NIGERIAN NUGGETS -- SEPTEMBER 11, 2009

C O N F I D E N T I A L SECTION 01 OF 04 ABUJA 001684 SIPDIS STATE FOR AF/FO, AF/W, INR/AA; STATE PLEASE PASS TO USTR (AGAMA); ENERGY FOR GPERSON E.O. 12958: DECL: 09/10/2019 TAGS: PGOV PHUM ECON EPET ETRD ELAB NI SUBJECT: NIGERIAN NUGGETS -- SEPTEMBER 11, 2009 REF: ABUJA 1644 Classified By: Political Counselor James P. McAnulty for reasons in Sections 1.4 (B) and (D) ¶1. (U) Mission Nigeria provides the following compilation of recent political, economic, and social developments, not mentioned elsewhere in formal reporting. -------------- -- ARREST WARRANT FOR YAR'ADUA'S PRIVATE SECRETARY -------------- -- ¶2. (C) British PolCouns Kate Arie confirmed London Metropolitan Police issued an arrest warrant for President Yar'Adua's Principal Private Secretary, David Edevbie. The warrant also mentioned by name former Delta State Governor James Ibori, Ibori's business partner, Henry Imasekha, and Ibori's London attorney, Bhadresh Gohil, who has already been arrested. The warrant cites money laundering and conspiracy to defraud. Authorities set the bail hearing for September 10 in London. The Nigerian Government (GON) responded publicly that it needed more evidence before taking actin against any of the accused. -------------- USAID JOINS FORCES IN PARTNERSHIP STRATEGY -------------- ¶3. (SBU) Simultaneously with updating its own bilateral strategy, the U.S. Agency for International Development (USAID) has joined forces with the African Development Bank (ADB),U.K. Department for International Development, and the World Bank in developing a Country Partnership Strategy (CPS) II. The CPS II partners account for over 80 percent of annual development assistance to Nigeria. By agreeing to a single joint strategy, the partners anticipate increased effectiveness of their support, closer coordination of their activities, and greater transparency in their relationships with Nigerian counterparts. The CPS pillars of non-oil growth, human development and governance, and USAID's five Assistance Objectives mutually reinforce each other and share common performance measures. CPS partners developed the strategy in close collaboration with Nigeria's Finance Ministry and National Planning Commission and gained approval from the Board of the World Bank. Partners plan national dissemination after the GON launches its national development plan in early October. -------------- APGA EXPELS ANAMBRA GOVERNOR PETER OBI -------------- 
¶4. (C) On September 2, the All Progressive Grand Alliance (APGA) ratified an earlier National Executive Committee's expulsion of Anambra state Governor Peter Obi. Governor Obi was expelled alongside a factional leader of the party, Chief Victor Umeh. Both men were accused of tarnishing the party's image. The Governor's expulsion undercuts his chances of securing the party's gubernatorial nomination and a second term in the February 6, 2010, election. He will most likely challenge his expulsion in court. (COMMENT: Independent National Electoral Commission Chairman Professor Maurice Iwu has sought to derail Obi's reelection by recognizing political rival Chekwas Okorie as the AGPA National Chairman in place of Umeh. Even with such maneuvers, the ruling People's Democratic Party remains just as divided. Should Obi win in court, he will likely not enjoy the support from APGA party leaders. Instead, he may join another party to seek the governorship or retire from politics and return to the banking sector. END COMMENT -------------- FOOD AID TO BE DELIVERED -------------- ABUJA 00001684 002 OF 004 ¶5. (SBU) The GON ordered the release of grains from the Strategic Food Reserve to cushion rising costs of food, according to the Nigerian Television Authority. Minister of Agriculture and Water Resources, Sayyadi Abba Ruma, announced the sharing of 25,000 metric tons of grain among states and organizations, including the Nigeria Labor Congress. -------------- FEDERAL BUDGET MID-YEAR ACCOUNTING -------------- ¶6. (SBU) The House of Representatives Speaker Dimeji Bankole said the federal government has implemented 45 percent of the 2009 budget. The speaker, who chaired the national project management conference in Abuja September 9, remarked that much of the money allocated to national development had been misappropriated due to problems in project implementation and management. He also indicated that no unspent funds have been recovered from states and local governments. -------------- BANK LOAN RECOVERY EFFORT -------------- ¶7. (SBU) The Economic and Financial Crimes Commission (EFCC) announced September 9 the recovery of about 70 billion naira (450 million USD) out of about one trillion naira, from individuals and companies in debt to the five banks whose directors the Central Bank Governor had fired. Analysts warn the CBN's actions are focused more on debt recovery than giving out new loans, which could affect liquidity and credit availability. According to the local press, the five banks have not loaned money since August 14. -------------- GLOBAL COMPETITIVENESS RANKING FALLS -------------- ¶8. (SBU) In a survey on global competitiveness by the World Economic Forum, Nigeria dropped five places from 94 in 2008 to 99 in 2009 out of 133 nations ranked. Among 31 African nations in the survey, Nigeria ranked 13. -------------- - NEW INTERNATIONAL FINANCE CORPORATION STRATEGY -------------- - ¶9. (SBU) International Finance Corporation (IFC) country representative Solomon Quaynor told business executives September 1 about IFC's new strategy for engaging Nigeria. He said the IFC plans to diversify its financial interventions in Nigeria into the real sectors by prioritizing power and agribusiness projects in sectors with high potential and identified by the GON as priorities. Although he admitted that the IFC's preference for engaging with businesses through local banks may have reduced its impact on the small and medium scale industries (SMIs),he said the IFC plans to work closely with banks and private equity firms to finance projects in housing, insurance, and SMIs. -------------- DRAWING ATTENTION TO COPYRIGHT PIRACY -------------- ¶10. (U) the Nigerian Music Industry Coalition's call for a "No Music Day" on September 1 (Reftel) met with resistance from the National Broadcast Corporation, which expressed reservations about the legality of the move and claimed such action would violate broadcasting licenses. Although some Lagos stations, notably Silverbird's Rhythm FM, halted music for at least two hours and Inspiration FM played only foreign music all day, most stations ignored the coalition's appeal. -------------- -------------- VENEZUELAN AMBASSADOR DENIES GOV ROLE IN DRAFT PIB ABUJA 00001684 003 OF 004 -------------- -------------- ¶11. (C) Following remarks by Trinidad and Tobago High Commissioner about her country's consultations and capacity building efforts with the nascent Nigerian gas industry, Venezuelan Ambassador-designate Enrique Fernando Arrundell described to Poloff similar assistance the Venezuelans provided to Trinidad in the early days of the island nation's gas industry. When the conversation turned to Nigeria's oil and gas industry, PolOff inquired whether Venezuela had worked with the Nigerian National Petroleum Corporation (NNPC) or the GON on the draft Petroleum Industry Bill (PIB). Arrundell denied any involvement by his government and criticized the NNPC, saying the parastatal "operates for the benefit of only a few individuals, not for the benefit of the people." Arrundell continued, "This does not conform with our beliefs or philosophy, and we don't support this in any way." The Venezuelan insisted that any consultations would be government-to-government, and that he would be aware of any interaction between Venezuela's national petroleum company and NNPC. As an interesting footnote, Mexican Embassy DCM Miguel Guerrero Lechan told us September 8 that Arrundell has languished in Nigeria since March without presenting his credentials to the GON because Venezuelan President Chavez has failed to sign his papers. -------------- PLANNED POWER UPGRADES -------------- ¶12. (SBU) Manufacturer's Association of Nigeria (MAN) Director General Jide Mike told EconOff September 3 that MAN will build its independent electric power project in industrial clusters, rather than the more ambitious 2,000-megawatt plant that would rely on GON infrastructure for transmission and distribution. Private power providers will construct smaller plants that serve specific industrial clusters. Mike said U.S. company Westpark Petroleum plans to build 50-megawatt (or less) plants, with five of them in Lagos. The first cluster power plant of 20 megawatts is scheduled for completion in December in Ikeja-Lagos. First National Energy (FNE) Managing Director Geoffrey Onyejegbu told EconOff that FNE planned to build plants to generate 6.7 to 7 megawatts from municipal waste. He added that because the Nigerian power grid is in such a poor state, FNE intended to sell power directly to industrial clusters. -------------- MORE BROADBAND FOR NIGERIA -------------- ¶13. (U) According to the press, a 9,800 kilometer, submarine fiber optic cable designated "GLO 1" was off-loaded in Lagos September 5. The cable, to be owned and operated by Globacom Telecom, will offer direct competition to the SAT 3 cable owned by a consortium of African national telecom companies and make Internet access more accessible and affordable. This cable will link Nigeria to 14 other African countries and the United Kingdom, providing excess broadband capacity to all interconnected cities. A second submarine cable (designated "MainOne"),linking Nigeria and other African countries to continental Europe via Portugal, is planned for next year. -------------- THE PRICE OF MODERNIZING A MEGACITY -------------- ¶14. (SBU) As part of Lagos State's "Megacity Project" to boost trade and tourism, officials plan to build a 220 million naira, ten-lane highway and light rail to connect Lagos with the Republic of Benin. In July, the State Government began demolishing all structures, including homes and markets, within 60 meters of the current Lagos-Badagry four-lane expressway. Affected residents and many NGOs protested the demolition and harsh tactics employed. The ABUJA 00001684 004 OF 004 government paid no compensation, claiming that inhabitants constructed these properties without proper licenses. Lack of compensation, however, has hindered relocation of homes and businesses. -------------- TRANSFORMING PAST SORROW INTO FUTURE JOY -------------- ¶15. (SBU) The sleepy town of Badagry in southwestern Lagos state served as one of the most notorious ports of embarkation along the Gulf of Guinea during the transatlantic slave trade. Badagry leaders are now embarking on an ambitious vision to develop its nascent tourism sector, seeking U.S. investment to become a prime destination for Americans seeking to discover their ancestral roots in West Africa. The Consul General (CG) and Pol-Econ Chief recently visited the Badagry Heritage Museum and the 1842 Mission, the first two-story building in Nigeria. Each structure contains impressive artifacts which are decaying from the humidity and coastal climate. In a separate call at the Oba,s palace, the CG explored ways the United States might partner with Badagry to protect its valuable antiquities and encourage tourism. The Oba, whose royal lineage dates back to the 15th Century, warmly welcomed the CG and reported that his town is actively negotiating with the Motherland Group, LLC, a U.S.-based entity with investors including Marlon Jackson, the Jackson family, and other prominent business leaders. The group seeks to build the educational Badagry Historical Development Resort with hotels, restaurants, a museum, and a convention center between the Lagos Lagoon and the Atlantic beach with its historical "point of no return." Lagos State is considering a proposed memorandum of understanding for the venture and title for access to the land. -------------- NIGERIA SEEKS CONTINENTAL SHELF EXTENSION -------------- ¶16. (SBU) Despite press reporting that the United Nations (UN) had already approved its request, we heard that the GON has just submitted documentation to the UN Commission on the Limits of the Continental Shelf to support its request for extension of its continental shelf beyond the currently recognized 200 nautical miles, in compliance with Article 76 of the Convention on the Law of the Sea (UNCLOS). UNCLOS recognizes a continental shelf up to a maximum of 350 nautical miles when a state can prove &natural prolongation8 of a coastal shelf, no islands belonging to another sovereign nation exist in the claimed area, and the length of the coastline is sufficient. If the Commission recognizes an extension, UNCLOS grants nations the right to control up to 60 percent of the resources found in the extended area, while the remaining 40 percent remain international. Nigeria remains interested in the extension because of the high probability that oil and natural gas will be found in the area. Nigeria conducted extensive surveys to support their claim to the extended continental shelf, and negotiated beforehand with Cameroon, Togo, Benin, and Ghana with respect to its new claim. A decision is not expected until next year or later. ¶17. (U) Embassy and Consulate General Lagos collaborated on this telegram. MCCULLOUGH