Cablegate: Nigeria: Bi-Weekly Pol/Econ Updates for October 1-15,

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E.O. 12958: N/A
TAGS: PGOV KDEM ECON EPET EFIN MOPS PHUM NI
SUBJECT: NIGERIA: BI-WEEKLY POL/ECON UPDATES FOR OCTOBER 1-15,
2008

1. (U) The Following is a joint Embassy Abuja, ConGen Lagos
compilation of October 1-15 political/economic highlights, which did
not feature in our other reporting, covering:

--Economic and Business
--Oil and Gas
--Politics
--Delta Kidnappings

Economic and Business News
--------------------------
2. (U) INTEREST RATES FOR BANKS: At the beginning of October, the
CBN published commercial bank lending and deposit rates on its web
site. Of the 24 banks, Diamond Bank provides the highest interest
rates on deposits at 15.75%, while the UBA has the lowest rate at
4.66%. For lending, bank interest rates vary by sector and are as
high as 28%.

3. (U) SOVEREIGN WEALTH FUND: As reported in the press at the
beginning of October, the Minister of Finance, CBN Governor and the
President's Chief Economic Advisor jointly submitted a draft
proposal for a sovereign wealth fund to the President, after a year
of deliberations. The fund would divert a percentage of GON's
revenues to be invested in international markets, providing a
cushion when oil prices fall. Establishment of such a fund would
likely have to be embedded in the Constitution.

4. (U) SENATE AUDITS FEDERATION ACCOUNT: On October 6 the Senate
requested the Auditor-General of the Federation to audit the
Federation Account fund for disbursements between 1999 and 2007.
The audit will focus on cash flow to all federal agencies.

5. (U) DEBT MANAGEMENT DEPARTMENTS OPEN IN 31 STATES: On October 2,
the federal Debt Management Office (DMO) disclosed that 31 states
have established Debt Management Departments (DMDs). The
Director-General of the DMO, Agraham Nwankwo, reported that all
states agreed to establish DMDs but these are currently at various
stages of formation. Most of the DMDs are operating under the State
Ministries of Finance while some are housed in the state governor's
office.

6. (U) NCS COLLECTED $1 BILLION FROM IMPORT TAXES SINCE 1999: On
October 8 the Deputy Comptroller General of the Nigerian Customs
Service (NCS) announced to the Ad-hoc Senate Committee on the
Investigation of the Transportation Sector that NCS collected over
120 billion Naira ($1 billion) from import duty taxes from 1999 to
present.

7. (U) PANALPINA LEAVES NIGERIA: On October 2, Worldwide Premier
Logistics and Solutions Nigeria (WPLSN), Limited took over the
business operations of Panalpina World Transport Nigeria Limited, a
multi-national freight company. According to press reports
Panalpina officials engaged in unethical practices, including
bribing Nigerian Custom officials. Panalpina was heavily involved
in supporting the oil and gas sector.

8. (U) FRANCE AND NIGERIA SIGN MOU ON ELECTRICITY: On October 8,
Nigerian Minister of State for Energy (Power), Fatima Ibrahim and
French Minister of State for Foreign Trade, Anne-Marie IDRAC, signed
a Memorandum of Understanding (MoU) to boost electricity supply in
Nigeria. Press reports on the terms of the MoU indicate that the
GON "will engage the French national transmission system, Reseau de
Transport d'Electricite (RTE) in a discussion on the possibility of
conducting an audit of the power sector in order to establish the
necessary interventions required for a speedy restoration of
capacities in the generation, transmission and distribution of
electricity in Nigeria." The Minister of State for Energy
underscored that the MoU was important in the furtherance of
adequate and reliable electricity supply for socio-economic
development of the country.

9. (U) GON RECEIVES WORLD BANK URBAN DEVELOPMENT GRANT: On October
6, World Habitat Day, Minister of State for Environment, Housing and
Urban Development Chuka Odom reported that the GON received a $110
million grant under the World Bank Community Based Urban Development
Project to invest in critical urban infrastructure in eight states.
He explained that the grant was part of the Ministry's involvement
in several international bilateral and multilateral programs
directed at urban infrastructure development.

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10. (U) SCHOOL CHILDREN ABSENCES HIGH IN NORTHERN NIGERIA: During
the Northern Nigeria Economic and Investment Summit in Abuja on
October 13, Minister of Finance Shamsudeen Usman quoted a World Bank
statistics figure that Northern Nigeria has the highest rate of
children not enrolled in schools. Usman said he holds northern
Nigerian leaders responsible and called for experienced and educated
retired northerners to get involved with education.

11. (U) NORTHERN NIGERIA ECONOMIC AND INVESTMENT SUMMIT:
Participants at the October 13 Northern Nigeria Economic and
Investment Summit in Abuja also blamed the poor economy for the lack
of peace in central parts of Nigeria. The Summit was poorly
attended by State Governors. Of the 19 Northern leaders only Bauchi
State Governor Alhaji Isa Yugunba and Zamfara State Governor Alhaji
Ibrahim Shinkafi were present. According to press reports, the
Sultan of Sokoto, who attended the conference, called for the
political will to reposition the North, stating, "The North, in the
past, created wealth and this must be repeated." He challenged the
Summit to revive the textile and groundnut industries.

Oil and Gas
-----------
12. (U) PETROLEUM CONTRACTOR TRADE SECTION FORMED: Oil service
companies have banded together as the Petroleum Contractors Trade
Section (PCTS) of the Lagos State Chamber of Commerce. Like the Oil
Producers Trade Section (OPTS), the group will represent members'
interests to Nigeria's federal and state governments. Steve Fulgham
of Schlumberger is head of PCTS.

Political News
---------------
13. (U) FORMER GENERAL BUHARI PRESSES HIS CASE: On October 2, The
Guardian Newspaper reported that retired General Muhammadu Buhari
said he will not withdraw his case from the Supreme Court despite
pressure from the ANPP because his campaign represented both the
ANPP and seven additional political parties. Rumors continue to
circulate regarding the Supreme Court's upcoming decision; on
October 2 SaharaReporters claimed that their sources revealed that
President Yar'Adua had worked out an understanding with the Court to
uphold his election. On October 3 the Daily Trust and ThisDay
reported that Yar'Adua's Special Adviser on Media and Publicity,
Olusegun Adeniyi said "Buhari was swimming against the tide as far
as his case against the president was concerned, as he had not only
a weak case, but had also lost the backing of his political party on
which he contested the election." However, Adeniyi added that
Buhari is known for his integrity, has a lot to contribute to
Nigeria, and will not be ignored by Yar'Adua after he wins the case.
Following these reports, the Action Congress (AC) issued a
statement cautioning the President against predicting the decision
of the Supreme Court, calling the President's statements dangerous
and contributing to cynicism among Nigerians on whether the courts
can act independently.

14. (U) MINISTERS AND AIDES UNDER SURVEILLANCE: On October 6, a week
after aides within the Executive Branch were administered an oath of
secrecy, the Punch Newspaper reported that ministers and aides to
the President and Vice President were "panic stricken" following
suspicions that their telephone lines may be bugged. The Punch
quoted an aide as saying, "Since the day they administered the oaths
of secrecy on us, we have been placed under special surveillance."

15. (SBU) EFCC DETAINS STATE OFFICIALS: On October 6, the Economic
and Financial Crimes Commission detained the Secretary to the State
Government of Rivers State, Magnus Abe, and the Chief of Staff to
Rotimi Amaechi, the Governor of Rivers State, Nyeson Wike. Mr. Abe
was released after 48 hours, but Mr. Wike was charged with diverting
5 billion Naira ($43 million) in public funds to personal accounts.
He was granted bail by a court in Abuja for 50 million Naira ($427,
350); hearings will continue later this month. Wike, Abe and
Governor Amaechi have denied all wrong-doing on the part of Rivers
State Government officials, but the Movement for the Emancipation of
the Niger Delta (MEND) was quick to issue a statement claiming: "The
recent revelation by the Economic and Crimes Commission (EFCC) of
huge financial crimes by top government functionaries in the Rivers
State government...just confirmed what MEND has always known."

16. (SBU) THE SOURCE OF PROBLEMS IN THE DELTA REGION: Ebruke Esike,
Executive Director of Global Peace Development, an NGO based in

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Delta State, told ConGen Lagos Poloff on October 10, that the source
of all problems in the Niger Delta is the absence of credible
elections. He claimed, "if we had elections, these crooks wouldn't
be in power." Esike claimed that these unelected governors created
the militants and keep them alive by paying them off. What is
happening in Rivers State is simply a "clash of titans" as Governor
Rotimi Amaechi tries to replace his predecessor's militants with his
own followers. In Delta State, Governor Emmanuel Uduaghan allegedly
pays the primary militant, "Tom Polo," six million Naira ($51, 200)
monthly to keep quiet, but if the same money were invested in
infrastructure it would not be necessary to make pay-offs, Esike
argued. According to Esike, the rank-and-file militants see little
more than 200 Naira (less than $2) a month and would give up the
life in the camps for a job paying more than that. As Esike put it:
"a military leader without followers is nobody, so the problem of
militants would go away if there were sufficient infrastructure to
start creating jobs."

Delta Kidnappings; No Americans Involved
----------------------------------------
17. (U) BRITISH HOSTAGE RELEASED: On October 4, a British citizen
taken from his home in Port Harcourt on Sept. 15 in what appears to
have been a purely criminal kidnapping, was released.

18. (U) FILIPINO HOSTAGES RELEASED: In a separate incident on
October 4, gunmen kidnapped five Filipino workers from the MV Avero
during an attack on the oil service vessel three nautical miles from
the Bonny Fairway Buoy. A speedboat carrying twelve gunmen attacked
the vessel and took six hostages, including the boat's captain and
two engineers. No group has claimed responsibility for the attack,
but the Filipinos were released October 13.

19. (U) NIGERIAN HOSTAGES RELEASED: On October 5, the Movement for
the Emancipation of the Niger Delta (MEND) issued a statement that
it had released 19 Nigerians kidnapped from an oil supply vessel the
H.D. Blue Ocean on September 9. (Note: Two South Africans taken at
the same time were released September 13.) MEND claims to be
holding the remaining five captives (two Britons, a Ukrainian, and
three Nigerian cooks) for "security concerns" described as "the
threat of an ambush by the Joint Task Force JTF, on the
Niger-Delta."

20. (U) FISHING TRAWLERS SEIZED: On October 16, eight fishing
trawlers were seized by armed men while trawling off Bayelsa State.
All 96 crew members were taken hostage. Although the incident was
reported to the Nigerian Navy, they claimed "not to have
jurisdiction."

21. (U) PIRATES ATTACKS OFF NIGERIA'S COAST: Pirates attacked three
ships off Bayelsa State on October 25. The first ship was under
contract to Addax. Ten French and Nigerian nationals were taken and
released the same day. Second ship, reportedly under contract to
Total, escaped with bullet holes in the hull. No hostages were
taken. Third vessel was unidentified. Pirates reportedly robbed
crew of cell phones and valuables. No Americans were involved in
these attacks.

SANDERS

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