Cablegate: Nigeria: Submission for 2004 President's Report On

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 000290

SIPDIS

STATE PLEASE PASS TO USTR BILL JACKSON

E.O. 12958: N/A
TAGS: ETRD EINV ELAB ECON PREL NI AGOA USTR
SUBJECT: NIGERIA: SUBMISSION FOR 2004 PRESIDENT'S REPORT ON
AGOA

REF: (A) STATE 23970, (B) 03 Abuja 2184

1. (U) Per ref A, Post provides the following update to the
2003 President's Report on AGOA.

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AGOA Trade and Investment
-------------------------

2. (U) Nigeria has not capitalized on African Growth and
Opportunity Act (AGOA) benefits to a discernible degree.
Nigeria's duty-free exports to the United States under AGOA
consist almost exclusively of petroleum products, which
would be the same even without AGOA. Mission personnel have
organized seminars and press briefings and provided support
for the West Africa Trade Hub's opening of an AGOA resource
center in Lagos, but despite these efforts and public
interest in AGOA, the Act has generated very little new
trade or investment. The Mission has received no answer to
date on its proposal for a program to improve the climate
for U.S. private investment in Nigerian industries that
might export to the U.S. under AGOA (ref B).

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Market Economy/Economic Reform/
Elimination of Barriers to U.S. Trade
-------------------------------------

3. (U) Nigeria has made incremental progress toward
establishing a market-based economy. The GON announced it
would deregulate fuel prices in late 2003, but stiff public
resistance has all but stopped the initiative. GON
officials announced their intention of privatizing the
Petroleum Product Marketing Company, which buys and sells
both domestic and imported fuel and petroleum products, and
said plans to privatize Nigeria's four state-owned oil
refineries would continue. The GON has repeated its
commitment to privatizing the National Electric Power
Authority and Nigeria Telecommunications Limited, but the
process has suffered frequent setbacks.

4. (U) Progress toward eliminating barriers to U.S. trade
has slowed considerably. Trade policies and tariff rates
tend to change suddenly and arbitrarily, and violations of
WTO prohibitions against certain non-tariff trade barriers
continue. The GON maintains a long list of banned imports
and in January 2004 added more than forty items, including
plastics, textiles, detergents, and meat products, to the
list. The GON drew up the list without the required studies
to justify the bans. Notoriously congested ports and long
delays in clearance procedures present additional barriers
to U.S. trade.

5. (U) Improvements in intellectual property rights (IPR)
protection have also been sluggish. Nigeria is party to
numerous IPR conventions and agreements, and laws favor
intellectual property owners and impose criminal penalties
on IPR violators. The GON has introduced legislation to
create a quasi-independent IPR commission and bring Nigeria
into full compliance with the WTO TRIPS agreement. Patents,
trademarks, and copyrights are better protected now than
they once were, but software and DVD piracy remains rampant
even though the market for legitimate products is very
small. Scarce resources and a lack of expertise continue to
make IPR enforcement difficult.

--------------------------------------------- --
Rule of Law/Political Pluralism/Anti-Corruption
--------------------------------------------- --

6. (U) Nigeria continues to be one of the world's most
corrupt countries, second only to Bangladesh in Transparency
International's 2003 Corruption Perceptions Index. Some
officials see government service as a path to personal
enrichment, and companies continue to report that doing
business without paying bribes puts them at a distinct
disadvantage. The GON is putting together an ambitious
program for combating corruption and has established a
federal anti-corruption commission and other institutions to
tackle the issue. Thus far, their results have been meager,
but progress is evident in the reversal of some procurement
contract decisions. Future work with the GON under Evian,
including the Extractive Industries Transparency Initiative,
may help reduce the most blatant forms of corruption, but
for now corruption remains endemic.

7. (U) Civil and criminal cases move through Nigeria's
courts at a snail's pace. The country's judicial system is
not always independent, and it generally lacks the resources
and administrative capability to function effectively. Low
levels of public confidence have contributed to the adoption
of criminal codes based on Shari'a (Islamic law) in 12 of
Nigeria's northern states. Surprisingly, the Supreme Court
and appellate courts command respect, and the former
continues to assert its role as the final arbiter of
disputes.

8. (U) Nigeria's politics are becoming increasingly
competitive, but problems remain. Thirty parties, up from
three in 1999, presented candidates in Nigeria's April 2003
state and national elections (the second elections since the
country's 1999 return to democracy), but the contests were
marred by what domestic and international observers
perceived as widespread fraud. The leading opposition
party, the All Nigeria People's Party, filed a lawsuit to
have President Obasanjo's victory overturned, but the Court
of Appeals has yet to deliver a ruling. Expected local
elections, meanwhile, have not been held.

9. (U) Ethnic and religious tensions pose additional
challenges to GON efforts to establish the rule of law and
political pluralism. Communal clashes have resulted in
numerous injuries and deaths, and Nigeria's under-funded,
under-trained and under-equipped police force is often hard-
pressed to stop or prevent violence. The Nigerian military
has managed to calm some particularly violent areas, but
looting and indiscriminate killing have marred its efforts.

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Poverty Reduction
-----------------

10. (U) The GON promised far-reaching reforms in its mid-
2003 economic plan, the National Economic Empowerment and
Development Strategy, but details have yet to be released.
The plan outlines strategies for attaining macro-economic
stability (with emphasis on low inflation and stable
interest and exchange rates), achieving annual GDP growth of
5-7 percent, and reducing poverty. Skeptics point out that
the plan is the third in a series of poverty reduction
programs introduced over the last four years and note that
none have had noticeable effects on the two-thirds of
Nigerians living in poverty. Key indicators show that
poverty is actually increasing.

11. (U) The GON promotes the development of private
enterprise through its Small and Medium Industries Equity
Investment Scheme, under which banks are required to set
aside 10 percent of before-tax profits for equity
investments in industrial enterprises, but the program has
been only moderately successful. Of the $150 million set
aside by December 2003, only thirty-five percent had been
invested.

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Labor/Child Labor/Human Rights
------------------------------

12. (U) Nigerian law outlaws forced or bonded labor and
restricts the employment of children younger than age 15 to
home-based agricultural or domestic work for no more than 8
hours per day. Minimum wages, hours of work, and general
health and safety provisions are statutorily mandated, but
enforcement remains weak. The private sector's reliance on
casual or part-time labor is a problem, particularly since
casual workers are denied benefits and prohibited from
joining labor unions. The GON has been slow to address the
issue, but increasingly loud protests from Nigerian workers
may prompt progress.

13. (U) The GON's human rights record has improved, but
serious problems remain. Security services all too often
fail to protect the rule of law, particularly in rural
areas, and human rights violators are rarely held
accountable for their actions.

ROBERTS

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