NIGERIA: PROCTOR AND GAMBLE

UNCLAS ABUJA 001956

SIPDIS


US DEPT OF COMMERCE FOR ADVOCACY CENTER


E.O. 12958: N/A
TAGS: ETRD EINV ECON PREL NI
SUBJECT: NIGERIA: PROCTOR AND GAMBLE


REF: (A) USDOC 4484 (B) ABUJA 1918 (C) USDOC 4307



1. Mission appreciates Department of Commerce's flexibility
in redirecting the Secretary's letter to the Minister of
Industries. Please note that this does not imply an overall
policy change away from commercial advocacy at the
Presidential level as Ref A suggests. Based on recent
interaction with the President, Post feels that, in this
case, P&G's interests would be best served with advocacy
directed towards the Minister who will ultimately advise the
President on P&G's requests. Other cases may require other
approaches, and Mission looks forward to consultations with
USDOC as each individual case moves through the advocacy
process.



2. Mission does not recommend sending courtesy copies of the
letter to national legislators. In general, the National
Assembly is not directly engaged in commercial issues.
Moreover, to our knowledge, P&G has not yet established a
relationship with key legislators in its effort to build
support for its proposals. If such letters were delivered
without prior due diligence to assure the likelihood of a
sympathetic hearing, P&G could encounter opposition,
particularly from legislators who may support a protectionist
tariff on detergent. On the other hand, if P&G were to
specify legislators with whom they have already established a
positive line of communication, copies of the relevant
correspondence could be shared at a time P&G deems
advantageous.



3. On August 3, EconCouns discussed tariff issues, including
P&G's request for tariff reductions, with Manufacturer's
Association of Nigeria (MAN) President Charles Ugwuh and
Director General Olawale Akinpelu. (MAN, which represents
Nigeria's manufacturing and export sector, in the past has
been a strong advocate of high tariff protection and, more
recently, the stiff 100 percent customs inspection practices
implemented at Nigeria's ports.) According to Ugwuh, MAN,
not surprisingly, desires tariff reductions (to zero) on
capital equipment and raw materials for Nigerian manufactured
goods (P&G's first two requests with the GON.) The MAN
President added that they also accepted eventual, but
gradual, tariff reductions for all consumer products -- with
commensurate improvement in both Nigerian infrastructure and
the productivity of Nigerian manufacturers. Thus, he did not
oppose the principle of a paced annual reduction in the
tariff for detergent that would gradually force P&G's
domestic competitor to face stiffer market conditions.
However, the idea of an immediate reduction to the level
sought by P&G would be, Ugwah felt, politically unpalatable.



4. Ugwuh and Akinpelu recommended the GON provide P&G a tax
holiday equal to the difference in the GON tariff rate and
the 25 percent tariff rate desired by P&G. (As the tariff
rate fell, so too would the tax break.) They also felt P&G
would have a stronger case if the company agreed to
eventually import Ariel detergent in bulk for packaging in
Nigeria, rather than importing the packaged Ariel product.
Ugwuh pointed out that Industries Minister Jamodu was,
despite his former ties to P&G's competitor, a "MAN man" and
understood well the benefits of competition for both
manufacturers and consumers. A compromise between P&G and
the GON along the lines outlined above, Ugwuy believed, would
be a good basis for an agreement. Mission has not yet
informed P&G of its conversation with MAN.
Jeter