SCENESETTER FOR DEPUTY SECRETARY NEGROPONTE

C O N F I D E N T I A L SECTION 01 OF 03 ABUJA 002309 SIPDIS SIPDIS DOE FOR CAROLYN GAY E.O. 12958: DECL: 05/13/2017 TAGS: PREL PGOV PMIL ECON EPET KDEM NI SUBJECT: SCENESETTER FOR DEPUTY SECRETARY NEGROPONTE Classified By: Charge d'Affaires Lisa Piascik for reasons 1.4. (b & d). ¶1. (C) Mr. Secretary, U.S. Mission Nigeria welcomes your November 11-13 visit to Abuja. Your visit comes during a period of relative political calm as President Umaru Musa Yar'Adua nears the end of his first six months in office. With his cabinet finally in place, Yar'Adua's new administration is beginning to assert independence from former President Obasanjo and articulate its own policies. For the most part, we believe Nigeria is moving in a positive direction under the Yar'Adua regime, albeit slowly. There has been some progress on rule of law and anti-corruption, including the acceptance of election tribunal results against some close to the President and the investigation of high level former officials. However, more needs to be done on electoral reform, Niger Delta security, and economic growth if democracy is to truly take root and flourish here. YAR'ADUA'S CHALLENGE - ESTABLISHING LEGITIMACY -------------- - ¶2. (C) The April 14 and 21 state and national elections, which brought Yar'Adua to power and secured an overwhelming majority of state and national political offices for the ruling Peoples' Democratic Party (PDP),were seriously flawed and lacked credibility. More than 1,200 tribunal cases have been filed contesting various election results, including a challenge to Yar'Adua's own election. Yar'Adua has both publicly and privately stressed his commitment to the rule of law, promising to abide by all tribunal results, including the one investigating his own election, should it rule against him. In a recent test of his commitment, Yar'Adua supported the judgment and refrained from influencing the process that led to the nullification of his son-in-law's election as Governor of Kebbi State. Yar'Adua has established an Electoral Reform Committee with a broad representation of the judiciary and civil society (including some respected figures well known to us); however, the Committee has only met once and serious questions remain as to how effective it will be. ¶3. (C) Yar'Adua's first challenge as president has been to establish his own legitimacy, since the flawed elections did not provide him a political mandate. Though he was clearly hand-picked by former President Obasanjo, since taking office �00A;Yar'Adua has tried to inject his own values into the presidency ) stressing adherence to the rule of law and taking a hands off approach to the affairs of the judicial and legislative branches, as well as to anti-corruption investigations. According to one recent poll, Yar'Adua enjoys a 79 percent approval rating; he is viewed by most Nigerians as a man of personal integrity, generally praised for his management of Katsina State during his tenure as Governor from 1999-2007. ¶4. (C) Nigerian politics today must be understood within the context of the ongoing battle for influence between Yar'Adua and former President Obasanjo -- a battle which takes place within the ruling PDP. The battle slowed an already cumbersome process for appointing the Cabinet (under the Constitution, the Cabinet must have a "national character," meaning that each state must be represented). Yar'Adua's first ministerial appointments were made more than two months after he took office. SCANDALS IN THE NATIONAL ASSEMBLY -------------- ¶5. (C) Investigations were recently launched against both Senate President David Mark (PDP, Benue State) and House of Representatives Speaker Patricia Etteh (PDP, Osun State), both of whom were brought into office earlier this year through former President Obasanjo's influence over the Assembly. As a result of the House investigation, Etteh announced on October 30 that she would step down as Speaker. She faced possible impeachment from both within the PDP party and opposition parties over her involvement in the award of a 628 million Naira (approximately USD 5 million) contract to renovate her and the Deputy Speaker's residences. The House has been at a virtual stand-still in plenary meetings since it reconvened from the summer recess on September 4, with even the presentation of the Appropriations Bill suffering delays as a result. Senate President Mark is finding himself potentially in an equally precarious position, as investigations begin into contract awards for his own ABUJA 00002309 002 OF 003 residential renovation, the alleged misappropriation of 2007 Supplementary Budget to procure furniture for the new Senate building and the alleged payment of 500 million Naira (approximately USD 4 million) to television stations for live telecast of Ministerial nominees in July. More significantly, Mark faces an appeal against his Senatorial election in the Benue State Electoral Tribunal, which is believed by many to stand a good chance of overturning the results. SECURITY ISSUES -------------- ¶6. (C) Yar'Adua has been sending a strong public message about his commitment to rule of law and to security and development in the Niger Delta. While he has taken some preliminary actions on rule of law, to date little has been done to strengthen security or development in the Delta region. Yar'Adua established a new committee on the Niger Delta headed by Vice President Goodluck Jonathan, but it remains, after four months, in the initial stages of "consultation with stakeholders" and there are concerns that (like previous committees on the Delta) it will be ineffective. Unrest and kidnappings of foreigners subsided substantially in the first months of the Yar'Adua administration, but there have been renewed incidents of violence targeted at western oil facilities in the last two weeks. In the short term, most militant leaders appear willing to exercise restraint while they await outward signs of progress from the Vice President's Committee. However, the militants' patience has been tried by similar efforts in the past and they may return to widespread kidnapping and escalated violence if the government is not able to make a good faith effort on the Delta and undertake concrete actions to improve conditions in the region soon. Nigeria is the lead African nation in the Gulf of Guinea Energy Security Strategy dialogue process; however, its inability to control the violence within the Delta is a black mark on its leadership. With more than US$3 billion in U.S. investment (mostly in the oil industry),participation in a solution to the problems in the Delta is a high priority for the USG and U.S. oil companies alike. Security concerns in the region have greatly hampered the ability of USAID and other donor agencies to conduct development work in the region, even through non-USG partners. ¶7. (SBU) Half of Nigeria's population is Muslim. Illiteracy, child mortality and malnutrition rates are far higher in the predominantly Muslim north and desertification and a fast growing population mean more competition for already scant resources. There are concerns that government neglect in the area provides conditions favorable to extremist and terrorist organizations. ECONOMIC DEVELOPMENT CHALLENGES -------------- ¶8. (SBU) Despite being the world's fifth largest oil producer, Nigeria remains a poor country facing grave health and social challenges. Nigeria has a current population of more than 140 million and one of the highest population growth rates in the world (2.9 percent). Nigeria ranks 159 out of 177 countries on the UNDP Human Development Index and has not improved its standing in more than 15 years. Oil accounts for 35 percent of Nigeria's GDP and over 80 percent of government revenue, but amounts in total to only 40 cents per person per day. At least five percent of Nigeria's oil export output is regularly stolen and sold on the black market. ¶9. (SBU) The Nigerian economy has been relatively stable in recent years, characterized by stable foreign exchange rates, single-digit inflation and falling interest rates. The U.S. spearheaded efforts to provide Nigeria approximately US$18 billion in Paris Club debt relief in 2005 and the government paid its London Club debts in early 2007. Prudent public expenditure and sound fiscal policies have resulted in the creation of an Excess Crude Account to offset pressure for inflation and fiscal expansion brought about by high world oil prices. Despite these substantial macroeconomic gains, however, investment (both domestic and foreign) remains critically low. Inadequate and unreliable infrastructure (most notably electricity and roads) as well as mandated state ownership of land seriously inhibit private sector activity. Government regulatory and procurement processes ABUJA 00002309 003 OF 003 are rife with corruption and non-uniformly applied. The Public Procurement Act passed in 2007; however, it has not yet been enacted. NIGERIA REMAINS A STRONG REGIONAL LEADER -------------- ¶10. (C) The feather in Nigeria's cap and an ongoing legacy of the Obasanjo administration is the nation's leadership role in international and regional peacekeeping operations. Nigerian peacekeepers are currently in Sudan, and the GON has expressed privately its plans to keep its commitment to send peacekeeping troops in support of the African Union Mission in Somalia (AMISOM),although Nigerian military leadership is concerned that resources and troops are already stretched thin due to international obligations. In early October, seven Nigerian peacekeeping soldiers were killed in Sudan and several others are still missing. Despite their leadership in peacekeeping on the continent, the Nigerian military remains underfunded and is in critical need of training, equipment and additional personnel to meet its international obligations. ¶11. (C) Privately, the GON is generally supportive and understanding of the U.S. desire to establish a military Africa Command (AFRICOM). However, public paranoia (both in statements from the GON and press articles in general) and a lack of understanding of the nature of AFRICOM is considerable. The source of the paranoia appears to be the misconception that operational U.S. troops would be stationed at AFRICOM. We continue to work to educate the rest of the GON and the public. PIASCIK