12TH NIGERIAN ECONOMIC SUMMIT

UNCLAS ABUJA 001632 SIPDIS SIPDIS STATE PASS TO USTR FOR C. HAMILTON TREASURY FOR DAN PETERS USDOC FOR 3317/ITA/OA/KBURRESS USDOC FOR 3130/USFC/OIO/ANESA/DHARRIS E.O. 12958: N/A TAGS: EFIN ECON EINV EPET NI SUBJECT: 12TH NIGERIAN ECONOMIC SUMMIT ¶1. SUMMARY. On June 7-9 2006, the NESG and NPC sponsored the 12th Nigerian Economic Summit, "Sustaining Reform and Unlocking Nigeria's Potential". President Obasanjo delivered the opening address and closing remarks. Nigeria has to improve on its ranking from the lowest quarter (88 out of 117) in global competitiveness. Passage of key legislation, increased foreign direct investment and more efficient delivery of infrastructure and services are needed. Discussions on oil and gas concluded that a real and creditable political solution is needed in the Niger Delta to avoid more serious problems down the road. End Summary. ¶2. From June 7-9, 2006, the 12th Nigerian Economic Summit was held in Abuja. This annual event is sponsored by the Nigerian Economic Summit Group (NESG) and the GON's National Planning Commission (NPC). The NESG is a non-partisan private sector organization that champions an open private sector-led globally competitive economy. Summit participants came from the public and private sectors and in and outside of Nigeria. Ministries of Finance, Commerce, Central Bank of Nigeria, the World Bank, and the United Nations made presentations. A former Department of State, Deputy Assistance Secretary, Thomas Woods, spoke on U.S. Policies in Africa. The United Nations launched a Global Compact local network that fifteen local corporations signed onto. The Global Compact seeks to promote responsible corporate citizenship so that business can be part of the solution to the challenges of globalization. ¶3. The theme for this years' summit was, "Sustaining Reform and Unlocking Nigeria's Potential". The two days focused on Human Development & Private Sector Competitiveness, and Governance, Institutions and Fiscal Management and Financing. The summit broke down further into roundtables, open forums, mini sessions and policy commissions. The policy commissions were specific topics such as infrastructure, agriculture, investment climate and competitiveness, non-oil/non agriculture, governance, and oil and gas. ¶4. President Obasanjo gave the opening and closing remarks for the three day event. At the closing ceremony a summary was officially presented to the body with the president in attendance that highlighted the background of the NES, the gains made since its' inception, unfinished business, and key challenges for the way forward. Challenges -------------- ¶5. Nigeria's economic position with the rest of the world is one challenge. Nigeria in ranked in the lowest quarter (88th out of 117 countries) among investment destinations based on global competitiveness. Some of the countries that scored below were Kenya, The Gambia, Zimbabwe and Cameroon. Literacy is moving downward in the 15-29 age group. Other problems include poor infrastructure, power outages, recent telephone strikes, corruption, major delays at the ports (average 45 day clearance) and the continual disruptions in the Niger Delta. The Gains -------------- ¶6. In spite of these challenges there have been gains, the sovereign ratings from Fitch Ratings and Standard and Poors, the ongoing consolidation of the banking sector, settlement of debt to the Paris Club, the World Bank approval of the Policy Support Instrument based on the Nigeria Economic Empowerment Development Strategy (NEEDS).1 The Way Forward -------------- ¶7. To move Nigeria further forward strengthening institutions and passing critical legislation are key. With the national elections next year it will be important to institutionalize many recent reforms in the law. Some of the most important laws before the legislature are Fiscal Responsibility, NEITI, Antitrust, Tax Reforms and Agricultural Procurement. Private sector growth must anchor the economic development strategy, supported by an institutionalized commitment to democracy, law and order, good governance and international diplomacy. Nigeria needs more foreign direct investment, to create employment, and plan that integrates the oil and gas sector. Participants called on Nigeria to expand the agricultural sector and instill a work ethic that frowns on corrupt practices, to build a global competitive environment with a reliable infrastructure. Oil and Gas: Focus on the Delta ¶8. The discussion on the oil and gas sector soon gravitated to the chronic problems in the Niger Delta. The discussion concluded that throwing more money at the problem was not the answer; GON needed to reach a political solution within the next two years. Otherwise, discussants feared, greater unrest that could spread throughout the country. These comments unfortunately were not part of the summary that was presented at the closing ceremonies with President Obasanjo in attendance. FUREY