THE DEFENSE LEVIES BILL -- A NEW WAY TO FUND

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 000074 SIPDIS DEPT FOR AF/W, INR/AA DOE FOR GEORGE PERSON E.O. 12958: DECL: 12/10/2018 TAGS: PGOV MARR MASS NI SUBJECT: THE DEFENSE LEVIES BILL -- A NEW WAY TO FUND NIGERIA'S MILITARY? REF: A. 08 ABUJA 313 ¶B. 08 ABUJA 2212 Classified By: Political Counselor Walter Pflaumer for reasons 1.4. (b & d). ¶1. (C) SUMMARY: On January 13, Poloff met with Chairman of the House of Representatives Defense Committee, Oluwole Oke, to discuss the Nigerian military budget and other defense-related matters. Oke reiterated Nigeria's commitment to the African Mission in Somalia (AMISOM),but called the USG $3 million equipment contribution a pittance. He then went on to describe a bill he was sponsoring called the Defense Levies Bill, which would require any business operating in Nigeria's coastal waterways to pay 1-2% of their revenues toward bolstering the Nigerian defense budget. Oke had few further details to share about the effects of the bill on Nigerian and international corporations, its overall impact on the budget, or its chances of being signed into law, but said that it was already working its way through the apparatus of the House. END SUMMARY. ¶2. (C) On January 13, Poloff met with Chair of the House Defense Committee Oluwole Oke to discuss Nigeria's military budget. Other members of the Defense Committee, including Vice Chair Paul Adah, were also present. Oke said that the 204 billion naira (around $1.5 billion) budgeted for the coming year was inadequate and could not address the military's most pressing needs, which he prioritized as a refit of the Air Force's fighters, new hardware for the Army, and, last, patrol ships for the Navy. He quickly moved on to AMISOM, and decried the USG's offer of $3 million in non-lethal equipment as insignificant given the overall costs of the operation. (Comment: Oke was totally unaware of the GON's well-publicized, on-again off-again purchase of Chinese F-7 fighter jets, pending since 2005 and variously put at $250 million or $550 million -- reftel A -- but agreed with Poloff that perhaps that money could be more practically spent toward improving Nigeria's own airlift ability. End comment.) ¶3. (SBU) Oke then described his own plan for increasing the funds available to Nigeria's armed forces -- the Defense Levies Bill. This bill would require any corporations, foreign or domestic, that operate off of Nigeria's coastline to pay 1-2% of their gross revenue toward the military budget. Complaining that the bill should have originated in the Executive Branch, and comparing Nigeria to Angola, which he claims has a similar law already in place, he said that it was already into its second reading on the House floor, having cleared Committee. When pressed for details, neither Oke nor Vice Chair Adah could give an estimate of how much extra money this would raise, how Nigerian and international corporations might respond, what effect it might have on the economy, whether the budgeted military allowance would be under pressure to be reduced given the new funding source, and at first was even unsure if this was a tax on profits or gross receipts. In fact, it appeared that neither man had even considered these issues. ¶4. (C) COMMENT: From this and past discussions, it's clear that Oke is trying hard to develop Nigeria's civilian oversight capacity over the military, as well as stake out Congressional authority against both the Executive branch and the uniformed services. But he is floundering and clueless -- he is pushing a bill, already in its second of three readings, for which neither he nor the Vice-Chairman of the Defense Committee could describe either its expected benefits for the military or its effect on the economy. Its chance of passage seems remote in anything like its present form as he described it. Furthermore, given Nigeria's national priorities -- its needs in the Niger Delta and the Gulf of Guinea, and its international peacekeeping commitments -- most observers would say that Oke's elaboration of the military's most pressing needs was exactly backward; while the Nigerian Air Force is indeed a force without airplanes, at this point Nigeria's major source of income -- oil -- is threatened by its inability to patrol its own waterways. ABUJA 00000074 002 OF 002 Last, he was completely unaware of not only the four-year pending F-7 sale, for which Nigeria claims to have already paid China $500 million, but also the early December delivery of the four Manta-class patrol boats, described in reftel B. END COMMENT. ¶5. (U) This cable was coordinated with Consulate Lagos. Piascik