NIGERIA: SLOW GOING AT THE MINISTRY OF AVIATION

UNCLAS SECTION 01 OF 03 ABUJA 000440

SIPDIS


SENSITIVE


STATE PASS TO TRADE AND DEVELOPMENT AGENCY


E.O. 12598: N/A
TAGS: EAIR BEXP PGOV NI
SUBJECT: NIGERIA: SLOW GOING AT THE MINISTRY OF AVIATION


SENSITIVE BUT UNCLASSIFED; PROTECT ACCORDINGLY.



1. (SBU) Summary: Ambassador Jeter, accompanied by Econoff
and USTDA representatives Steingass and Hardy, met with
Minister of Aviation Chikwe in late January. Despite
Nigerian participation at a November 2002 Air Cargo
Roundtable in Washington, the Minister showed little
interest in expanding air cargo links between the U.S. and
Nigeria. Chikwe lauded her accomplishments since 2000, but
blamed Nigeria's press and the Bureau of Public Enterprise
(BPE) for sabotaging her deal to reorganize Nigeria
Airways. The Minister said President Obasanjo wanted to
maintain a national carrier, and supported her ongoing
efforts to do so. Chikwe said she had done all she could
to obtain Category I status for Nigeria, but the National
Assembly had yet to pass necessary legislation. Steingass
informed Chikwe that USTDA will likely provide funding to
DynCorp, a U.S. Corporation, for a feasibility study for
the construction of a $400 million National Aircraft
Maintenance Center in Lagos. End Summary.



2. (SBU) In late January, Ambassador Jeter, Econoff, and
USTDA representatives Steingass and Hardy (who were
visiting Abuja on an assessment visit) met with Minister of
Aviation Kema Chikwe. The Minister thanked USTDA for its
support and stated that the U.S. had "done much" in the
last three years to assist Nigeria's aviation sector.
Steingass thanked the Minister for sending representatives
to a late-2002 USTDA/DOT/ExIm-sponsored African Air Cargo
Transportation Roundtable in Washington. The conference, he
noted, had brought private sector air cargo specialists and
U.S. and African officials together to discuss expanding
links in air cargo service between the U.S. and Africa.



3. (SBU) ExIm Director Joseph Grandmaison had written to
the Ambassador in December 2002 to ask what the GON planned
to do to improve Nigeria's air cargo connections and had
met with the Minister and her staff during subsequent
visits. During the Ambassador's follow-up meeting with the
Minister, and during a separate meeting between Econoff and
Chief I.E. Awodu, the Technical Assistant to the Minister,
our Nigerian interlocutors admitted that they had given
little attention to expanding air cargo links with the
United States. They argued that without a viable national
carrier, Nigeria would have difficulty benefiting from
increased air cargo connections. (Comment: The argument is
specious in that one private carrier in Nigeria, and
possibly more, might be capable of ensuring air cargo
service between the two countries. The carrier providing
such a service need not be state controlled. End comment.)


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Accomplishments
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4. (SBU) During the late January meeting, Minister Chikwe
listed her accomplishments since assuming office in 2000:
constructing Abuja's diplomatic hangar, developing gardens
and planting hedges at the nation's airports, banning
antiquated aircraft, making the airports more secure,
refurbishing runways, repairing some radar systems,
renewing the Zaria pilot training school, and purchasing
passenger buses to shuttle passengers between aircraft and
terminals.


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"Nigeria Airways Should Have Been Closed 10 Years Ago"
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5. (SBU) After giving herself credit and noting that
President Obasanjo supported her, Chikwe lambasted
Nigeria's Bureau of Public Enterprise (BPE),especially its
Director General Nasir El-Rufai. She accused BPE of
sabotaging her efforts at reorganizing Nigeria Airways into
the newly named Air Nigeria. The Minister said she had
wanted to broker a deal with the U.K.-based Air Wing, then
approach Singapore Airlines to partner with the GON in
lucrative routes to the U.S. and U.K. BPE was not the only
party that opposed the idea. Chikwe chided the Nigerian
press for writing erroneous reports about it, stating "it
was just blackmail." She then berated Nigeria Airways
management for leasing airplanes for its international
routes, without having the cash to pay the lessors.



6. (SBU) Comment: In mid-2002, the Ministry of Aviation
planned to establish a joint venture with Airwing
Aerospace, a heretofore unknown U.K. company, which was to
have bought 49% of state-owned Nigeria Airways. BPE had no
prior knowledge of the arrangement. El-Rufai blocked the
deal in late September 2002 because, as he stated publicly,
the arrangement lacked transparency and was really a "give-
away" of the national carrier. End Comment.


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Obasanjo Wants a National Carrier
--------------



7. (SBU) Minister Chikwe asserted that the Ministry was not
in a position to shut down the national carrier no matter
the name since President Obasanjo wanted a national
airline. Moreover, the BPE can not privatize a bankrupt
airline with 2,000 employees on the payroll, she said.
Since the airline should have been closed 10 years ago, she
recommended to the President that the GON not invest a
single dollar in Nigeria Airways; the GON should try
instead to establish a joint venture with credible
management to ply international routes. (Comment: Why the
agony should be prolonged remains an open question. The GON
continues to invest billions of Naira in unprofitable state
enterprises, such as Nigeria Airways. Since its
establishment, Nigeria Airways planes have often flown
half-full with many non-paying customers. Still, many GON
officials including the President believe that a national
carrier is essential to Nigeria's national prestige and
identity, and may one day be profitable. End Comment.)


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Problems and More Problems
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8. (SBU) The Minister claimed that all levels of Nigeria's
aviation sector need assistance. She said the Ministry
received many reports from passengers of lost or stolen
items from personal luggage and cargo shipments at
Nigeria's airports. With respect to personnel, she said
the youngest Nigeria-trained pilot was 40 years old. The
National Aviation Training Center in Zaria had not trained
a single pilot in 10 years, she said. The Ambassador asked
whether the GON trains pilots abroad. The Minister replied
that doing so was too costly. She noted that between 1979
when Obasanjo gave up power and 1999 when he resumed as
Head of State, military rulers had not maintained the
aviation sector. This neglect accounts for the poor
condition of many of Nigeria's regional airports. Chikwe
asked whether USTDA could help train Nigeria's pilots and
upgrade its radar systems.



9. (SBU) Steingass told the Minister that USTDA does not
provide direct assistance to countries, but provides
funding for feasibility studies and training related to US-
based company investments in Nigeria. Chikwe responded that
she would form a small committee to maintain contact with
USTDA and to brainstorm about areas where USTDA could
assist the Ministry.


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Category I
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10. (SBU) The Ambassador requested an update on Nigeria's
progress toward Category I status. Minister Chikwe said she
had done all she could toward that end. The National
Assembly must pass the legislation, though nothing will
likely happen until after the April presidential election.
(Comment: Nigeria has not met International Civil Aviation
Organization (ICAO) safety and security standards and
cannot fly to the United States utilizing its own crews and
aircraft. The GON has failed to implement an ICAO
recommendation that the Director General of the Nigerian
Civil Aviation Authority (NCAA) be given autonomous
decision-making authority with respect to aviation safety
and ancillary regulatory responsibilities. The National
Assembly is considering legislation that would grant the
NCAA such autonomy. But pending legislative action, the
NCAA remains under the authority of the Minister of
Aviation. Even if the legislation were passed, Nigeria
would fall short of Category I status. Nigeria lacks
internationally trained cabin crews and operations
inspectors, and has no operational aircraft. End Comment.)


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National Aircraft Maintenance Facility
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11. (SBU) The Ambassador concluded the meeting by noting
the huge potential in Nigeria's aviation sector. Steingass
added that USTDA had financed a feasibility study of a
Lagos-based National Aircraft Maintenance Facility in 1990,
but owing to changes in Nigerian governments, the facility
was never realized. He added that USTDA is considering
funding part of a feasibility study by Texas-based DynCorp.
(At a projected cost of $400 million, the National Aircraft
Maintenance Center would be the largest in Africa. Post
will report relevant developments, via septel.)
Jeter