NIGERIA: BI-WEEKLY POL/ECON UPDATES FOR JULY 1-16, 2008

UNCLAS SECTION 01 OF 06 ABUJA 001482

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DEPARTMENT PASS TO USTR-AGAMA
DOE FOR GPERSON, CHAYLOCK

E.O. 12958: N/A
TAGS: PGOV KDEM ECON EPET EFIN MOPS PHUM NI
SUBJECT: NIGERIA: BI-WEEKLY POL/ECON UPDATES FOR JULY 1-16, 2008

REF: A) ABUJA 1346, B) ABUJA 1313, C) ABUJA 0652, D) ABUJA 0217


1. (U) The Following is a joint Embassy Abuja, ConGen Lagos
compilation of July 1-16 political/economic highlights, which did
not feature in our other reporting, covering:

--Elections
--National Assembly
--Corruption
--State and Local Governments
--Economic and Business
--Oil and Gas
--Niger Delta
--Human Rights and Trafficking
--Labor

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Election Tribunals, Electoral Reform
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2. (U) SARAKI ELECTION UPHELD: On July 16, the Election Petitions
Tribunal sitting in Ilorin, Kwara State upheld the election of
Governor Abubakar Bukola Saraki and declared him winner of the April
14, 2007 governorship election by striking out the consolidated
petitions filed by the Democratic Peoples Party, the Accord Party,
and their candidates in the election. The tribunal insisted that
the petitioners were unable to establish the polling units or wards
where electoral malpractices took place and that they made general
allegations, which could not be substantiated. It also noted that
the petitioners failed to meet the demand of sections 144 and 145 of
the 2006 Electoral Act in proving their allegations of widespread
fraudulent thumb printing and other alleged irregularities.


3. (U) TARABA SENATORIAL ELECTION UPHELD: On July 1, the Court of
Appeals in Jos upheld the election of Dr. Anthony "George" Manzo
(Peoples' Democratic Party - PDP) as Senator representing Taraba
North Senatorial District in Taraba State. One of Manzo's
competitors in the 2007 election, Alhassan Algadas (Action Congress)
had challenged Manzo's victory on the grounds of electoral fraud and
irregularities. Due to a lack of evidence, Algadas' petition was
originally dismissed. After an appeal from Algadas, the Court of
Appeal in Jos decided that the appeal also lacked merit, and
dismissed the petition again.

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National Assembly
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4. (U) SENATE PRESIDENT DAVID MARK VICTORIOUS: On July 15, the Court
of Appeals in Jos declared Senate President David Mark (PDP) winner
of the Benue South Senatorial District election (see ref A). The
Court said the decision of the electoral tribunal for Benue state,
which had ordered a rerun in two local governments of the senatorial
district, was reached in error.


5. (U) FREEDOM OF INFORMATION BILL UPDATE: On July 10, Radio Nigeria
reported that the Senate concluded its debate on the Freedom of
Information bill. Senate spokesman Senator Ayogu Eze said the bill
will be officially passed by the Senate at the end of September 2008
after the Senate has returned from its two months recess on
September 9.


6. (U) EL-RUFAI INVESTIGATION REPORT: The Senate Committee on the
Federal Capital Territory (FCT) released its interim report July 10
on its investigation into activities of the former Minister of the
Federal Capital Territory, Nasar el-Rufai, which concluded that he
had grossly abused his office and was unfit to hold public office in
the future. The report also recommended that el-Rufai and his aides
be held accountable for 32 billion naira ($272 million) in funds
from the controversial sales of Federal land in the FCT which is, as
of yet, unaccounted for. He was also accused of using his position
to buy the guest house of former Vice President Atiku Abubakar
during the sale of federal houses.


7. (U) SENATE APPROVES NDDC BUDGET: On its final day in session, the
Senate approved a budget of 89.2 billion naira ($758 million) for
the Niger Delta Development Commission (NDDC),10 billion naira ($85
million) more than proposed by President Yar'Adua, and higher than
the 61.8 billion naira ($525 million) appropriated to the NDDC in
2007 under President Obasanjo. 80 billion naira ($683 million) is
slated for development projects, 4.4 billion naira ($37.5 million)
for recurring expenses, 3.3 billion naira ($28 million) for

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personnel, and 1.1 billion naira ($9.5 million) in capital
expenditures. Senator James Manager (PDP-Delta South) attributed
the higher allocation to greater oil revenues than originally
forecast.


8. (SBU) SECURITY LEGISLATION IN THE WORKS: On July 8, Senator
Anthony Manzo (PDP-Taraba North),former GON Ambassador to Israel,
introduced SB 128, a "Bill ... for the Enhancement of Nigerian
National Security and for Other Matters Connected Therewith," in the
Senate. Of note is that of 11 co-sponsors of the counterterrorism
legislation, 4 are from the north, 4 from the South-South (including
Senator Lee Maeba from Rivers in the heart of the Niger Delta) and 3
from the South-West. Senator Manzo indicated to PolOff on July 9
that the June 19 attack on the Bonga oil platform had highlighted
the need to address counter terrorism (CT) issues, including the UN
Conventions on Terrorism, some of which have not yet been ratified
by Nigeria.


9. (U) CONTROVERSY IN THE HOUSE: On July 1, 2008, House Speaker
Dimeji Bankole refused to swear into office Charles Udogwu
Onyekweli, who was scheduled to replace Mercy Almona-Isei as
Representative of the Ndokwa/Ukwuani Federal Constituency of Delta
State. Bankole told Members of the House that he received an
injunction from the Federal High Court preventing him from swearing
in Onyekweli. However, Bankole's lawyer, Dr. Valerie Azinge,
reportedly accused Bankole of lying about the order from the Federal
High Court, claiming it did not exist, and misleading his House
colleagues. A Nigerian court ruled that Onyekweli was the legal
winner of the PDP primary ticket, and that Almona-Isei's name was
unjustly substituted on the ballot and therefore not the legitimate
winner. (Note: Bankole and Almona-Isei, both PDP members, worked
together in the Integrity Group to unseat Bankole's predecessor as
House Speaker Patricia Etteh. End note)


10. (U) SENATE CONSIDERING CORPORATE SOCIAL RESPONSIBILITY
COMMISSION: The Senate is undergoing debates regarding a bill set
forth by Senator Uche Chukwumerije (Abia North) to establish a
Corporate Social Responsibility Commission. The purpose of the
Commission would be to provide relief for communities that suffer
negative consequences due to the activities of industrial and
commercial companies that operate in their areas. According to
media reports, the bill will mandate companies to create policies
that positively affect the host communities, and penalize
non-compliance by fining companies a certain percentage of their
gross annual profits.

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Corruption
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11. (U) EFCC CONTINUES INVESTIGATIONS: Two former ministers of
Aviation and close associates of former President Obasanjo,
Professor Babalola Borishade and Mr. Femi Fani-Kayode, were granted
bail by an Abuja Magistrate Court on July 7 after being arrested by
Economic & Financial Crimes Commission (EFCC) investigators on June

30. The two ministers were arraigned in court on July 1 on charges
of corruption over the misuse of 15.5 billion naira ($128.2
million).


12. (U) In other EFCC news, it is investigating allegations of
inflation of contracts awarded by Governor Nyako's administration in
Adamawa State to the tune of 6.8 billion naira ($58.1 million).


13. (U) FORMER NDLEA CHAIR ARRAIGNED: The Independent Corrupt
Practices & Other Miscellaneous Crimes Commission (ICPC) arraigned
the former Executive Chairman of the National Drug Law Enforcement
Agency (NDLEA),Alhaji Bello Lafiagi, along with his special
assistant Usman Amali on July 7 before a Lagos High Court. The pair
was charged with five counts of receiving money for personal benefit
in the discharge of their official duties and conspiring to use
their offices to confer corrupt advantage upon themselves contrary
to Section 26 of the ICPC Act. However, the absence of Amali due to
ill health has stalled the trial.

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State and Local Governments
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14. (U) NYAKO AVOIDS IMPEACHMENT: Governor Murtala Nyako of Adamawa
State survived impeachment reportedly after the President's Office
and PDP leadership intervened to prevent state lawmakers from
carrying out their threat to impeach him. In line with the

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agreement reached in Abuja, Governor Nyako dissolved all the
caretaker committees he earlier set up in the local government areas
(LGA). He also cancelled the primaries he conducted for the
upcoming local government elections and announced July 19 as the new
date for fresh primaries. (Results to follow in next bi-weekly
update cable.)


15. (U) CONTROVERSEY IN OGUN STATE: The face-off between Governor
Gbenga Daniel of Ogun State and the State Assembly took a more
controversial dimension with the Speaker of the House claiming
Governor Daniel's Chief of Staff came to his house to assassinate
him. However, the Governor's Chief of Staff claimed the governor
was recently poisoned by unnamed political opponents and was flown
abroad for medical treatment. The State House, which is allegedly
influenced by former President Obasanjo and current Minister of
Steel Sarafa Ishola, was believed to be finalizing plans to impeach
Governor Daniel. The PDP leadership intervened to resolve the
impasse.

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Economic and Business
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16. (SBU) PFIZER CRIMINAL/CIVIL CASE UPDATE: EconOff spoke with
Pfizer lead attorney Joe Petrosinelli on July 10 and was told that
the June settlement negotiations in Dubai had mixed results.
Contrary to Nigerian media reports, Pfizer reps, Kano State
government reps, and the claimants in the lawsuit were unhappy that
GON Attorney General Michael Aondoakaa postponed several meetings in
Dubai and then ultimately failed to show up at a final meeting even
though he was in Dubai. Pfizer had hoped to conclude negotiations
on the concurrent state and federal lawsuits. Pfizer and the Kano
State government did proceed with negotiations and Kano reps
promised to adjourn state criminal and civil cases to October 6. In
addition, Pfizer proposed that the next meeting take place between
the Kano Attorney General and a Senior Pfizer official to discuss a
final settlement. Petrosinelli commented that the sides remain far
apart but "it is time for the principals to meet without the lawyers
to reach settlement." The Kano reps said they would pass the
proposal to the Kano AG and notify Pfizer within a few weeks.


17. (SBU) NIGERIAN AGOA DELEGATION VISITS WASHINGTON: Minister of
State for Commerce and Industry Ahmed Garba Bichi led the eight
person AGOA delegation (ref B). The delegation expressed strong
interest in deepening USG cooperation during a meeting with United
States Trade Representative (USTR) officials on July 14, and
attended a reception hosted by U.S. companies operating in the oil
and gas sector that evening. The U.S. companies reported that the
GON reps said they were closely reviewing the model U.S. bilateral
investment treaty draft and would soon respond with comments. In
addition, the GON received comments from U.S. companies on draft
local content legislation pending in the National Assembly. Last,
the delegation expressed surprise at an industry presentation that
said that the amount of U.S. investment in Nigeria has decreased
during a period that it had increased in other parts of Africa.


18. (SBU) USAID AND ECONOFF MEETING WITH THE NIGERIAN EXPORT
PROMOTION COUNCIL: In preparation for the July 15 AGOA Forum in
Washington, and as part of ongoing efforts to boost non-oil AGOA
exports, EconOff and Acting AID Mission Director met with Nigerian
Export Promotion Council (NEPC) Acting Director General Aliyu Lawal
in Abuja to discuss progress on deliverables since the April 10
Trade Investment Framework Agreement digital video conference.
Lawal reported that the NEPC has been involved in a turf battle with
its home ministry, and as a result, has made no progress on
identifying AGOA focus sectors or putting together an AGOA strategy.
At the DVC, NEPC had been tasked with moving forward on both areas,
but Lawal explained that the GON will need more time. EconOff
briefed Lawal about an export promotion event in Minna, Niger State
on July 28-29, sponsored by the Niger State government and the
Nigerian Bank of Industry, and supported by the USG Team in Nigeria.



19. (SBU) ECONOFFS MEETING WITH CITIGROUP NIGERIA CEO: EconOffs met
with Citigroup Nigeria CEO Emeka Enuwu in Abuja on July 9 because
the company was concerned with July 3 media reports that charges had
been filed against the company regarding a legal dispute that was
previously withdrawn by the GON in March 2008. In February 2007
several Citigroup officials were detained by the GON police at their
headquarters in Lagos after a dispute with a former client over the
importation of buses. Soon after the Lagos Consulate and Embassy

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contacted the Inspector General of Police and the Attorney General's
office to voice concerns, the employees were quickly released.
According to Enuwu, Citigroup was concerned that new charges had
been filed recently, and said Citigroup lawyers would be meeting
with GON prosecutors to discuss the case and would keep the Embassy
informed.

20. (U) NIGERIA INTERNATIONAL BANK BECOMES CITIBANK NIGERIA LIMITED:
Nigerian International Bank has changed its name to Citibank Nigeria
Limited, a subsidiary of Citigroup Inc. The company started its
operations in Nigeria in 1984 and will celebrate its 25th year of
operation next year.

21. (U) MOU BETWEEN U.S. AND NIGERIAN POWER SECTOR REGULATORY
COMMISSIONS: The United States National Association of Regulatory
Utility Commissioner (NARUC) and the Nigeria Electricity Regulatory
Commission (NERC) signed a Memorandum of Understanding (MOU) on July
15 at the Ambassador's residence that focused on implementing a
regulatory partnership between both agencies. The goal is to
improve regulatory practices and foster a long-term sustainable
relationship. The Ambassador noted at the July 15 signing ceremony
that a sound regulatory framework in the power sector is essential
to attract private investors from the U.S and elsewhere. The State
of Michigan's regulatory experts will carry out the now twinning
relationship together with NERC.


22. (SBU) CISCO SYSTEMS MEETING WITH THE U.S. MISSION: Cisco reps
met with EconOffs on July 14 to present several business development
projects funded by multilateral or bilateral donors with whom Cisco
does business. Cisco is bidding on the World Bank S&T Education
Post-Basic Level Project and the 911 Solution. The latter is a
project designed to provide a basic communications infrastructure
for the GON during states of emergency. According to Managing
Director Hawa Yabani, Cisco is hoping to sign an MOU with Abuja
Technology Village (ATV) to provide consulting, a business park
model plan, a systems integration plan, and supply equipment. In
addition, Cisco is working on a project with the Ministry of
Education aimed at enhancing the IT skills of graduates.

23. (U) PRIVATIZATION MAY BE SUSPENDED FOR POWER HOLDING COMPANY OF
NIGERIA: The Power Sector Reform Committee voted to suspend the
privatization of the Power Holding Company of Nigeria (PHCN). The
committee, asked to review the performance of ongoing power sector
reforms, based its recommendations on insufficient power generation
infrastructure, poor maintenance culture, inadequate funding, gas
shortage, obsolete equipment, weak and inadequate network coverage
and substandard distribution lines. It also identified poor billing
systems, unwholesome practices by PHCN staff, and poor customer
relations as some of the problems confronting the power sector as
reason for holding up the privatization. In addition, on July 29 the
PHCN Board was revamped with the current Minister of Power being
appointed as Chairperson to oversee addressing the problems outlined
above.


24. (U) GON SPENDS $3 BILLION ANNUALLY ON FOOD IMPORTATION: Recent
media reports estimate that the GON annually spends $3 billion on
food importation, mostly on rice, sugar and wheat. In 2007, more
than 36% of rice and 99% of sugar and wheat consumed were imported.



25. (U) EIGHTY PERCENT OF NIGERIAN YOUTH JOBLESS: The Minister of
Youth Development, Akinlabi Olasunkanmi, reported that 80% of
Nigerian youth are unemployed. He cited this high figure as a
reason for the high-number of criminal activities reported among
youth. According to the National Bureau of Statistics (NBS),
Nigeria's youth population is 80 million, or 60% of the population.
Olasunkanmi said that annually, only 10% of graduating college
students are able to find paid jobs.


26. (U) WORLD BANK AND GON SIGN FINANCIAL AGREEMENT ON ROAD
UPGRADES: On July 15, the GON and World Bank signed a 46 billion
naira ($390 million) financing agreement for the rehabilitation,
upgrade and maintenance of roads, and the construction of 132
bridges. The loan is interest-free and has a repayment period of 40
years, the projects to be completed within 8 years. The first state
in which the agreement will be implemented is Kaduna State, which
will receive 7.2 billion naira ($61 million) to improve road access
to rural communities.


27. (U) NIGERIAN AIR TRAFFIC CONTROLLERS BEGIN TRAINING IN THE U.S.:
The Nigerian Airspace Management Agency (NAMA) sent 15 Air Traffic
Controllers to the Pan-Am Academy in Miami for an eight week long
training course on Area Radar Control. Since this training started

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in March 2007, 52 Nigerian air traffic controllers have completed
the course.


28. (U) GON TO SUE EU FOR ECOLOGICAL DAMAGES: The GON is considering
a $100 billion lawsuit against the European Union (EU) for
ecological damages caused by reckless waste disposal in Nigeria.
The Nigerian Nuclear Security Agency (NNSA) claims that EU mining
companies disposed of radioactive materials in 1100 abandoned mines
in Central Plateau State, which pose a health risk to two million
people. According to the NNSA, the people living near these mining
fields are at risk for skin, lung and liver cancer, as well as sight
impairments.


29. (U) UK SPENDS 16.6 BILLION NAIRA ($141 MILLION) ON HIV/AIDS IN
NIGERIA: The United Kingdom reportedly spent 16.6 billion naira
($141 million) on HIV/AIDS prevention in Nigeria. The media
reported that the UK is increasing cooperation with the Nigerian
National Agency for the Control of AIDS.


30. (U) NIGERIA AMONG TOP 12 IN INFANT MORTALITY: According to
UNICEF's 2008 State of the World's Children's Report, Nigeria is
among 12 countries reporting the highest mortality rate among
children under five. By UNICEF calculations, more than one million
children die annually in Nigeria, nearly a third of the children
under five are underweight, and half of the population does not have
access to improved drinking water sources.

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Oil and Gas
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31. (U) GON SUBSIDIZING DIESEL: The Minister of Energy (Petroleum)
Odein Ajumogobia announced that the GON will subsidize the cost of
diesel, but did not specify the sum involved. Currently, the GON
subsidizes gasoline and kerosene through the Petroleum Support Fund.
In 2007, the GON spent 278.8 billion naira ($2.3 billion) in
subsidies for petroleum products. With the addition of diesel, some
industry analysts speculate that this sum will increase to 900
billion naira ($7.6 billion). (Note: A government subsidy to bring
down the cost of diesel is among the key demands of tanker truck
drivers, who are threatening to resume a transport strike on July

28. End note.)

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Human Rights and Trafficking
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32. (U) DOMESTIC TIP INCREASING: On July 7, media reports stated
that trafficking of girls from villages to cities in Nigeria is
increasing and the state is powerless to stop the trade. According
to Bello Ahmed, head of the Kano office of the National Agency for
the Prohibition of Traffic in Persons (NAPTIP),girls aged 12-17 are
regularly trafficked from villages and brought to the city to work
as maids. Apart from being denied access to education, these girls
are often raped and beaten by their employers. In addition to
poverty, trafficking in girls and women is driven by the extreme
income and gender inequality which exists in Nigeria. Although
there is a provision in the Child Right's Act to protect girls from
exactly this, most northern state assemblies refuse to pass enabling
legislation due to conflict with cultural and religious practices
(ref C).


33. (U) NEW RULES ON REHABILITATION OF TIP VICTIMS: Carol Ndaguba,
NAPTIP Executive Secretary, has proposed to the Federal Executive
Council (FEC) a policy, entitled "National Policy on Protection and
Assistance to Trafficked Persons in Nigeria." The policy aims to
regulate rehabilitation programs for victims of human trafficking.


34. (U) DISCRIMINATION AGAINST WOMEN: On July 10, broadcast stations
reported that women groups were still speaking out against a bill
seeking to punish indecent dressing, nudity in public, sexual
intimidation and all forms of abuse against women (ref D). At a
public hearing at the Senate, the women's groups, including the
International Federation of Women Lawyers (FIDA),alleged that the
law, apart from being discriminatory, would also give the police and
other law enforcement agencies additional powers to abuse women and
deny them their rights in the name of enforcing the provisions of
the law.

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Labor
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35. (U) NEW NBA PRESIDENT ELECTED: Mr. Oluwarotimi Odunayo
Akeredolu, a Senior Advocate of Nigeria, emerged as the new
President of the Nigeria Bar Association when he was unanimously
elected on July 2. Born July 21, 1956, Mr. Okeredolu, a Yoruba from
south west Ondo State, passed the Bar in 1978, served as Ondo's
Attorney General from 1997 to 1999, and Chairman of Legal Aid
Council from 2005 to 2006. Akeredolu succeeds Mr. Olisa Agbakoba
whose two-year tenure expires August 29.


36. (U) TEACHERS STRIKE CONTINUES: The nationwide primary and
secondary public school teachers' strike entered its second week
with most public schools remaining closed. On June 30, teachers
throughout Nigeria embarked on an indefinite strike to protest the
Federal Government's refusal to implement the Teacher's Salary Scale
(TSS),which would increase teachers' pay. The GoN maintains that
it can accommodate the teachers' request to implement TSS in its
schools, but cannot compel states and local governments to do so.
The GoN instructed NUT to negotiate directly with state and local
governments for the implementation of TSS. Meanwhile, Academic
Staff Union of Universities (ASUU) and Nigeria Labor Congress (NLC)
promised to join the strike to force government to accede to the
demands of the teachers. Meanwhile, NUT officials have purportedly
been encouraging private school teachers to join the strike as well
in order to show solidarity.

SANDERS