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Cablegate: Nitel Strike Ends June 19

VZCZCXRO5210
PP RUEHMA RUEHPA
DE RUEHOS #0874 1711607
ZNR UUUUU ZZH
P 201607Z JUN 06
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC PRIORITY 7427
INFO RUEHZK/ECOWAS COLLECTIVE PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY

UNCLAS LAGOS 000874

SIPDIS

SENSITIVE
SIPDIS

DOL FOR ANNE ZOLLNER
STATE FOR DRL LAUREN HOLT

E.O. 12958: N/A
TAGS: ECPS ELAB ECON ETRD EINV PGOV NI
SUBJECT: NITEL STRIKE ENDS JUNE 19

REF: ABUJA 1517

1. (U) On June 19, employees of Nigeria's state-owned
telecommunications company, Nigeria Telecommunications
Limited (NITEL), resumed work after a two-week strike.
Landline and cellular telephone service in Abuja and Lagos
has returned to its normal, albeit uneven, quality. National
Association of Telecommunication Employees (NATE) President
Charles Amakwe confirmed the strike was officially over and
that the federal government had released naira 2.4 billion
(USD 18.5 million) to NITEL management for overdue salaries
and naira 642 million (USD 4.9 million) for overdue furniture
allowances.

2. (U) Amakwe told Econoffs on June 19 that NATE killed the
strike on June 15. However, the message had not reached all
members. Thus, many workers did not return to work until
June 19 when word of the strike's termination finally reached
them.

3. (U) NATE ended the strike because NITEL management
promised no retaliation against employees who went on strike
and that a Debt Recovery Committee would be established to
enable Private Telecommunication Operators (PTOs) to pay
NITEL up to naira 6.4 billion (USD 49 million) in overdue
interconnectivity fees. These fees would be used to pay
NITEL workers. Amakwe said the Committee is headed by F.A.
Adekunle, General Manager of the Investment and Treasury
Company and long-time NITEL employee, whom his labor union
trusts. Although the workers did not receive full payment of
overdue salaries as NATE demanded (reftel), Amakwe believed
NITEL management did not have any additional funds available
to pay worker salaries. It would be "unrealistic" to demand
more than NITEL had in its coffers. Amakwe said NATE was
satisfied with the partial payment, and that his group
expected PTOs, over some time, to cover the remaining amount
owed to workers through the Debt Recovery Committee. He said
NATE would monitor the payment of salaries, and might call
another strike if the federal government reneged on its
promises.

4. (SBU) Comment. This strike has cost the Nigerian telecom
sector billions of naira in lost revenue. With controversy
surrounding NITEL's privatization bid, some argue this strike
was intended to further complicate the privatization. NITEL
workers fear privatization may occasion job loss. Thus, they
are not fans of the exercise. In striking, they might have
made some potential bidders more reticent but they also might
have helped lower NITEL's value. This diminution could
perhaps make it easier for the less skittish bidder, such as
the President's favorite, Transnational Corporation of
Nigeria (see septel), to acquire the company. End comment.
BROWNE

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