NIGERIA'S IMPORT BAN ON TEXTILES: DEMARCHE

UNCLAS ABUJA 000854

SIPDIS

STATE PASS TO USTR, LAURIE-ANN AGAMA

E.O. 12958: N/A
TAGS: ETRD KTEX NI
SUBJECT: NIGERIA'S IMPORT BAN ON TEXTILES: DEMARCHE

REF: STATE 53388


1. Summary. As requested reftel, Embassy Abuja presented
demarche on textile bans and Milliken's potential order to
the Ministries of Finance and Commerce. The ministry
officials informed Embassy officials that it would be
difficult to grant an exception for Milliken because the GON
has just started implementing the ECOWAS Common External
Tariff (CET),which should obviate the need for bans and
their consequent exemptions in the future. Currently
exemptions and waivers from the import prohibition list can
only be granted by President Obasanjo, who requires a
thorough justification as to why the lack of an exemption
would be deleterious to the Nigerian economy. End summary.

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Meeting at the Ministry of Commerce
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2. On Tuesday, April 11, Emboffs met with Dr. Yemi Obafemi,
Director for External Trade, to present the demarche. Though
Obafemi was sympathetic with Milliken's plight, he confirmed
that his hands were tied in this case and advised that we
meet with officials of the Ministry of Finance to discuss
the issue. He confirmed that approvals for waivers and
exemptions of import prohibitions can only be approved by
the president, but he was hopeful that, if the CET is
properly implemented and strictly adhered to, there will be
no outright bans in the future.

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Meeting at the Ministry of Finance
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3. On Tuesday, April 18, Emboffs presented the demarche
jointly to Alhaji J. I. Zarewa, Director Home Finance; Mr.

I. K. Oguejiofor, Deputy Director, Fiscal Policy; and Mr.
Sani Sidi, Special Assistant to the Minister of State for
Finance. The officials reiterated the position earlier
stated by Dr. Obafemi of the Ministry of Commerce regarding
the CET and that approvals for such waivers can only be
granted by the president. Mr. Oguejiofor specifically noted
that the GON and manufacturers held several meetings before
the CET was agreed upon, and it was too early to start
asking for waivers since the CET has only been implemented
for just seven months. He said it would be better to allow
the CET work for some time, work out the bugs and make
amendments where necessary. He stated that, if the CET is
allowed to work, there will be no need for bans in the
future.


4. On Milliken's issue the Ministry of Finance officials
advised that a detailed justification must be done by the
Nigerian company placing the order for the carpets stating
the adverse economic impact the prohibition will have on its
operations. Specific questions to be answered will include
why the import is critical to its production process; the
number of job losses that would result from the shut down in
production; and proof that the item to be imported cannot be
produced in Nigeria. Mr. Oguejiofor told Embassy officials
that if the information requested could be provided, and he
was convinced by it, he would prepare a request to the
president seeking approval for the items to be imported.