NIGERIA PLANS NORTHERN ANTIDESERTIFICATION PROJECT

UNCLAS SECTION 01 OF 02 ABUJA 001826

SIPDIS

SIPDIS

STATE PASS TO USTR
TREASURY FOR DPETERS
USDOC FOR 3317/ITA/OA/KBURRESS
USDOC FOR 3130/USFC/OIO/ANESA/DHARRIS

E.O. 12958: N/A
TAGS: SENV EAID EAGR EIND NI
SUBJECT: NIGERIA PLANS NORTHERN ANTIDESERTIFICATION PROJECT

REF: ABUJA 1505


1. Summary. Nigerian and Israeli companies are proposing
an anti-desertification agricultural project for 11 states
in northern Nigeria, to be expanded to eight additional
states. After a tree belt stabilizes an area
environmentally, the GON would bring back the people driven
out by desertification, establish sustainable agriculture,
and pay the settlers to build houses and then farm.
President Obasanjo has endorsed the anti-desertification
project. The Nigerian partner has not addressed the
logistical challenges of bad roads, fuel shortages, and
almost nonfunctioning railroads. The project's domestic-
political goals may clash with its economic rationale. End
summary.


2. Economic officer and agricultural attache met on June 14
with Emeka Mba, Framan Nigeria Ltd. managing director and
CEO, who is seeking political and financial support for a
proposed anti-desertification agricultural project for
northern Nigeria. The Charge d'Affaires met previously on
June 7 with Minister of Environment Helen Esuene at her
request to discuss the project (reftel). The proposed
program to combat desertification is known as the Nigeria
"Desertification Project" as well as the "Desert to Food
Program." Framan is the local representative of Israel's
Agricultural Development (Agridev) Company (International),
which has agricultural projects worldwide.

Project Is Ambitious in Its Extent
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3. The anti-desertification project would start big,
launching in northern Nigeria's 11 "frontline" states -- its
two northernmost tiers -- and the Federal Capital Territory.
Mba explained this was for "balance and political reasons."
Framan would expand the project to eight additional states
two to three years later, after which the project's shelter
belt of trees would total 1,500 km (940 miles) in length.
Agridev assessed that about 35 million people in northern
Nigeria suffer from the effects of desertification.


4. Once an area is stabilized environmentally by trees,
including those producing commercial fruit and nuts, the
Government of Nigeria (GON) would seek to bring back people
driven out by desertification and establish sustainable
agriculture. The GON intends to resettle 200 families in
each local government area (LGA) -- about 1,000 families per
state eventually creating at least 250,000 jobs. The GON
would pay resettlers to build houses and then farm.

The government will give settlers everything needed
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5. Each family would farm 25 hectares (61.75 acres) and
would receive the income from this produce. Produce from
outside the 25 hectares would be owned by various levels of
government, each sharing the revenue. The GON would provide
seeds and seedlings, animals, houses, tools, equipment,
schools, and wells -- everything needed. Most of the
plants, crops, and animals would be imported hybrids
expected to do well in Nigeria. For the first five or six
years of the project, water would be trucked in for
agriculture, until mechanized irrigation was extablished.
Framan plans to use solar power exclusively to avoid relying
on the electric grid.


6. Mba envisioned 4,000 employees -- mainly unemployed young
graduates -- per state who would work outside the 25-hectare
plots. Agridev would supply 100 expatriates nationally to
supervise the project and Framan would manage the areas
inside and outside the 25-hectare plots. Mba later upped
his projected employment figures and said after two years,
the project would employ 1.5 million to 2 million people.


7. Mba said President Obasanjo endorsed the anti-
desertification project and authorized 300 billion naira
($2.34 billion) for it in 2006 with further federal money to
follow -- in part because Obasanjo believed the project
would burnish his legacy. The GON would commit its own
funds first. Funding sources for the project would be 50%
from the federal government, 20% from state governments, 10%
from LGAs, and 20% from donors and the private sector. The
GON would sign the contract on behalf of the states, and
state governments must provide all employees that the
project required. This would be a federal project with
private-sector management. Framan would manage the project
for 15 years and help procure donor aid. After 15 years,

ABUJA 00001826 002 OF 002


the GON could choose to renew the project or to privatize it
completely. Framan was seeking soft loans from the World
Bank that the GON could guarantee.

Conference is to seek donor assistance
--------------


8. Framan planne to hold a "major international conference"
for ECOWAS heads of state, probably on September 8, in
Nigeria. Vice President Atiku supported the project and
"may have a role" in the conference, Mba said. Israel's
Shimon Peres, former prime minister and currently minister
for the development of the Negev, Galilee, and the regional
economy, would attend. The World Bank, UN officials, and
foreign donors would be invited to help launch the project.


9. Mba volunteered no information about how Framan would
address the logistical challenges presented by bad roads and
fuel shortages. When pressed, he attempted to explain away
these difficulties, as well as the state of Nigeria's nearly
nonfunctioning railroads. Mba did not anticipate Muslim
Nigerians having any concern about the Israeli company's
involvement as long as the project provided jobs and
prosperity.

Comment
--------------


10. The project is almost certainly too ambitious. The anti-
desertification plan appears to be driven by political
motives, as opposed to having a sound and self-sustaining
economic basis. It is unlikely that the GON, northern
states, and LGAs will be able to provide settlers with
almost all necessary tools and infrastructure, when
government now fails to provide most northern Nigerians with
the most basic infrastructure and services.


11. Framan does not appear to have addressed in detail how
the project's agricultural output will be transported and
marketed. Nigeria's patchy road network is already
overburdened. High-cost and unreliable transport undermine
commercial agriculture in Nigeria, which needs a functioning
rail network to transport bulk commodities in a cost-
efficient manner. This very large, complex plan, which
would require sustained budget funding assumes a high degree
of efficient cooperation between multiple levels of
Nigeria's governments -- cooperation that is rarely
achieved. The large amounts of money and materiel to be
purchased would require consistent monitoring. Would-be
donors to the project may express similar concerns after
being approached for their financial assistance.
FUREY