NIGERIA: WARRI CHAMBER OF COMMERCE BLAMES FEDERAL

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E.O. 12958: N/A
TAGS: PGOV ECON EIND ENRG NI
SUBJECT: NIGERIA: WARRI CHAMBER OF COMMERCE BLAMES FEDERAL
GOVERNMENT NEGLECT FOR CRISIS IN THE NIGER DELTA


1. (U) Summary: The President of the Warri Chamber of
Commerce, Edema Abrakata, told Pol-Econ Chief, PolOff and
Office of Security Cooperation (OSC) representatives in
Warri, Delta State, on February 5 that the current crisis in
the Niger Delta was the result of neglect by the Federal
Government that lead to economic stagnation. Abrakata claimed
there had been no problem with militancy when the ports were
working, but Warri and other potentially valuable ports are
now silted up and the Federal Government has the sole
authority for coastal dredging. Abrakata also criticized the
Federal Government for neglecting the power sector. In
contrast, he praised the current state government under
Emmanuel Uduaghan (Peoples, Democratic Party - PDP) for its
efforts to revitalize the economy of Delta State with a
number of ambitious initiatives. The meeting with the Chamber
of Commerce underlined the limitations that private industry
has in making progress without adequate infrastructure that
remains the preserve of the Federal Government. End Summary.

Abrakata Claims Militancy a Function of Unemployment and Anger
-------------- --------------


2. (U) On February 5, Pol-Econ Chief, PolOff and OSC
representative visited the Warri Chamber of Commerce,
Industry, Mines and Agriculture and met with the Board at
their offices followed by a reception open to all members of
the Chamber of Commerce and Industry. The President of the
Chamber of Commerce, Edema Abrakata, opened the discussion by
acknowledging that insecurity was a great obstacle to
investment and economic development in the Niger Delta,
however, according to Abrakata the militancy of youth in the
region was largely the result of unemployment and anger over
the neglect of the region by the Federal Government.

Ports Key to Economic Development
--------------


3. (U) The unemployment situation in Delta State is in large
part a function of the silting up of the ports, according to
Abrakata. According to him, there was no militancy when the
ports were operating at capacity through the late 1980s. He
believes that unemployment among youths today could be
reduced by sixty percent if the ports were fully functional.
However, the Federal Government possesses the sole authority
for dredging coastal waters, and it has neglected to do so
for years, choking off Delta State's ability to prosper.

Unreliable Power Stifling Remaining Industries
-------------- -


4. (U) Even for those industries and businesses which can
survive without functioning ports, the power situation in the
state is critical. Abrakata pointed out that both Nigeria and
China have cheap labor, but China has reliable sources of
power while Nigeria does not. Abrakata blamed the Federal
Government for not providing sufficient power to support
industry in Nigeria. Delta State is to date fully dependent
per cent dependent on the national grid for its electric
power.

Governor Uduaghan Doing Well
--------------


5. (U) Abrakata and others at the reception said that
Governor Uduaghan appears to be making sincere efforts to
develop the infrastructure in the State, including lobbying
with the Federal Government for the vitally needed dredging
of the ports. They mentioned the creation of the Warri
Industrial Park, which is a public-private partnership with
private (bank) funding supported by state guarantees, as
another example of the current government's pro-business
initiatives. As conceived, the Industrial Park would have its
own power source, water, sewage and IT connections. Several

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members of the Warri Chamber of Commerce expressed
willingness to invest in an Independent Power Plant or,
indeed, in the production of power on a small scale using
alternative, renewable energy, and were interested in any
help they could get on technology from the United States.


6. (U) Comment: The meeting with members of the Warri Chamber
of Commerce underlined the extreme difficulties the Nigerian
private sector faces, particularly in less developed regions
of the country such as the Niger Delta. The inadequate
infrastructure with respect to roads, ports, power, water,
and information technology (IT) significantly handicaps
industrial and business development. It was particularly
important to hear about the deterioration in previously
functioning areas such as the ports. The bulk of the blame
for the poor state of infrastructure lies with the Federal
Government, which maintains a monopoly in the vital power
sector, dredging of coastal waterways, and also holds
responsibility for key federal roads. While Governor
Uduaghan's efforts are applauded by the Chamber and others,
it is not yet clear whether Delta State will have sufficient
means to completely circumvent the obstacles created by an
inactive Federal Government. End Comment.


7. (U) This cable has been cleared by Embassy Abuja.
BLAIR