NIGERIA: BI-WEEKLY POL/ECON UPDATES FOR OCTOBER 16-31,

UNCLAS SECTION 01 OF 06 ABUJA 002212

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SUBJECT: NIGERIA: BI-WEEKLY POL/ECON UPDATES FOR OCTOBER 16-31,
2008


1. (U) The Following is a joint Embassy Abuja, ConGen Lagos
compilation of October 16-31 political/economic highlights, which
did not feature in our other reporting, covering:

--Fishing and Agriculture
--Environment
--Health
--Financial News
--Education
--Labor
--Corruption
--Political/International News
--Delta Security Incidents
--Oil and Gas

FISHING AND AGRICULTURE
--------------


2. (SBU) PLATEAU STATE LOOKING FOR PPP: On October 13 Plateau State
government officials told EconOff the state plans to partner with
the private sector in the fish sector. The state government-owned
Payam Fish Farm has 42 ponds on 180 acres of land, 103 of which are
under water. Out of 42 ponds, only five are operational and three
stocked with fish. Despite a state appropriation of 50 million
naira ($424,000) for Payam Fish Farm, the fishery has yet to receive
funds.


3. (U) NIGERIA'S FISHING RESOURCES UNDERUTILIZED: On October 22 the
media reported that of 60,000 hectares of land usable for fish
farming, only 10% is utilized. Experts contend that the major
reasons are lack of well trained fisheries experts, low levels of
fish fingerlings production, non-availability of funds and lack of
interest by private entrepreneurs. Nigeria imports 1.5 million tons
of frozen fish annually, with domestic supply of only 500,000 tons
annually.


4. (U) GOVERNMENT OWNED PRODUCE STORAGE TO BE AVAILABLE FOR FARMERS:
On October 20, President Yar'Adua's Chief Economic Advisor Tanimu
Yakubu reported that the GON has a series of initiatives to boost
production and increase the percentage of available land for
agriculture. The GON plans to reintroduce commodity boards and
other licensed buying agents toward boosting production and
marketing of farm produce. A warehouse receipt system would soon be
in place to increase farmers' liquidity during the off-season
without forcing them to sell their produce when the supply is high
and price low.

ENVIRONMENT
--------------


5. (U) AWARENESS AGAINST DESERT ENCROACHMENT: On October 21, Public
Affairs Counselor and Environment, Science, Technology and Health
Officer (ESTHOff) attended a reception to honor members of the
Nigerian third expedition across the Sahara Desert undertaken to
raise awareness against desert encroachment and global warming. The
event, organized by the Ministries of Foreign Affairs and the
Environment and private partners, including Exxon Mobil, involved a
photo exhibition and a brief clip from an upcoming documentary on
the expedition. At the occasion, Dr. Newton Jibunoh, captain of the
expedition and a recent participant of the U.S. Voluntary Visitor
program, characterized desertification and global warming as real
threats to Nigeria, the surrounding countries and the world and
encouraged collective action by all. He thanked the USG for its
support and urged young Nigerians to join the fight.


6. (U) GON DECLARES SOUTH EAST NIGERIA AN ECOLOGICAL DISASTER ZONE:
According to several press reports, the GON has declared the
southeastern part of the country an ecological disaster zone because
of gully erosion and landslides. Following an October 29 meeting,
Vice President Goodluck Jonathan and the governors of five affected
states (Anbara, Ebonyi, Imo, Abia, and Enugu) agreed to set up a
committee to improve the situation


7. (U) AGREEMENT ON RECYCLING PLANT IN KANO STATE: On October 28 the
Kano state government, the federal Ministry of Environment and a
private company, Goodness Nigeria Limited, entered into agreement to

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establish a 8.6 billion naira ($73 million) garbage recycling plant
in the state. The company will utilize waste to provide fertilizer
and biogas. The agreement is part of both state and federal
government's effort to improve the environment and enhance wealth
creation.


8. (U) NIGERIA RECORDS 418 OIL SPILLS IN 6 MONTHS: Minister for
Environment, Housing and Urban Development, Halima Alao reported on
October 28 that Nigeria recorded 418 oil spill cases in the first
six months of 2008. The spills are believed to be the results of
aging oil facilities, illegal bunkering, and human error. All
incidents were reported to the National Oil Spill Detection and
Recovery Agency (NOSDRA),a lead agency on oil spill management.

HEALTH
--------------


9. (U) EU ALLOCATES $19 MILLION FOR POLIO ERADICATION: On October 20
the European Union Partnership to Reinforce Immunization Efficiency
(PRIME) promised to allocate 2.3 billion naira ($19 million) for
2009 polio eradiation efforts. The funds would be used to improve
immunization infrastructure including cold chain equipment, cold
stores and heath facilities renovation.


10. (U) WIFE OF EBONYI STATE GOVERNOR CALLS ON POL-ECON CHEIF:
During a rare visit to Lagos, the wife of Ebonyi State Governor
Martin Elechi, Mrs. Josephine Elechi, called on Pol-Econ Chief to
tell her of the continuing success of her program to help women in
Ebonyi State suffering from vesicovaginal fistula (VVF). Mrs.
Elechi said that, as a girl growing up in her village, she knew many
women who suffered from this problem, and upon becoming First Lady,
knew that she wanted to try to help. She has trained local health
care providers to recognize the problem, and to refer patients to
the hospital in the state capable of conducting the surgical repair.
By disseminating information about VVF and her program to address
the problem, she has persuaded many women who formerly were
unwilling to admit they suffered from VVF to come forward for
treatment. Mrs. Elechi said she had recently attended a program, to
which she had been invited by USAID, at which she shared her
experiences and learned about other similar programs in Nigeria.

FINANCIAL NEWS
--------------


11. (U) 80 MILLION NIGERIANS HAVE NO ACCESS TO FINANCIAL SERVICES:
As of September 2008, there are 815 micro finance banks (MFB) in the
country, of which nine are state owned. Most of the MFBs are
concentrated in the southern part of the country, with 335 in the
south-west, 168 in the south-east, 114 in the south-south, 108 in
the north-central, 57 in the north-west, and 33 in the north-east.
Government statistics estimate that MFBs serve less then one million
out of 80 million Nigerians who need access to financial services.


12. (U) FOREIGN INVESTMENT IN GOVERNMENT BONDS FALLS BY 6.9 BILLION:
In October foreign holdings of federal government bonds dropped from
10% to 1% - 8.5 trillion naira ($72 billion) to 950 billion naira
($8 billion). In response on October 29 Debt Management Office
Director General told the press that the GON needs to "step up its
drive for Foreign Direct Investment as opposed to foreign portfolio
investment."


13. (U) GON PARTNERS WITH CHINA ON ETHANOL FACTORY: On October 8 the
Taraba State government signed an agreement with a Chinese firm,
A-Dinota Ventures Ltd, to establish a $115 million ethanol factory
in the state. The factory will produce 200,000 liters of fuel
ethanol, 100 tons of cassava flour, 50 tons of liquid CO2 and
600,000 liters of bio fertilizers daily. Through a Public Private
Partnership, the state government is expected to provide land and a
$70 million sovereign guarantee for importation of the processing
equipment from China. The state will assume part ownership in the
factory.

EDUCATION
--------------


14. (U) MISSION NIGERIA'S DEMOCRACY EDUCATION OUTREACH: On October

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31, EmbOffs traveled to Kaduna as part of Mission Nigeria's
democracy education outreach efforts to explain the American
political system and educate Nigerian audiences to better understand
the 2008 U.S. Elections. Mission Vice Consul, as part of the
Ambassador for a day program, presented a lecture at Kaduna State
University (KSU) on the impact of federalism on electoral politics
in the United States, focusing on the dynamic tension that exists
between states and the central government in four arenas of
electoral administration: electoral districting, candidate
selection, voter registration, ballot counting and the certification
of election results. Approximately 150 students, administrators and
senior faculty attended. Following the lecture, the Vice Chancellor
led a tour of the Kaduna State University campus, including a new
lecture theatre, renovated library facilities, IT instructional labs
containing over 100 new terminals, a biological sciences building,
and a new Faculty Senate Building still under construction. KSU was
chartered 3 years ago and preparations are underway to celebrate the
graduation of its first complete class of students. The EmbOffs
then proceeded to the Kaduna State Library Board for a donation of
nearly 200 titles, made available through Humanitarian Assistance
programming, for use throughout the Kaduna State Library system.
The book donation was facilitated by the Defense Attach Office.

LABOR
--------------


15. (U) GASOLINE TANKER DRIVERS WARN OF STRIKE: Members of the
Petrol Tanker Drivers Union announced on October 16 that they will
embark on a nationwide strike if the federal government does not
address drivers' poor working conditions -- including poor road
infrastructure, which often causes fatal accidents -- and the rising
cost of diesel, which is forcing employers to go out of business and
is putting tanker drivers out of jobs. The drivers threatened to
shut down operations and discontinue transporting fuel from the
depots to filling stations and other destinations if the government
did not address their grievances by 29 October. The union is
currently in discussions with the government and as of November 5,
there has been no strike. The drivers first voiced their grievances
in September 2007 and have called for similar strikes on several
subsequent occasions; however, union officials claim the GON still
has not taken action to address their demands.

CORRUPTION
--------------


16. (U) EFCC ASKS FOR SPECIAL COURT: The Nigerian Television
authority (NTA) reported that Chairperson of the Economic and
Financial Crimes Commission Farida Waziri has asked the Nigerian
Senate to approve the establishment of special courts to prosecute
corrupt individuals. She made the request at a hearing of the Senate
Anti-Corruption and Financial Crimes Committee on October 22. Mrs.
Waziri also criticized the immunity clause which shields the
President, Vice President, governors and their deputies from
prosecution and accused her predecessor, Mallam Nuhu Ribadu, of
fighting a bogus anti-corruption war which, according to her, was
sometimes based on deceit.


17. (U) ALLEGED FRAUD IN THE PURCHASE OF 380 PEUGEOT CARS:
Lagos-based lawyer Festus Keyamo testified on October 29 before the
House of Representatives Committee on Ethics and Privileges
investigating the alleged fraud in the purchase of 380 Peugeot 407
cars by House Members. The alleged corruption has made headline
news and is forcing the EFCC to make a decision on whether or not it
will initiate an investigation.


18. (U) PPPRA ROLE IN DISAPPEARANCE OF PETROLEUM SUPPORT FUNDS: The
EFCC launched an investigation on October 18 into the suspended
Executive Secretary of the Petroleum Products Pricing and Regulatory
Agency (PPPRA) over his role in the disappearance of about USD $500
million from the Petroleum Support Fund. The Petroleum Support Fund
funds subsidies to oil marketers for distribution of fuel within
Nigeria. At issue is the supply of gasoline to marketers without
known retail outlets (presumably for sale on the Black Market).


19. (U) RIVERS CHIEF OF STAFF PLEADS NOT GUILTY: Ezebunwo Nyeson
Wike, Chief of Staff to the Governor of Rivers State, pleaded not

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guilty to seven counts of criminal breach of trust and conversion of
public funds totaling approximately USD $45 million, in a corruption
case being closely watched by militants in the restive region. Wike
was ordered to be held in EFCC custody until he met release
conditions including $500,000 bail and the surrender of his
international passports. The case was adjourned to October 24. The
Movement for the Emancipation of the Niger Delta (MEND),threatened
on October 29 to create a "state of anarchy" unless those accused in
the case were properly dealt with.


20. (U) SHOTS FIRED AT RIBADU'S CAR: On October 30 and 31,
unconfirmed press reports stated that former EFCC Chairman Nuhu
Ribadu's car was shot at on the road from Abuja to Jos one night
approximately two weeks earlier. It is not known whether the
incident was targeted at Ribadu or a case of random criminal
activity on Nigeria's roads at night. Ribadu, who has filed a
request with the Abuja High Court to issue an injunction preventing
the Police Service Commission from implementing his August demotion
from Assistant Inspector-General of Police (AIG) to Deputy
Commissioner of Police (DCP),a two-rank demotion, told press on
October 29 that he is concerned for his safety.

POLITICAL/INTERNATIONAL NEWS
--------------


21. (SBU) Foreign Minister Ojo Maduekwe told Ambassador on November
5 that GON-China relations were heating up over the upcoming visit
in late November of the Dali Lama to attend a NGO event in Lagos.
Maduekwe said that after refusing to deny issuance of a Nigerian
visa to the Dali Lama as requested by the Chinese Ambassador, he
said he received a tense and unfriendly letter from China's Foreign
Minister over this issue. Top Foreign Minister noted that the GON
would not be intimidated by this statement by China and expects
additional GON-China fall out on the issue, including the recently
cancelled oil concession contracts with had been promised to China
under former Nigerian President Obasanjo.


22. (SBU) GON PURCHASES MILITARY EQUIPMENT FROM AUSTRALIA AND
MALAYSIA: October 29 press reports indicated that in a move designed
to "make the Navy globally competitive and adequately police the
Niger Delta," the GON purchased 4 17-m Manta-class inshore patrol
craft and 2 38-m Town-class boats from Australia and Malaysia
respectively. Previous press reports also mentioned the future
delivery of an unspecified number/model of Agusta helicopters, which
can operate off of small ships. NOTE: A private business' website
reported the sale to be comprised of two A109 Power helicopters,
augmenting the July 2004 sale of two others. End Note.) In
addition, an unspecified number of Israeli-built SHALDAG-MK II Fast
Patrol Craft are on order. Long considered too severely
under-equipped and under-gunned to effectively patrol its Exclusive
Economic Zone and combat Niger Delta militants, the purchases will
help the Nigerian Navy meet its security responsibilities and
enhance its ability to protect offshore oil and gas facilities from
militant attacks, such as the one in June 2008 against Shell's Bonga
platform.


23. (U) ONLINE MAGAZINE PUBLISHER RELEASED FROM DETENTION: On
October 29, Jonathan Elendu, (not an American citizen) owner and
publisher of the U.S. based online news magazine ElenduReports.com,
was released on bail after nearly two weeks in detention. State
Security Services (SSS) arrested Elendu on October 18 upon his
arrival from the U.S. at Nnamdi Azikiwe International Airport in
Abuja and later transferred him into custody of the Economic &
Financial Crimes Commission (EFCC) for further questioning.
Nigerian law requires detainees be charged within 48 hours of arrest
(unless a judge rules to extend the detention period); however,
Elendu was held for 11 days and denied contact with a lawyer or his
family. Although the SSS released Elendu without filing any
official charges, the GON has retained his passport and travel
documents.


24. (U) ANOTHER ONLINE JOURNALIST DETAINED: On October 28, the SSS
arrested Emmanuel Emeka Asiwe, a U.S. national and editor of the
online magazine HuhuOnline (www.huhuonline.com),upon his arrival at
the Murtala Muhammed International Airport in Lagos. According to
an SSS spokesman, Asiwe was being questioned on matters of national

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security. A consular visit was conducted on October 31 and Asiwe
was released on bail November 4 under condition he return to SSS for
additional questioning and not leave the country until the
investigation is concluded. Post will continue to monitor and
report on the situation.


25. (U) KANO STATE GOVERNOR TO ISLAMIZE POLITICS: On October 23
Leadership Newspaper reported that Kano State Governor Ibrahim
Shekarau spoke at a presentation of vehicles to the
Hisbah(state-sponsored local religious "police" charged with
enforcing civil aspects of Shari'a law) saying, "We can spend any
amount on the activities of the Hisbah. We cannot mind spending
whatever we have in the state coffers to ensure the success of the
Shari'a." He added that he wanted to "Islamize politics."
Commander General of the Hisbah guards Ibrahim Muazzam Mia Bushira
reported that the Hisbah closed 52 beer parlors and 59 brothels;
arrested 44 beer vendors; and arrested 1850 prostitutes. At the end
of the event some 36,000 bottles of confiscated beer were destroyed.



26. (U) THREAT TO MEDIA AGENCY: On October 28 The Daily Trust
newspaper reported that the Media Trust Publication's Kano office
has petitioned the police and security agencies for assistance
following anonymous threats the office has received for "writing
negative things about the state government."

DELTA SECURITY INCIDENTS; NO AMCITS INVOLVED
--------------


27. (SBU) NAVY VESSEL ATTACKED: An Overseas Security Advisory
Council (OSAC) contact reported that on October 15 militants in six
speed boats attacked Nigerian navy vessels guarding Nigeria's main
crude oil and liquefied natural gas export terminal on Bonny Island.
A spokesmen for the military reported that members of the Joint
Military Force were wounded in the attack, and claimed to have sunk
two of the attacking speed boats with the loss of all hands.


28. (U) TWO NIGERIAN CHILDREN KIDNAPPED: Press reported on October
22 that two Nigerian children were kidnapped from in front of their
school in Port Harcourt, Rivers State. No group has claimed
responsibility. (Note: Family members of Nigerian oil workers and
local politicians are often targeted for kidnapping by criminal
gangs. The press did not specify the employer of the childrens'
parents. End Note.)


29. (U) MILITANT BOAT CAPTURED: The Nigerian military claimed to
have killed five militants in a clash during a routine naval patrol
on October 23. The militants allegedly attacked the navy vessel
from three speed boats and one of the militant boats was captured in
the skirmish.


30. (SBU) FISHING TRAWLERS ATTACKED: A contact with the Nigerian
Trawler Owner's Association told Poloff on October 25 that in five
separate incidents on October 25, three oil supply vessels and six
fishing trawlers were attacked. One of the oil supply vessels was
boarded, run aground, and held for roughly six hours before being
released. Another supply vessel was boarded and the crew robbed.
The third oil supply vessel eluded the attackers. Five fishing
trawlers were captured and the crews held for ransom, which was paid
October 28 into a bank account with a major Nigerian bank. The
sixth fishing vessel was captured, run aground, and the crew robbed
and terrorized by an entire coastal village. A plea by the vessel's
owner to MEND resulted in the crew being rescued and released, and
the vessel and equipment returned.

OIL AND GAS
--------------


31. (SBU) NIGERIA CANCELS SOME OIL CARGOES: On October 30, Reuters
reported that Nigeria has cancelled some oil cargoes scheduled for
delivery in November and December citing recent cuts in its OPEC
quota. (Comment: That explanation is suspect for a couple of
reasons. NNPC spokesman said Nigeria will cut five cargos in
November and seven in December. That is more cancellations than
necessary given an average cargo of 900,000 barrels and the 113,000
barrels per day (bpd) reduction in Nigeria's OPEC production quota.

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In any case, Nigeria is producing oil below even its new OPEC
production quota of 2.05 million bpd; it doesn't need to cancel
deliveries. Econoffs met with a long-time local oil company contact
on October 28 who reported that several of the Nigerian companies
that off-take crude from the Nigerian National Petroleum Corporation
(NNPC) are insolvent and reneged on their obligation to take
delivery of NNPC crude oil. Additionally, falling oil prices have
meant severe losses to these crude oil lifters who, the contact
said, paid a fixed "fee" to senior government officials for the
right to receive Nigerian crude oil, counting on rising oil prices
to turn a profit. The reduced OPEC quota may have provided a
convenient cover story to explain away these defaults. End
Comment.)


32. (SBU) NIGERIA'S CURRENT DAILY OIL PRODUCTION: On October 15,
Foreign Minister Ojo Maduekwe told reporters that Nigeria's current
daily oil production was 1.5 million bpd. (Comment: The foreign
minister's estimate sounds low, although other Nigerian officials
have not been quick to correct him. The general consensus for daily
production is 1.95 million bpd. The fact that 1.5 million bpd is
even plausible is an indicator of the deteriorating state of
Nigeria's oil industry. End Comment.)

SANDERS