NIGERIA: DELTA'S AMBITIOUS INTEGRATED DEVELOPMENT

C O N F I D E N T I A L SECTION 01 OF 03 LAGOS 000704

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/26/2017
TAGS: PGOV EAGR EPET PREL ASEC NI
SUBJECT: NIGERIA: DELTA'S AMBITIOUS INTEGRATED DEVELOPMENT
SCHEME

REF: LAGOS 502

Classified By: Acting Consul General Vicki Hutchinson for reasons 1.4 (
B) and (D)


1. (C) Summary: The Delta State Integrated Development
Project has created an ambitious development plan for the
state focused on establishing an industrial base, developing
infrastructure, and privatizing some government functions to
boost citizens' earning power. Two of the plan's larger
projects are a free trade zone and a sea port, which Dubai
Ports and a Chinese group have expressed interest in running.
Godwin Akpobire, head of the Development Project, suggested
NGOs could help monitor state and local government budgets,
spending, and elections because government officials are
poorly trained and do not understand the rule of law. End
Summary.

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"Holistic" State-Wide Development Planned
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2. (SBU) Godwin Akpobire, head of the Delta State Integrated
Development Project in the Governor's office, told Poloffs on
October 19 his economic plan for the state seeks to establish
an industrial base, link it with road and rail networks, and
privatize certain government functions such as electric power
generation, thereby improving citizens' earning power.
Akpobire, who worked extensively as a city planner in
England, said Delta State needs to "take oil out of the
equation" by shifting away from dependence on derivation (oil
revenues) toward dependence on manufacturing and commercial
activities. His plan includes developing refineries, ports,
free trade zones, aqua and agriculture, tourism, and silica
industries in the state and linking them by a network of
roads and railways.


3. (C) Akpobire noted that none of this will be possible
without sufficient electrical power. Currently, he said,
Delta State generates 1,800 of the nation's 3,000 kilowatts
generated daily. That power is distributed throughout the
country via the national grid. However, Delta State gets
back for its own use only a fraction of the power it
generates daily. Individuals attempting to run viable
businesses spend thousands of naira per day tokeep
generators running. Akpobire would like to take Delta State
off the national grid and keep the power for itself and
privatize the plants to further lower the cost of generating
power. Even with radically lower costs, 3.5 out of 4.0
million Delta State inhabitants would be unable to afford
power, he said. As a result, he proposes that the State
subsidize power for those citizens living on less than USD
1.25 per day. (Comment: Akpobire's proposal will be a hard
sell to the National Electricity Regulatory Commission, who
controls the nation's power grid. Comment.)

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Procurement Regs Will Leave No Room To Cheat
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4. (SBU) Central to the entire development plan is setting
up systems that are impossible to manipulate, he said. He
plans to overhaul the public procurement system and make it
transparent. He plans to revise the current tendering
process which grants government the discretion not to choose
the lowest bid, and opens the system to manipulation, and is
currently researching ways to factor quality of materials,
capacity of the bidder, etc. into the equation. He also
intends to require performance bonds which the contractor
would forfeit upon failure to perform.
Akpobire admitted that while he has the Governor's support
for these changes, the state assembly is unaware of the
requirements needed for an international standard system.


5. (SBU) To help Delta State citizens establish credit
histories against which they can borrow for mortgages,
Akpobire will push the Delta State integrated Development
Card, supported by three Nigerian banks (Access, Oceanic, and
Afribank).


6. (SBU) Akpobire also commented on the need to adopt
environmental and workplace health and safety regulations to

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protect local communities from foreign company abuses. He
said there is an Indian aluminum company operating in Delta
that empties its lead directly into rivers. However,
government cannot close the factory because to do so would
throw 200 locally employed people out of work.

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Secure Coastal Port and FTZ
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7. (SBU) Akpobire has determined that a deepwater port along
Delta's western shoreline would be located only four hours
from the point at which a ship enters Nigerian territory
after leaving international waters. Such a deepwater port
would save international ships from having to continue south
towards Port Harcourt. In addition, although sixty percent
of all Nigerian oil exports originate from Escravos and
Forcados in Delta State, oil is currently exported via Port
Harcourt in Rivers State because Delta's inland ports would
have to be dredged continuously to allow access for deep
draught vessels, an unsustainably expensive proposition.
Akpobire was confident Delta could begin to export its own
natural resources, especially since he expects Delta's future
gas exports to surpass all but Russia's in 10 years.


8. (SBU) Akpobire said the proposed Delta State Free Trade
Zone (FTZ) would be automated to remove the elements of the
system which allow corruption. Akpobire sees Delta becoming
the largest pipe terminal in West Africa (including oil,
water, and general house and construction pipes),and
identified ten additional industries, such as lumber, that
could benefit from a deepwater port. Dubai Ports and a
Chinese group, Oceanic, reportedly expressed interest in
running this port. Akpobire admitted it would be a large
challenge to shift interest from Lagos to Delta state.

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Government Officials Not Trained To Do Their Jobs
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9. (C) Many government officials and legislators are not
properly trained nor do they understand the rule of law or
threat of punishment. Akpobire said in the 25 local
government areas (LGAs) in Delta State, he has only
encountered six officials who are dedicated to public
service; the rest he described as self-serving. In the past
five years, Akpobire knew of two local government council
chairmen who held policy-related meetings, and those were
reportedly born from crises, he criticized. While Akpobire
decried the inefficiencies, debt, and poor training of local
government councils, he did not believe them all to be
corrupt but instead blamed their lack of training. The Delta
State Oil Producing Areas Development Committee (DESOPADEC)
commissioners (Reftel) have lofty goals but do not understand
the implications of their goals nor the best ways to achieve
them. He said he had just spent three weeks trying to
convince the Delta national Assembly of the need to conduct
environmental impact assessments for major public works
projects. The DESOPADEC commissioners are well-meaning, he
said, and would benefit from formal training that would help
them to do their jobs.


10. (SBU) The Governor has agreed with Akpobire's suggestion
that local government area officials receive training, and he
is seeking a U.S. or U.K. university that will prepare
courses specially designed to help them better understand
their roles and how to conduct public business. Only the
best officials, beginning with the six he has already
identified, will be trained, he said.

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NGOs Could Monitor Budgets
But Parallel Government Feared
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11. (C) Akpobire said he thought that NGOs could be used to
monitor Delta State and local government revenue, budgets and
expenditures on behalf of the citizenry. However, Akpobire
told Poloffs he could not request assistance from NGOs
without appearing to be acting in opposition to the
government. Not only should NGOs have oversight of
government revenues, but they should be empowered to monitor

LAGOS 00000704 003 OF 003


local government elections as well. He cautioned against
NGOs being used as "political tools." (Note: Akpobire said
the Delta State government had commissioned four NGOs,
including Judith Asuni's Academic Associates Peace Works, to
work with militants and youths and to help NGOs monitor
government actions in the Niger Delta. End Note.)


12. (C) Comment: Akpobire outlined an ambitious, perhaps
overambitious, development strategy for Delta State. While
some of his work is unpopular and will likely be resisted by
those unwilling to change the status quo, his experience and
seeming dedication suggest there may be some, albeit minor,
forward advancements. End Comment.
HUTCHINSON