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
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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
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

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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

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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