SCENESETTER FOR THE VISIT OF DEPUTY SECRETARY OF

C O N F I D E N T I A L LAGOS 000013 SIPDIS STATE PLEASE PASS TO DEPARTMENT OF HOMELAND SECURITY DHS FOR LUTE, PLCY/OIA (BPIANTEDOSI) E.O. 12958: DECL: 01/30/2020 TAGS: PREL PGOV PINS NI SUBJECT: SCENESETTER FOR THE VISIT OF DEPUTY SECRETARY OF HOMELAND SECURITY TO NIGERIA, JANUARY 12-13, 2010 Classified By: Deputy Chief of Mission Dundas C. McCullough for reasons in sections 1.4 (b) and (d). This is an Abuja cable transmitted from Lagos due to a Cable Express outage. ¶1. (SBU) The U.S. Mission to Nigeria warmly welcomes the visit of Deputy Secretary of Homeland Security Jane Holl Lute. The following political and economic backdrop provides context for your visit. -------------- RELATIONSHIP STRESSED BY RECENT EVENTS -------------- ¶2. (SBU) President Umaru Musa Yar'Adua, elected in 2007 and eligible to run for a second term in 2011, has been absent from Nigeria since his departure on November 24 to Saudi Arabia for medical treatment. Vice President Goodluck Jonathan has been a reticent stand-in. Jonathan's lack of close confidants, division between North and South political classes over his ability to become president, and competing personalities aligning themselves ahead of 2011 elections have left the Government of Nigeria (GON) muddling along for the past six weeks. ¶3. (SBU) During his inaugural address, Yar'Adua announced a "Seven Point Agenda" to enhance electricity generation, food security, job creation, road construction, land reform, education, and stability in the Niger Delta. He also acknowledged and promised to redress flaws in the electoral system. Actual performance, however, has been poor. The report of the Electoral Reform Committee (ERC) took 20 months to produce, but only a few weeks for a Cabinet committee to gut. Remnants of the ERC's recommendations have languished in the National Assembly, however, the Chair told the Ambassador in mid-December he expected these to be considered early this year. The upcoming February 6 gubernatorial election in the southeastern state of Anambra is likely the last opportunity for the ruling People's Democratic Party (PDP) and GON to show it can conduct a proper election before the national 2011 elections. In response to a personal appeal from President Yar'Adua in late October, the U.S. and the U.K. chiefs of mission are jointly hosting a USAID/DFID team of technical experts January 11-30 to assess Nigeria's ability to hold credible elections in 2011. ¶4. (SBU) For the past half-century, the inherent strength of our bilateral relationship originated largely from the positive view most Nigerians held of both the USG and the American people. Nigerians are broadly sensitive to how they are seen by Americans, and many crave international approval and respect for their perceived primacy as a regional power. This support has been greatly affected by the repercussions following the Christmas Day incident in which a Nigerian citizen failed in an attempted attack on a U.S. jetliner near Detroit. While privately many Nigerians have shown their support of our actions to thwart terrorism, the Nigerian public has voiced its concern that it should not be viewed as a nation of terrorists due to the act of one of its citizens--some of whom argue that he became radicalized outside Nigeria. Following a January 6 Federal Executive Council meeting chaired by the Vice President, Nigeria's Minister of Information echoed the call by some Nigerian politicians to sever diplomatic ties with the U.S. due to the country's reported inclusion in the TSA's list of countries of concern requiring additional screening when flying into the U.S. -------------- ON THE BRIGHT SIDE -------------- ¶5. (C) One area of progress is the current lull in militant activity in the Niger Delta. Through a combination of force and payoffs, the GON persuaded all major militant leaders in early October to renounce violence and surrender arms in exchange for amnesty, government subsidies, training opportunities, and promises of more money and development for the Delta. The GON has followed up the amnesty program with a series of consultations with Delta stakeholders, including the ex-militants. United Nations Development Program (UNDP) partners sent a letter to Minister of Defense and Amnesty Committee Chairperson Retired General Godwin Abbe in December offering to engage on the Niger Delta, but has yet to receive a reply. All development partners in Abuja (including USAID and the EU) believe that the GON is more interested in funding, without strings attached, rather than technical assistance. Some concerns exist that the GON may not start serious rehabilitation efforts before ex-militants become more impatient for such help. Throughout November, security was greatly improved in most areas of the Delta, but ex-militants are protesting in Bayelsa, Rivers, and Delta states more frequently due to their frustration about the lack of progress on rehabilitation and reintegration by the federal government. The President's absence and lack of federal-state coordination have exacerbated the levels of frustration. ¶6. (C) On corruption, there have been a few positive moves. In August, Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi ordered the audit of all 24 of Nigeria's banks. The two rounds of audits led to a USD 3.9 billion bailout of eight troubled banks, replacement of top management at the same banks, publication of a "name and shame" list of hundreds of bad debtors--including many closely tied to the PDP and Yar'Adua personally--and recovery to date of ten percent of the bad debt. In late October, the former chairman of the Nigerian Port Authority (and Vice-Chairman of President Yar'Adua's 2007 presidential campaign) was convicted on various corruption charges and is in jail for up to eight years. Sanusi's actions in particular are seen as a small miracle, in part because they seemed to have been done with the clear approval and personal support from Yar'Adua. These modest steps aside, the enormity of systematic corruption in Nigeria--including oil bunkering--remains essentially unchanged. ¶7. (SBU) Last year, G/TIP promoted Nigeria's efforts against trafficking in persons to Category One thanks to the hard work of the Nigerian Agency for the Prevention of Trafficking in Persons. Also, the Nigerian Drug and Law Enforcement Agency has decided to accept an embedded retired DEA agent at its headquarters to provide technical assistance. The Mission has also made some modest progress in some of the long-standing extradition cases of interest to the USG. ¶8. (SBU) On trade and development, the Mission's efforts have led to the elimination of import bans and lower tariffs on key products, bringing down the cost of doing business and reducing incentives for smuggling. The Mission has helped the GON solve regulatory and policy problems to allow increased electricity supplies, boost agricultural production, and assist in establishing reliable regional and international markets, including use of the African Growth and Opportunity Act (AGOA). The Mission has also worked toward a healthy restructuring of the oil and gas sector, and toward improving aviation safety and security. For the past year, the Federal Aviation Authority (FAA) has provided technical assistance to the Nigerian Civil Aviation Authority (NCAA) in preparation for an FAA flight safety audit in January. Should the audit prove successful, the GON hopes to achieve FAA Category One flight safety status by the middle of this year. ¶9. (C) On the military side, bilateral cooperation is strong and growing. The third African Partnership Station (APS) deployment in the last two years is taking place February 12-18. Two Regional Maritime Awareness Capability (RMAC) radar sites have been installed (one in Lagos and the other in Bonny Island this month) and the Mission is helping stand up a counter-terrorism unit in the military. Nigerian troops continue to participate in peacekeeping operations in Darfur and LIBERIA with the help of Africa Contingency Operations Training and Assistance (ACOTA),and the GON has made clear its continuing interest in working with the Economic Community of West African States (ECOWAS) to promote regional security where needed. -------------- CHALLENGES -------------- ¶10. (C) There is a great deal of sensitivity in Nigeria regarding outside views on the Petroleum Industry Bill (PIB). Minister of Petroleum Resources Dr. Rilwanu Lukman cautioned international players last year on linking the interest of the IOCs to the PIB because of potential domestic political backlash, particularly during the run-up to the 2011 national elections. He explained that the PIB is intended to be a "100-percent Nigerian piece of legislation." He refused to be involved with the PIB once it was introduced to the National Assembly for fear that his name would be linked to the PIB in such a way that it would appear to be "his" bill instead of Nigeria's bill. He was subsequently pulled back into the legislative process when he was instructed by President Yar'Adua to address problems that arose during public hearings. Given this sensitivity, USG opinions about the PIB should not be shared in any press setting as it would be counterproductive to our efforts to get problems in the bill changed. There are also concerns about the Local Content Bill (LCB) which increases local content requirements for oil and gas services. There is strong domestic support for the LCB. As with the PIB, expressions of concern about the LCB should focus on the potential impact on Nigeria, rather than the potential impact on international oil and gas service companies. ¶11. (C) The twin blows of lower oil prices and more shut-in oil production in the Delta beginning in late 2008 decimated GON revenues. Militant surrenders under the amnesty program allowed production to rebound from an estimated 1.6 million barrels per day in August 2009 to 2.0 million barrels per day in December 2009, with the prospect of as much as 2.4 million barrels per day by mid-2010. The GON offset the decline in revenue in 2008 and 2009 by drawing down the Excess Crude Account to fund the National Integrated Power Project and distribute additional funds national, state, and municipal governments. GDP growth is expected to have declined from 6.4 percent in 2008 to 3.0 percent in 2009, according to the latest IMF estimates, which is still respectable in the current global economic environment. Meanwhile, total foreign exchange reserves declined from USD 63 billion in August 2008 to USD 43 billion at the end 2009, while the Excess Crude Account declined from USD 20 billion in January 2009 to USD 6.5 billion at year's-end. This decline in both foreign exchange reserves and the Excess Crude Account is expected to stabilize given the steady recovery of both oil prices and oil production in 2009. ¶12. (SBU) In the north, both poverty and poor governance have fueled Islamic extremist recruitment of marginalized groups, including disaffected youth. Violent clashes erupted in four states in July 2009 after supporters of an Islamic extremist group, "Boko Haram," attacked police stations and other government facilities provoking police and military sweeps in several states thought to harbor Boko Haram members and sympathizers. The group opposes western education models but has not targeted western nationals or interests. Extremist support remained spotty, and Nigeria's Islamic leaders strongly condemned the attacks. The Nigerian army crushed Boko Haram, but clashes between security forces and militants reportedly resulted in around 700 deaths, including innocent bystanders. Boko Haram's leader was killed while in police custody, and Boko Haram members are either in jail or underground. On August 17, Al-Qa'ida in the Islamic Maghreb (AQIM) issued a "Statement of Consolation, Advice, and Condolences to our Brothers and family in Nigeria." ¶13. (U) A separate outbreak of violence occurred in Bauchi State in December 2009 after local residents expressed concern to authorities about aggressive, open-air preaching by members of an Islamic sect known as "Maitatsine" or "Kala Kato." Sect members reportedly questioned the July crackdown by security forces on Boko Haram members and ridiculed others, possibly including members of their own sect, calling them "infidels." Security personnel responded to the scene and quelled the violence, but clashes resulted in an estimated 40 deaths. Bauchi State Police Chief Aikur Kafur said security officials arrested 20 individuals, including 11 juveniles, and claimed that security forces had killed the sect's leader, Mallam Badamasi, and recovered "bomb-making tools and explosives." ¶14. (SBU) In December 2009, Nigerian national Umar Farouk Abdulmutallab attempted to detonate an improvised explosive device (IED) on a U.S. commercial carrier arriving at Detroit airport from Amsterdam. Abdulmutallab later admitted to obtaining the IED and receiving training in its use from al-Qa'ida operatives in Yemen, where he was enrolled as a student at the Sanaa Institute of Arabic Studies (SIAS). Nigeria's Muslim community roundly condemned Abdulmutallab's actions in unconditional and unequivocal terms. Several Muslim organizations issued public statements condemning violence as un-Islamic, emphasizing Islam as a religion of peace, and voicing concern that this incident will be injurious to the Nigerian national interest. -------------- CONCLUSION -------------- ¶15. (SBU) While our bilateral conversation has recently become clouded by the Christmas Day incident in Detroit, we continue to promote with the Government of Nigeria an agenda that addresses key USG priorities, namely: Electoral Reform, the Niger Delta and Regional Security, Anti-Corruption, and Energy and Investment. ¶16. (C) The wild card in Nigerian politics and for our bilateral relationship is the possible transition to a Jonathan presidency should Yar'Adua's die. His prolonged absence continues to weigh heavily on this country's ability to function domestically and interact with the international community. Moreover, a failed election in 2011 would seriously damage all USG equities--from democratization efforts to polio eradication to Niger Delta stability to reduced gas flaring--in all parts of Nigeria. Meanwhile, we should not lose sight of the long-term challenge of working with our Nigerian partners in government and civil society to promote economic and social development, combat corruption, and address a multitude of shared interests, from HIV/AIDS to law enforcement. BLAIR