Cablegate: Nigerian Nuggets -- December 4, 2009

VZCZCXRO8188
PP RUEHMA RUEHPA
DE RUEHUJA #2198/01 3381746
ZNR UUUUU ZZH
P 041746Z DEC 09
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 7674
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHOS/AMCONSUL LAGOS 2444
RHMFISS/HQ USAFRICOM STUTTGART GE
RHEHNSC/NSC WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHDC

UNCLAS SECTION 01 OF 03 ABUJA 002198

SENSITIVE
SIPDIS

STATE FOR AF/FO, AF/W, AF/RSA, DRL, INR/AA;
USAID FOR AFR/WA (DALZOUMA)

E.O. 12958: N/A
TAGS: PGOV PREL ECON EAIR EPET NI
SUBJECT: NIGERIAN NUGGETS -- DECEMBER 4, 2009

REF: ABUJA 02027

1. (U) Mission Nigeria provides the following compilation of
recent political, economic, and social developments not
previously reported.

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SGF PRAISES DELTA AMNESTY
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2. (SBU) Permanent Secretary Ambassador Chike Alex Angigbo,
speaking on behalf of his boss, Secretary to the Government
of the Federation Alhaji Yayale Ahmed, praised President's
Yar'Adua's action on Niger Delta amnesty during a November 25
stakeholders' roundtable on "Enhancing Positive Engagement of
Non-State Actors," sponsored jointly by Presidential Special
Advisor on Relations with Civil Society and the European
Union (EU). He declared that "militants can turn their lives
around and become fruitful to society." Referring to his
own experience, he said, "I used to fight the GON, but today
I am serving at the highest position in the GON." The
speaker asserted that, since amnesty began, crude oil
production has increased.

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GON CONSIDERS CLOSING DIPLOMATIC MISSIONS
-----------------------------------------

3. (U) Presidential Advisory Council on International
Relations Chairman Chief Emeka Anyaoku recently announced
that the Nigerian Government (GON) plans to close ten
diplomatic missions due to inadequate funding. Various
observers, including editorial writer Akinterinwa in the
November 29 edition of "This Day," criticized the plan,
arguing that "diplomatic reductionism" could seriously
undermine Nigeria's long term foreign policy interests. He
noted that closing ten missions, which would only save about
20 million dollars, would be inconsistent with Nigeria's
declared commitment to raising African cooperation and
assistance, undermine Nigeria's ability to engage in global
politics, and narrow career opportunities for Nigerian
Foreign Service Officers.

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NIGERIA LAGS IN POINT OF SALE TRANSACTIONS
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4. (U) Interswitch Nigeria CEO Mitchell Elegbe said at the
December 1 Lagos Business School monthly meeting that 1.2
billion naira (about $8 million) worth of e-payment
transactions have so far taken place in 2009. Automated
Teller Machine (ATM) transactions account for 80 percent of
these transactions, while on-line and point of sale (POS)
terminal business make up 20 percent. He said Nigeria only
has 10,000 ATMs and opined that the recent directive by the
Central Bank of Nigeria for banks to stop deploying ATMs
outside bank premises will further impede the already slow
growth of ATMs, first introduced in Nigeria in 2002. Many
bank customers restrict use of ATM cards, though convenient,
because of rampant e-payment fraud. Nigeria has 27 switching
companies mostly focused on banking solutions. Merchants
restrict the use of POS devices because they do not want to
miss out on the "tips" they receive when a customer pays cash
and the merchant appears not to have change -- a common
occurrence in Nigeria. With POS, only the exact amount is
transmitted, omitting any "tip." Elegbe said Interswitch
plans to expand its payments solutions to other sectors, such
as transportation (toll fees), health, and education.

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DELTA AIRLINES CODE-SHARES WITH NIGERIAN EAGLE
--------------------------------------------- -
Q-------------------------------------------- --

5. (U) Local media reported on December 1 that Delta airlines
entered into a code sharing arrangement with Nigerian Eagle
(formerly called Virgin Nigeria) in response to Arik's new
service from Lagos to New York. Flights from Atlanta to
Lagos and New York to Abuja will link up with regional
Nigerian Eagle flights. According to local press, Nigerian
Eagle also announced a code-sharing arrangement with
Ethiopian Airlines.

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ABUJA 00002198 002 OF 003

REAL ESTATE PRICES DROP IN LAGOS, RISE IN ABUJA
--------------------------------------------- --

6. (U) Real estate prices dropped an average of 17 percent on
both Ikoyi and Victoria Islands during 2009. Luxury
apartment rents decreased 17 percent, while detached housing
decreased 40 percent, according to a local financial analyst.
A housing deficit of 16 million units exists, mostly for the
middle- and lower-middle class. Most, if not all, new
construction on Ikoyi and Victoria Islands involve luxury and
upscale accommodations. Infrastructure limitations,
especially roads and essential public works, and mortgage
reform remain key obstacles to meeting this deficit.
Industry observers expect the sector to rebound in 2010. In
contrast, according to local press, the cost of housing in
the Federal Capital Territory continues to rise. House
hunters say properties are available, but the high costs and
the expectation to pay the rent for two years up-front pose
major deterrents.

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AFRICA FINANCE CORPORATION FACELIFT
-----------------------------------

7. (U) Africa Finance Corporation (AFC) announced November 30
that Adebayo Ogunlesi has been appointed its new chairman,
replacing former Central Bank of Nigeria (CBN) Governor
Charles Soludo. As a former Credit Suisse Investment Banking
Division Executive Vice Chairman, Ogunlesi was an attorney
with a New York law firm and served as a law clerk to U.S.
Supreme Court Associate Justice Thurgood Marshall from 1980
to 1981. Industry watchers see the AFC's choice of Ogunlesi
as an attempt to improve its image as a multilateral finance
institution. The AFC has suffered controversies, including
its establishment through unauthorized funds during CBN
Governor Soludo's tenure as governor, loss of board members
during the August 14 CBN sacking of five bank Chief Executive
Officers, and its listing among Oceanic Bank loan defaulters.

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CLIMATE CHANGE AWARENESS
------------------------

8. (U) The West Africa Women's Association (WAWA) Nigeria
Chapter held a conference in Abuja November 23 to 24 about
the effects of climate change on women's health. Conference
organizers sought to increase awareness, build capacity, and
mobilize women from the region on socio-economic issues that
affect African women and children. WAWA representative Dr.
Beatrice Ubeku described the effects of climate change on
women in developing countries as overwhelming, citing heat
waves, clean water shortages, and food scarcity as the most
devastating problems. Ubeku emphasized that African women
needed education about desertification and encouragement to
use alternative energy sources. During the conference,
participants announced that the GON recently approved a clean
development mechanism called the "Save-80 Wood Stove" as part
of GON efforts to provide alternative energy sources to
prevent deforestation. WAWA proposed that the GON enhance
its efforts to inform women about climate change, improve the
quality of information available on climate change, and
implement stiffer penalties on gas flaring and other
environmental hazards that pose health risks to women and
children.

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A CALM DELTA INCREASES ELECTRICITY
----------------------------------

9. (U) Less strife in the oil-rich Niger Delta and the
Q9. (U) Less strife in the oil-rich Niger Delta and the
resulting increase of oil and gas supplies to power plants
have increased Nigeria's electricity supply.
National power supply rose from 1,400 megawatts (MW) in July
to about 3,330 MW in December. However, while relative calm
prevailed in the Delta, Nigeria's plan to increase power
supply to 6,000 MW by year's end is still constrained by the
lack of a policy, regulatory, and tariff regime that would
promote private investments. To overcome barriers to private
sector investments in power, USAID launched the Nigerian
Energy and Climate Change project (NECC) and will hold a
two-day workshop to "Overcome Barriers to Independent Power
Production." USAID is also working with other donors
including the United Nations, World Bank, Japan, Sweden,

ABUJA 00002198 003 OF 003

Britain, Spain, and France to develop a plan outlining the
elements and timing of an effective donor package for the
ongoing peace process in the Niger Delta.

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IBORI GETS ANOTHER DELAY
------------------------

10. (U) Federal High Court Judge Marcel Awokulehin in Asaba,
Delta State, again deferred (for the fourth time) a decision
December 4 in the prosecution by the Economic and Financial
Crimes Commission of former Delta State Governor James Ibori
and associates on 170 counts of money laundering. The local
press quoted the judge as indicating that he wanted to "err
on the side of caution," apparently referring to multiple
petitions filed against him. Ibori's lawyers had sought to
claim that the EFCC had not established a "prima facie" case
against him.

11. (U) Embassy Abuja and ConGen Lagos collaborated on this
telegram.

SANDERS

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