal governments.
Collectively, governors will play a large role in shaping
Nigerian federalism and in determining whether devolution
will advance genuine democratization and good governance. As
more resources are decentralized, the governors will need
expertise and technical assistance on financial and budgetary
management, federalism, economic policy, social services
administration, and other key issues of governance. Improved
inter-governmental relationships are needed to facilitate
federal-state coordination of fiscal policy, environmental
policy, investment incentives and other issues.


Using FY-2002 ESF to support the Nigerian Governors Forum
will give the USG influence and access to key governors while
promoting federalism and viable decentralization of power and
resources. Support to the Forum will be in the form of
limited technical assistance and equipment to establish a
secretariat in Abuja and to assist in developing an action

SIPDIS
plan to engage different levels of government on policy
issues key to decentralization, economic development and
investment. The federal-state dialogue will be helped by
providing the Federal Government a single entity with which
to confer on those issues common to the states. The project
will also focus on a long-term plan to sustain the
organization.


USAID, through its implementing partner, the National
Democratic Institute for International Affairs (NDI), has an
established relationship with the Governors' Forum that dates
back to the election in 1999. Because NDI is established in
Nigeria, assisting the Forum will be cost-effective and will
not require start-up administrative costs.


III. Labor Union Strengthening: $1,500,000


Labor unions represent the largest organized section of
Nigeria's civil society. Although weakened by years of
military rule, labor can bring the nation to a standstill by
go slows or a general strike and can block important economic
reform. Moreover, labor is important to the Nigerian oil
sector and American economic interests in that sector, as
well as the stability of the environment in which American
companies operate.


Current funding touches a wide spectrum of Nigerian
institutions but does not engage labor. Because of our lack
of contact, we have little access and influence with the
labor movement. Insufficient contact with the international
community diminishes labor's perceptions of the market
economy. Too often, Nigerian labor groups embrace statist
platforms that might have had utility during military rule
but now serve to retard reform, growth and good governance.
We must incorporate labor into our plans for economic and
political reform. If we can influence labor and enhance its
understanding and support for reform, labor can become a
voice for democratization and economic reform instead of a
brake on these objectives.


We can influence labor leadership through a project designed
to bolster the internal administration of labor organizations
as well as to augment labor's understanding of political and
economic democratization.


Major recipients of training and other capacity-building
activities will be the Nigerian Labor Congress (NLC) and the
Trade Union Congress of Nigeria (TUCN-formerly the Senior
Staff Consultative Association of Nigeria). These are the
two main national trade union umbrella organizations (NLC for
blue-collar workers and TUCN for white-collar workers).
Sector-specific unions in the oil and gas industry will also
be engaged. The program will target leaders at the state and
national level for over two years. Two-years are needed to
implement a program and is the critical period during which
labor must be convinced to play a constructive role in the
electoral process.


Activities will include basic training in economic policy for
national and state-level leaders, basic organizational and
management training, and the provision of training materials
and basic communication and information technology at several
organizational levels. After the abuses of the previous
government, there is a serious need to rebuild a leadership
cadre attuned to the nuances of economic policy as well as
the requirements of political participation in a democracy.
Additionally, women leaders will be targeted to increase
their leadership skills and improve overall representation of
women in the male-dominated labor union leadership.


This program will be implemented through a cooperative
agreement between USAID and the AFL-CIO'S Center for
International Labor Solidarity, which has had an ongoing
relationship with the NLC and TUCN for more than 30 years,
despite the difficulties imposed by sustained military rule.
This history makes it possible for the Solidarity Center to
build an extensive program of training for the newly
revitalized unions, and the proposed program has been
developed in direct collaboration between the Solidarity
Center and the two Nigerian labor centers.


IV. Addressing the Trafficking in Persons (TIP): $500,000


The illegal trafficking in persons is a growing concern in
Nigeria. While economic conditions factor heavily in the
problem, trafficking and its resultant servitude is a grave
violation of human rights. Such a practice undermines
democracy, the rule of law and the legitimate economy.
Moreover, it promotes criminality and disregard for
individual rights, particularly those of society's most
vulnerable members. As such, it is a source of both injustice
and instability.


This important program will be implemented by INL through an
international organization already working in this field,
such as UNICEF, IOM or ILO-IPEC. The GON recently created an
inter-agency committee to better coordinate federal
assistance to victims of trafficking rescued overseas and
repatriated to Nigeria. ESF funds will assist the committee
in building a nation-wide structure for short-term care and
long-term vocational training of trafficked victims in order
to minimize recidivism. Most assistance will be used to
defray non-recurring start-up costs of establishing shelters
and training centers. This will complement: 1) the
ILO-IPEC's new project ($300,000 of USDOL funds) to assist
the GON establish a National Plan of Action Against
Trafficking of Persons and expanding awareness programs among
at-risk populations; 2) the IOM's new $2.1 million project to
assist the repatriation of trafficking victims and train law
enforcement personnel; and 3) an INL project to equip and
train the small Nigerian
Police Anti-Trafficking Task Force based in Lagos.


V. Police Modernization: $2.0 million


Years of neglect during military rule left the police force
demoralized, understaffed and under-equipped. The force as
now constituted is unable to fulfill its mandate under a
civilian government. The police's failure to contain several
instances of communal violence demonstrates its institutional
and operational inadequacies, despite the current political
will within Nigeria to develop a professional force.
Moreover, too many police officers are not familiar with
criminal procedure, modern investigative techniques,
community liaison and human rights. To promote the rule of
law and engender that sense of security needed for a
democracy to function, the police needs to be modernized. A
more professional police force would have the salutary effect
of reducing the military's role in internal security and law
enforcement, a role that inevitably leads to serious
violations of human rights. A needed initial step in this
overall effort is to improve the police force's central
administration. To do its job on the
streets better, the force must first improve the way it
manages itself.


This program will be implemented by INL. Building on modest
activities begun with FY01 ESF, this project will seek to
strengthen management and administration of the Nigerian
Police Force through technical assistance ($1.25 million) and
the continued provision of organizational management training
for senior -level Nigerian Police Force managers ($750,000).
Implemented through a contractor with experience in both
organizational management and law enforcement, the project
will provide technical assistance in the form of repeated
visits by two or three short-term (60 days) advisors who will
review the NPF's management system and administrative
structure. With the agreement of NPF managers, the technical
advisors will help the Inspector General of Police and his
staff implement new procedures to increase transparency,
improve budgetary planning and allocations, encourage the
delegation of authority and feedback from subordinate
officers.


The training will be implemented by the same contractor
already working closely with the U.K. DFID "Accessible
Justice" program of assistance to the police and judiciary.
The training in advanced organizational management techniques
will seek to familiarize senior police officials with
management techniques that have proven successful for large
companies in the business and corporate world and would not
cover police operational matters (thus ESF could be used to
for this project). Several one or two week sessions of this
course will be offered at the NPF Jos Staff College.


Overall, this project will build on a joint AID-INL effort
with FY01 funds (both ESF and INC) to create an
administrative and criminal database to manage human and
material resources as well as criminal cases. As such, this
initiates a new phase in the USG's long-term police
modernization program in Nigeria.


ECONOMIC GROWTH


Corporate Responsibility Initiative
(The Niger Delta - South)


U.S. Policy Objectives and National Interests


This initiative is concentrated in the Delta region.
Promoting public/private partnerships in that area and
facilitating collaboration between the oil companies, state
governments, and local communities furthers U.S. interests in
democracy, governance, economic trade, and development. The
Delta is an important source of the fossil fuel needed to run
the U.S. economy, yet it is also an economically deprived,
politically tense and environmentally challenged region.
Social unrest and violent outbreaks happen frequently. Many
local inhabitants blame oil companies, including U.S.
entities, for this depressed situation. As elections draw
near, the political heat in the Delta will likely rise due to
this perceived inequality. U.S. interests lie in creating a
secure environment where oil companies can operate safely and
the supply of fuel to U.S. markets is not interrupted. Our
interests are best served when local communities feel they
derive some benefit from the operation of U.S.-based
companies.


A project that requires the cooperative efforts of state
governments, NGOs and the oil companies will reduce political
tension and conflict in the area. This also will help reduce
the prospect of electoral violence in the region.
Additionally, the initiative will promote human rights and
the rule of law.


For local inhabitants, U.S. companies in the Delta represent
the United States more so than the Embassy. By encouraging
corporate responsibility and best practices in the area, we
improve the image of these companies and, by extension,
improve perceptions of the U.S. among the people of the Delta
and in Nigeria overall.


The upstream oil industry provides 90 percent of total export
earnings, and, as such, is a major determinant of the
political and economic situation in Nigeria. Although
two-thirds of Nigeria's oil comes from the Delta, the region
remains one of the least developed parts of the country, with
poor roads, few clinics and schools, plus an enormous
environmental problem. Pipe-borne water comes only to the
most privileged homes. Water and soil pollution are serious
concerns -- traditional livelihoods in farming and fishing
are jeopardized in some areas. Reports of widespread
pollution, coupled with the execution of the Delta's leading
environmental activist, sparked international criticism of
the former military regime but also drew attention to the
conduct of oil companies, particularly Shell, but also
American concerns such as Chevron, Mobil, Texaco and Ashland.


Equitable distribution of the country's US$10 billion annual
oil revenues and the environmental and social (corporate)
responsibilities of the oil multinationals are issues to be
resolved.


At current rates of production, it is estimated that
Nigeria's oil reserves will be exhausted in less than 30
years. The Government therefore sees the need to diversify
and broaden the country's revenue base. One of these areas
is to exploit the vast reserves of natural gas, which
constitute the eighth largest in the world. U.S. companies,
by engaging in good community relations and having
cooperative relations with government, can position
themselves to tap into this vast supply.


However, oil or gas extraction companies will continue to
attract political criticism and be the target of occasional
unrest if the lives of residents of affected areas are not
improved. This project proposal will be an important initial
step toward defusing a volatile, potentially destabilizing
situation.


Proposed FY 2002 ESF Program
The Niger Delta (Southern Nigeria)
$5,000,000


The Embassy will foster cooperation among state governments,
local communities, the Niger Delta Development Commission
(NDDC), NGOs and oil companies. The project will provide
technical and policy assistance to state governments and the
NDDC on governance and development. It will support the
establishment and operations of conflict resolution and other
mechanisms that promote dialogue. This program aspect
involves the states and NDDC, but equally important, it
includes NGOs, local communities and oil companies. With
specific regard to the oil companies, the project will
encourage implementation of the Voluntary Principles on Human
Rights and Security while also promoting corporate
responsibility best practices.


Another focus of the project will be working with states in
the Delta that do not have strategic investment plans. The
initiative will help develop these plans. After the plans are
created, a portion of program funds will be utilized to help
attract investment and funding from domestic and
international sources for the implementation of the plans.
The program likewise will help states with existing
investment plans identify internal and external sources for
specific investments. This segment of the program will be
designed to involve governments, local communities, NGOs and
the private sector in identifying priority economic and
social development needs and developing a strategic framework
that responds to these needs. The plans, when implemented,
will increase employment, enhance the agricultural sector,
and strengthen workforce productivity through skill
development. These positive changes, in turn, will improve
the security landscape and prospects for stability and
democratization. A key element of this
ESF activity will be identifying employment possibilities for
unemployed youth in agro-processing and other income
generating activities. Providing employment opportunities
for youth is key to the political and social stability in the
Delta.


USAID will have overall management responsibility for the
activity. In that case, USAID will prepare a competitive
solicitation for a U.S. contractor or grantee to undertake
the activities described above. The successful U.S.
contractor/grantee will be required to work collaboratively
with local communities and the oil companies, as well as
provide grants to community organizations. USAID will work
closely with the corporate responsibility staff at the
Embassy to implement this activity.


ECONOMIC GROWTH


Public Private Partnership Initiative
(Northern Nigeria)


U.S. Policy Objectives and National Interests


Major urban areas in the predominantly Muslim North -- Kano,
Kaduna and Jos -- have experienced increasingly violent
communal conflicts. Other Northern areas are potential hot
spots. Many of these outbreaks have ethnic and religious
overtones but unemployment and poverty are the root causes of
these developments. A mis-directed competition for scarce
resources has produced violence not opportunity. Too many
people have no jobs and little future prospects. This makes
a segment of the population, particularly the young urban
underclass, susceptible to violence, radical solutions to
their problems and political manipulation. Many of them see
modernity as pitted against them. The number of people in
this category makes this both an economic concern as well as
a challenge to political stability in key Northern areas.


By working to develop agriculture and other labor-intensive
industries, we reduce the dry tinder that sparks unrest and
advance the U.S. objective of political stability. Moreover,
active and visible engagement in economic development will
counter the widespread perception that the USG is anti-Muslim
and anti-North. This will help mute anti-democratic and
anti-West voices in this region of the country. In light of
September 11 and the criticism of US military action in
Afghanistan that came from parts of Northern Nigeria, this
project could not be more timely. With Nigeria having the
largest Muslim population in Africa, the poverty and
deprivation in the North could become an invitation for
Islamic radicalization inimical to U.S. interests in Nigeria
and beyond.


Proposed FY 2002 ESF Program
Public-Private Partnership in Northern Nigeria $5,000,000


The same approach of partnering with the private sector and
government in the Niger Delta can be applied to northern
Nigeria. Public-Private Partnerships will help boost exports
and expand employment opportunities, particularly in the
agricultural sector. The program objective is to facilitate
domestic, U.S. and third country investment in northern
Nigeria's agribusiness and its not insignificant but
under-utilized industrial base. By helping to lay the
groundwork for investment, the program will contribute to
capacity-building in policy, technological know-how and
agriculture grades, standards and regulations. Export crops
such as ginger and cotton will be considered for investment
partnerships, although the final selection will be based on
the ongoing survey of agricultural competitiveness. The
garment industry and leather works, including
shoe-manufacturing, are other areas of possible attraction.


Another partnership proposal involves establishing an
Information and Communication Technology (ICT) Center in one
of the northern states. Demand for the ICT will grow as a
result of other USAID initiatives in agriculture, small and
medium enterprise (SME) development and environmental
protection. The ICT will assist in implementing best
practices and facilitating the flow of information among
partners. Partnerships are envisaged under this component
with the Virtual University, State Governments and
institutions of higher learning in the North. Funding will
be leveraged with other public and private sources; the state
chosen would be expected to allocate a building for this
activity. This prototype, if successful, could be duplicated
by other states.


USAID/NIGERIA will prepare a competitive solicitation for the
U.S. contractor or grantee to undertake the
activities described above. The contractor/grantee will be
required to work with local communities and the private
sector as well as provide small grants to community
organizations


ECONOMIC GROWTH


Anti-Corruption Program in Nigeria


U.S. Policy Objectives and National Interests


Direct investment in non-oil sectors is key to job creation,
poverty reduction and ultimately to political stability.
However, the current environment of corruption and lack of
transparency deter U.S. investors in these sectors. To
promote U.S. investment in Nigeria, we need to help Nigeria
level the playing field for participants in the economy.
Part of this effort will include building capacity to fight
transnational crime, including money laundering, in support
of post-September 11 U.S. priorities.


Corruption permeates all levels of Nigerian society.
Governmental corruption impedes transparency, retards
efficient deliver of public services and undermines
confidence in democracy. Cognizant of these problems,
President Obasanjo has demonstrated commitment to combating
public sector corruption through the establishment of the
Anti-Corruption Commission and the Independent Corrupt
Practices and Other Offences Commission (ICPC) as well as the
institution of value-for-money audits and due process for all
federal government capital expenditures.


USAID is currently funding, in collaboration with the World
Bank, a comprehensive survey, which will provide detailed
information on corruption in the country. This information
will be used to educate and inform federal, state and local
governments, as well as civil society in an effort to build a
constituency to combat corrupt misconduct.


Proposed FY 2002 ESF Program
Anti-Corruption Projects
$1.0 million


A. Public Sector Audit and Oversight:


Based on analysis of other donor activity and an assessment
of institutional comparative advantages, the U.S. Mission
recommends a series of initiatives over the short- and
long-term that build on ongoing efforts. Project activities
will lie mainly in three areas: a) public sector assessment
and training for internal auditing and oversight; b) ethics
in public service; and c) promotion of civil society
involvement in anti-corruption efforts.


Casals and Associates, an U.S. contractor, will carry
out this work. They are presently implementing the USAID/WB
Corruption survey.


B. Independent Corrupt Practices Commission: $500,000


This one-year project will assist the ICPC strengthen its
investigating and prosecutorial capacities. The one year-old
Commission is expanding, has hired staff members, and has
opened new offices outside Abuja. Building on an initial
allotment of $455,000 in FY01 ESF, this project will expand
technical assistance to the ICPC's investigative and
prosecutorial arms, with the objective of boosting the
Commission's capacity to combat high-level corruption.
Through a study of improved internal procedures and
regulations and an exchange with officials from successful
anti-Corruption agencies in Hong Kong and Singapore, this
project will augment the Commission institutionally. A
substantial portion of this project will provide training in
Nigeria for newly hired ICPC investigators and prosecutors.
Some ICPC managers will be given advanced training
opportunities in the United States. Provision of basic
investigative equipment - such as digital recording devices
and computers - will be included.


The Department of Justice's Overseas Prosecutorial
Development and Training (OPDAT) program and the Department
of Treasury's Office of Technical Assistance (OTA) will
implement this jointly. INL's Regional Narcotics and Law
Enforcement Office (RNLEO) in Nigeria will monitor and report
on the project's effectiveness.


ECONOMIC GROWTH
Strengthening Economic Policy Making


U.S. Policy Objectives and National Interests


Open markets and increased U.S. investment will spur economic
development and help sustain democratic progress, foster
expanded trade, and foster a healthier economy which, in
turn, helps safeguard essential U.S. energy interests in
Nigeria. Mission goals are to strengthen the institutional
capacity of the Nigerian Government to plan and implement
economic reform, repair mismanaged institutions, and promote
prudent fiscal and monetary policy, with the cooperation of
the international financial institutions and donor community.
This will bolster Nigeria's macro-economic situation and
promote political stability. It will also enhance Nigeria's
role as a catalyst for growth in the West African sub-region.
Moreover, neighboring states will be further encouraged
toward economic reform if an economy as vast as Nigeria's can
be reshaped and energized.


Nigeria is undergoing the slow process of economic and
structural reforms. Privatization, deregulation,
diversification away from hydrocarbons and improvement of the
overall legal and regulatory environment governing foreign
investment are key issues. As part of the reform agenda,
Nigeria is developing a Poverty Reduction Strategy Paper
(PRSP) in cooperation with the international donor community,
and as a condition of its engagement with the IMF. The PRSP
will enable Nigeria to rationalize resource allocation and
establish priorities for long-term development. However, the
GON lacks the capacity to collect and analyze data needed to
develop this strategy.


Current USAID programs support the national privatization
program and economic policy coordination through direct aid
to the Bureau for Public Enterprises and the Economic Policy
Coordinating Committee, respectively. USAID has also
contributed to an assessment of tariff policy and structure.


Proposed FY 2002 ESF Program
Strengthening Economic Management $1,500,000


The Government of Nigeria (GON) needs to establish its broad
direction for policy, complemented by the development of
sectoral and multi-sectoral strategies. The recent expiry of
the IMF Stand-By Arrangement was partly because no office in
the GON was tasked with tracking compliance with IMF targets.
The recently appointed Chief Economic Advisor now has been
tasked with this responsibility and has requested assistance
in building a team of well-trained economists able to collect
and analyze data and write strategy and policy papers on
reform. In coordination with other donors, we will assess
the utility of supplying equipment such as computers,
software and internet access to the Federal Office of
Statistics, which falls under the purview of the Chief
Economic Advisor. Much of the training can be conducted
through Nigerian universities and institutes at very
competitive costs.


With more capacity, the Office of the Chief Economic Advisor
can play a key role in:


--Advocating the reduction of barriers that inhibit free and
fair trade.
--Arguing for enhanced intellectual property rights
protection.
--Urging the growth of the non-hydrocarbon export sector, to
take advantage of Nigeria's vast mineral and human resources,
and to tap into the benefits offered by the Africa Growth and
Opportunity Act (AGOA).
--Seeking compliance with the IMF's informal program.
--Developing Nigeria's Poverty Reduction Strategy Paper.
--Achieving macroeconomic stability, through economic and
structural reforms, enabling U.S. direct investment.
--Restructuring the Joint Economic Partnership Committee
(JEPC) as a mechanism to promote economic reform and
liberalization of trade.


USAID/Nigeria will prepare a competitive solicitation for a
U.S. contractor or grantee to undertake the activities
described above. The successful U.S. contractor/grantee will
be required to work collaboratively with the GON, state and
local governments and the private sector.
Jeter

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