Cablegate: Nigeria: Successful Agoa Workshop and Shea Butter Site

VZCZCXRO9895
PP RUEHMA RUEHPA
DE RUEHUJA #2601/01 3610648
ZNR UUUUU ZZH
P 270648Z DEC 07 ZDK
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC PRIORITY 1692
INFO RUEHOS/AMCONSUL LAGOS PRIORITY 8443
RUEHZK/ECOWAS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 03 ABUJA 002601

SIPDIS

SENSITIVE
SIPDIS

ACCRA FOR USAID/WATH
DEPARTMENT PASS TO USTR-AGAMA, EXIM-JRICHTER, TDA-EEBONG
TREASURY FOR PETERS AND HALL
DOC FOR 3317/ITA/OA/KBURRESS, 3130/USFC/OIO/ANESA/ DHARRIS, AND
USPTO - JKOEPPEN AND PSALMON
DOJ FOR MKOUAME
DOE FOR CGAY AND GPERSON
DOT FOR MARAD

E.O. 12958: N/A
TAGS: ETRD ECON EFIN EINV EAID PGOV NI
SUBJECT: NIGERIA: SUCCESSFUL AGOA WORKSHOP AND SHEA BUTTER SITE
VISIT

REF: A. ABUJA 2600

B. ABUJA 2593
C. ABUJA 2403
D. ABUJA 2178

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SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION

1. (SBU) Summary. The AGOA workshop presented an opportunity for
the Nigerian private sector to listen to and speak with GON and USG
officials on how Nigerian exporters have benefited and can continue
to benefit from AGOA. The private sector was well-represented and
flexible considering the last-minute schedule changes due to
speakers not showing up. GON and USAID/West Africa Trade Hub
(USAID/WATH) representatives explained how Nigeria has not taken
full advantage of AGOA and offered solutions to the challenges
hindering increased AGOA exports. The main problems are lack of
coordination between the GON and private sector, poor electricity
supply and other infrastructure and insufficient assistance from the
GON to exporters. The TIFA delegation visited two shea butter
processors that received technical assistance from USAID/WATH to
hear from rural exporters and were told that they need more USG
technical assistance. End Summary.
.
AGOA WORKSHOP
-------------
.
2. (SBU) On December 11, in Abuja, the fifth TIFA Council meeting
and an AGOA workshop took place. The U.S. delegation was led by
Florizelle Liser, Assistant United States Trade Representative for
Africa and included members from the Department of State, Commerce,
Agriculture, and agencies ranging from the African Development
Foundation to USAID Nigeria and the USAID West Africa Trade Hub.
The GON delegation was led by Minister of Commerce and Industry
(MCI) Charles Ugwuh, with Elizabeth P.B. Emuren, Permanent Secretary
(PS) at (MCI) leading the Nigerian side at the Council for most of
the day-long talks.
.
AGOA GOOD FOR NIGERIA
---------------------
.
3. (SBU) In her opening remarks, Deputy Chief of Mission Lisa
Piascik described how Nigeria benefits from AGOA - increased job
creation, improved standard of living, improved infrastructure from
meeting AGOA standards, and increased foreign exchange earnings from
exports. The DCM also noted Nigeria has several major challenges to
overcome to fully benefit from AGOA - fixing decaying
infrastructure, an unfavorable investment climate, intermittent
reversals in the economic reform process, lack of transparency in
trade policy formulation, the need for building greater capacity in
trade policy negotiation, better implementation and identification
of trade opportunities. She underscored that the objective of the
workshop was to increase Nigeria's non-oil exports to the U.S. under
AGOA.

4. (SBU) AUSTR Liser remarked that Nigeria's non-oil exports to the
U.S. were about $1.4 million in 2006, and that Africa's share of
world trade dropped from about 6% in the 1980s to less than 2% in
2006. She emphasized that if Africa could grow its share of world
trade by just 1% it would translate to over $70 billion annually in
income/wealth, which is greater than annual donor aid to Africa.

5. (SBU) PS Emuren said the focus of Nigeria's industrialization
policy is the development of infrastructure to support industries
for export and local consumption. She urged American investors to
collaborate in rehabilitating or building new oil refineries in
Nigeria. PS Emuren complained that the U.S. visa issuing process is
a major impediment to trade between Nigeria and the U.S. and should
be improved. She also urged the USG to help Nigerian manufacturers
build capacity in achieving packaging specifications and standards.
.
AGOA IMPLEMENTATION AND VISION 2020
-----------------------------------
.
6. (SBU) A.M. Lawal, Executive Director in the Nigerian Export

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Promotion Council (NEPC), delivered comments for Minister of State
for Commerce & Industry, Alhaji Ahmed Garba Bichi, who was to chair
the AGOA workshop but was a no show. Lawal said AGOA has helped
increase trade and promote economic development in Africa. AGOA has
been particularly helpful because it has non-discriminatory policies
regarding country of origin rules. He believes AGOA will assist
Nigeria's dream to become one of the top 20 largest economies by
2020. Lawal identified the following sectors as where Nigeria
should focus resources to increase exports - textiles and apparel
products, seafood products, footwear and leather products, crafts,
and agricultural products.

7. (SBU) Lawal described NEPC's efforts to increase AGOA exports:
-- Providing assistance to exporters on USG certification procedures
- shrimp exports.
-- Establishment of an apparel production training center in Lagos
that has trained 140 people and will deliver its first batch of
orders in January 2008.

8. (SBU) He said the key reasons for Nigeria's poor performance in
increasing non-oil exports were - policy and administrative
inconsistencies; inadequate infrastructure for industrial production
- especially power and transportation problems; poor access to
finance for SMEs; cumbersome Nigerian customs procedures; and
Nigerian exporters failing to meet agreed delivery times. Lawal
quipped "We must meet the standards. If other African countries can
do it, we should try too."

9. (SBU) Participants suggested that exporters must improve on
product quality, packing and labeling, increase local production
capacity, and asserted the Central Bank (CBN) should initiate
reforms to increase low-cost credit to SMEs. A CBN representative
answered that private sector reforms started in 2004, and
microfinance policies are in place to ensure that financial
resources are available. He noted the CBN guarantees credit to
enterprises or individuals for sums as small as 100,000 naira (70%
funded by bank and 30% by individual).

10. (SBU) O. B. Ayeni, representing the government agency Standard
of Nigeria (SON), commented that Nigerian exporters should become
more knowledgeable of Nigerian standards codes to better conform to
U.S. standards. She noted that the SON is willing to improve or
adopt foreign standards whenever they are required to boost
exports.
.
USAID/WA OVERVIEW OF AGOA IN NIGERIA
------------------------------------
.
11. (SBU) A representative from the USAID/WATH explained that AGOA
has not been as successful as possible in Nigeria because there has
not been a coherent dialogue between the GON and private sector. A
key ingredient missing in Nigeria is an AGOA coordinating committee,
which improves communication between the government and private
sector in other AGOA exporting countries. The USAID rep recommended
that the GON and private sector focus on the market and customer to
determine which products are in demand and then build capacity in
relevant national institutions dedicated to promoting those exports.
He cited four key areas - market research, creating acceptable
product labels, excellent product packaging and advertisement, and
frequent and targeted trade shows and missions.
.
NIGERIAN PRIVATE SECTOR PERSPECTIVE
-----------------------------------
.
12. (SBU) Representing the private sector, Asibong Eneobong,
Director of the Abuja Liaison Office of the Manufacturers
Association of Nigeria (MAN), remarked that his organization's
immediate interest in AGOA is increasing textile/apparel exports.
MAN believes supporting AGOA will stimulate and grow industrial
capacity and exports. He underscored that the major impediments to
manufacturers are - poor and irregular supply of electricity, the
high cost of generating alternative power, disruption of the natural
gas network due to vandalism and shutdowns, and the growing cost of
raw material inputs such as cotton and cereals.

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13. (SBU) He commented that inconsistent GON policies and reforms,
and non-implementation of policies have hurt manufacturers. For
example, after almost two years, the GON has yet to disburse to the
textile industry any portion of the 70 billion naira assistance
fund. Also policies are reversed without notice and prior
consultation, such as the Export Expansion Grant (EEG) abruptly
suspended in 2005. Eneobong opined that the GON needed to implement
consistent policies and address decay in infrastructure and
transportation sectors.
.
VISIT TO SHEA BUTTER PRODUCERS
------------------------------
.
14. (SBU) On December 9 the TIFA delegation visited two shea butter
producers in Minna, Niger state, who are working with USAID/WATH.
The delegation observed a small scale mechanized shea processing
firm in Minna township and traveled to a small farm village to
examine traditional shea butter production processes. The shea
processors told us that only 30% of the total available supply of
nuts is collected and processed. The processors lamented that they
receive larger profits from selling raw shea nuts than processing
because local value for the shea butter is low. Another issue
hindering production is the unreliable supply of electricity from
the national grid. They noted processing shea butter with a
generator is unprofitable. Another problem is that the process
requires clean water and the village processors have difficulty
finding clean water.

15. (SBU) The processors asked for technical support and training to
improve their shea butter quality, a dedicated borehole to increase
the supply of clean water, technical support for the quality control
laboratory at the Federal University of Technology in Minna, and
assistance in building a storage facility/collection center in the
village. The delegation was impressed with the quality of shea
butter produced, the level of organization, and cooperation between
the private and public sectors.
.
COMMENT
-------
.
16. (SBU) The AGOA workshop was well-attended by eager and
interested private sector representatives who expressed strong
interest in learning more about AGOA, how U.S. assistance can help
and what the GON is doing to assist Nigerian exporters. Tom
Herlihy, Chief of Party for the USAID/WATH expressed disappointment
that the AGOA workshop Chairman, Minister of State for Commerce &
Industry, Alhaji Ahmed Garba Bichi, and other speakers that had
promised to participate did not appear. He was pleased with the
lively participation of Nigerian business people in attendance, and
noted they are interested in exporting and taking advantage of AGOA,
but have questions on how to start the process.

SANDERS

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