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Cablegate: Nigeria: Economic Roundup May 16

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

UNCLAS SECTION 01 OF 02 ABUJA 000910

SIPDIS


STATE FOR AF/W
STATE PASS OPIC, TDA, AND EXIM
STATE PASS USTR AND DOT
COMMERCE FOR ITA/MAC


E.O. 12958: N/A
TAGS: ECON ETRD EINV EAIR NI
SUBJECT: NIGERIA: ECONOMIC ROUNDUP MAY 16

REF: A. ABUJA 576
B. ABUJA 440


1. This periodic economic report from Abuja and Lagos
includes:
--GON Approves World Airways
--Ministry of Aviation Launches Nigerianglobal
--Nigeria Bans Ice Cream Imports


GON Approves World Airways
--------------------------
2. Minister of Aviation Kema Chikwe announced at an April 10
press conference that U.S. carrier World Airways had been
approved to begin charter service between Lagos and New York,
Atlanta, and Houston. World Airlines had hoped to begin
flying in March but experienced difficulty securing landing
rights (Ref A). Minister Chikwe attributed the delay in
approval to the Ministry's desire to perform "due diligence"
on the airline. World Airways would be the first American
carrier to establish direct service under the 1999 Open Skies
Agreement. With Nigeria Airways not now flying, the new
service would be the only direct passenger and air cargo link
between the United States and Nigeria.


3. Chikwe had written the Ambassador April 16 stating that
Nigeria had approved World Airways to operate flights in and
out of Nigeria. However, the letter also said "a technical
and economic assessment of the airline and its Nigerian agent
would be undertaken by the Nigerian Civil Aviation Authority
(NCAA) to facilitate the commencement of operations." A
diplomatic note dated April 28 conveyed the same information.


4. We replied to clarify that the terms of the Open Skies
Agreement give the sending country the authority to designate
an airline; the role of the receiving country is to grant
operating authority with minimum procedural delay.


5. On May 15, Minister Chikwe told the Ambassador and then
announced to the media at an event to mark a U.S. donation of
security equipment to Nigeria that World Airways had been
approved and there were no further requirements for World
Airways to begin service. She said the letter informing us of
additional requirements was sent in error. World Airways is
set to make its inaugural flight to Lagos on May 29,
inauguration day in Nigeria.


Ministry of Aviation Launches Nigerianglobal
--------------------------------------------
6. The Ministry of Aviation signed an agreement with Swiss
firm Triaton AG to operate a new airline called
Nigerianglobal. The airline, slated to begin operations late
this month, would assume the international routes of Nigeria
Airways. We have not received formal word whether
Nigerianglobal intends to serve the United States. However,
Triaton's business proposal indicates the company plans to
fly all Nigeria Airways routes, including flights to the
United States.


7. Comment: This is the second time in less than a year that
Minister Chikwe has tried to create a new national carrier.
In 2002, a controversial deal with a U.K.-based firm to form
a new airline from Nigeria Airways' liquidated assets failed
after the National Assembly and the Bureau of Public
Enterprises, alleging a lack of transparency and that the
Minister had outstripped her authority by unilaterally
approving the deal (Ref B). The Nigerianglobal deal may face
the same stiff opposition, including from labor unions
seeking compensation for Nigeria Airways employees. However,
President Obasanjo reportedly favors Nigeria having a
state-owned "national carrier," so some carrier is likely to
be established. End Comment.


Nigeria Bans Ice Cream Imports
------------------------------
8. Director General of the National Agency for Food and Drug
Administration and Control wrote FAS in Lagos on May 2 that
ice cream imports would be banned. The letter said that
"edible ices are delicate products requiring special
handling" and that "international standards on edible ices
have been abolished." Therefore, the agency "has discontinued
the registration of edible ices." The letter concludes:
"Interested companies have been advised to set up local
factories for the production of edible ices for the ease of
monitoring and compliance with national standards." (Note: In
2002, the United States exported $144,000 in ice cream to
Nigeria. The makers of "Blue Bunny" ice cream, a brand
popular in the midwest United States and in Nigeria as well,
have plans to operate a factory in Nigeria. No timetable for
the proposed investment is available. End Note.)
JETER

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