VZCZCXYZ0002
RR RUEHWEB
DE RUEHUJA #0147/01 0391520
ZNR UUUUU ZZH
R 081519Z FEB 10
FM AMEMBASSY ABUJA
TO RUEHC/SECSTATE WASHDC 0213
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHOS/AMCONSUL LAGOS
RUEHUJA/AMEMBASSY ABUJA
UNCLAS ABUJA 000147
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ECON EFIN PREL PINR OVIP NI
SUBJECT: SCENESETTER FOR CODEL MEEKS/WATT VISIT TO NIGERIA, FEBRUARY
15-16, 2010
1. (SBU) The U.S. Mission to Nigeria warmly welcomes the visit of
CODEL Meeks/Watt to Nigeria to visit Lagos February 15 and 16.
Embassy provides the following political and economic overview of
the current situation in Nigeria.
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RELATIONSHIP STRESSED BY RECENT EVENTS
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2. (SBU) During Nigeria's fifty years of independence, the strength
of our bilateral relationship originated largely from the positive
view that most Nigerians held of both the USG and the American
people. Nigerians remain broadly sensitive to their image among
Americans, and many desire international approval and respect for
their perceived role as a regional and continental power. The
current relationship has come under strain by the recent listing of
Nigeria for aviation security purposes as a "country of interest"
after the attempted bombing of a U.S. aircraft by a Nigerian
citizen. Nigerian officials and many private citizens remain angry
at the designation, calling it discriminatory and unfair. The
decision to put Nigeria on this list could also influence GON
decisions on peacekeeping and on votes before the United Nations
Security Council. Political leaders have recently toned down their
rhetoric and appear to understand our concerns over outside links
with extremists. Nearly all Nigerian Government (GON) leaders
remain favorably disposed towards approval soon of a memorandum of
understanding permitting the use of U.S. Federal Air Marshals on
U.S. commercial flights to and from Nigeria.
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DOMESTIC ENVIRONMENT
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3. (SBU) President Yar'Adua, elected in 2007 and eligible to run
for a second term in 2011, has been absent from Nigeria since
November 23 while undergoing medical treatment in Saudi Arabia.
Vice President Goodluck Jonathan has cautiously assumed some
presidential duties in the meantime, avoiding the appearance of
seeking the presidency prematurely. Divisions between Northern and
Southern politicians and competition among potential successors for
the Vice Presidency have complicated decision-making. Political
pressure from multiple quarters, including parts of the ruling
party, is building on the Yar'Adua loyalists in the government to
transfer formal presidential powers to the Vice President.
4. (SBU) President 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 during his 2007 presidential campaign. In his inaugural
address, he acknowledged "flaws" in the electoral process and
promised to redress them. However, actions have fallen short of
promises. The Electoral Reform Committee (ERC) established by
President Yar'Adua established in 2007 produced a comprehensive set
of recommendations on electoral reform, but a GON paper recommended
adoption of only a few of the recommendations, which have
languished before the National Assembly. The February 6
gubernatorial election in the southeastern state of Anambra will
present a key test of GON willingness and capability to conduct
credible elections. A U.S. and the U.K. assessment team met with
various civil society groups and the Independent National Election
Commission (INEC) to assess Nigeria's ability to hold credible
national elections in 2011. Election observers from the U.S. will
be in Anambra State February 5-8 to watch a key gubernatorial
election there that has become a test case for the Nigerians to
conduct a credible election.
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NIGER DELTA AMNESTY
-------------------
5. (SBU) The Niger Delta largely enjoys a current lull in
militancy. By October 2009, the GON persuaded all major militant
leaders to renounce violence and surrender arms in exchange for
amnesty, government stipends, training opportunities, and pledges
of greater development for the Delta. Nigerian officials followed
up the amnesty program with a series of consultations with Delta
stakeholders, including 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 2009 offering to engage on the Niger Delta, but have yet
to receive a reply. Concerns exist that ex-militants may become
impatient before the full implementation of rehabilitation programs
occurs. Allegedly speaking for the Movement for the Emancipation
of the Niger Delta (MEND), self-identified spokesperson "Jomo
Gbomo" announced January 30 the end of MEND's October 25, 2009
cease-fire. To date, security has improved considerably in most
areas of the Delta, but ex-militants have staged protests in
Bayelsa, Rivers, and Delta States over lack of progress on
rehabilitation and reintegration.
6. (SBU) During the past six months, the GON has undertaken a few
modest steps against corruption. In August 2009, for example,
Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi ordered
the audit of Nigeria's 24 banks. Two rounds of audits led to a 3.9
billion-dollar bailout of eight troubled banks, replacement of top
bankers, publication of a "name and shame" list of hundreds of bad
debtors, and recovery to date of ten percent of the bad debt. A
retroactive ten-year term limit has also been placed on the sitting
managing directors of all the banks. In late October, a Nigerian
judge convicted the former Nigerian Port Authority chairperson on
various corruption charges and ordered his immediate imprisonment
for up to eight years. However, many perpetrators of corruption
appear to possess little or no fear of punishment for their
offenses.
7. (SBU) The State Department designated Nigeria in 2009 as a
"Category One" country for its efforts against trafficking in
persons thanks to the work of the Nigerian Agency for the
Prevention of Trafficking in Persons. The Nigerian Drug and Law
Enforcement Agency (NDLEA) agreed to accept assignment of a law
enforcement advisor at its headquarters to provide technical
assistance. The Mission witnessed some progress on long-standing
extradition cases.
8. (SBU) On trade and development, Mission efforts have led to the
elimination of import bans and decreases in tariffs on key
products, decreasing the cost of doing business and reducing
incentives for smuggling. The Mission helped the GON solve
regulatory and policy problems to allow increased electricity
supplies, boost agricultural production, and help establish
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. The Federal
Aviation Administration (FAA) provided a two-year, GON-reimbursed
technical assistance program on aviation safety and security in
2008 and 2009 to the Nigerian Civil Aviation Authority (NCAA) in
preparation for a planned FAA flight safety audit in early 2010.
The NCAA passed all elements of the program that would make them
eligible for FAA Category One certification. The GON hopes to
obtain this certification by mid-2010.
9. (SBU) Bilateral military cooperation remains strong. The third
African Partnership Station (APS) deployment in the last two years
will occur February 10-17. U.S. contractors installed Regional
Maritime Awareness Capability (RMAC) radar sites in Lagos and Bonny
Island, and the Mission is helping to stand up a military
counter-terrorism unit. Nigerian troops participated in
peacekeeping operations in Darfur and Liberia with the help of
Africa Contingency Operations Training and Assistance (ACOTA). The
GON remains interested in working closely with the Economic
Community of West African States (ECOWAS) to promote regional
security where needed.
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CHALLENGES
----------
10. (SBU) Important legislation affecting the petroleum industry
and oil and gas services remain under consideration by the National
Assembly. The proposed Petroleum Industry Bill (PIB) and Local
Content Bill (LCB) would respectively affect GON relationships with
international oil and gas production and service companies
operating in Nigeria. Depending on their ultimate content, they
could affect corporate profitability and the willingness of foreign
companies to make new investments in Nigeria in the oil and gas
sector. Shell, Total and Agip recently announced a decision,
pending GON approval, to sell their 45 percent minority interest in
three onshore oil blocks to two Nigerian oil companies.
11. (SBU) Lower oil prices and more "shut-in" oil production in the
Niger Delta, beginning in late 2008, lowered GON revenues.
Off-setting this trend, accession by militants to the GON's amnesty
program allowed production to rebound from an estimated 1.6 million
barrels per day in August 2009 to just under 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. (Note: These figures exclude
up to 500,000 barrels per day of condensates. Nigeria's OPEC quota
is currently 2.2 million barrels per day, excluding condensates.
End Note). The GON offset the decline in 2008 and 2009 revenue by
drawing down the Excess Crude Account (a type of "rainy day" fund)
to fund the National Integrated Power Project and distribute
additional funds to national, state, and municipal governments.
Gross Domestic Product (GDP) growth is expected to have declined
from 6.4 percent during 2008 to something above 3.0 percent during
2009, according to the latest IMF estimates. Growth in 2010 is
expected to be 6.0 percent, although this will depend on the
continuation of the recent recovery of both international oil
prices and domestic oil production. Meanwhile, total foreign
exchange reserves declined from 63 billion dollars in August 2008
to 43 billion dollars at the end 2009, while the Excess Crude
Account declined from 20 billion dollars in January 2009 to 6.5
billion dollars at year's end. The recovery of both oil prices and
oil production should allow the GON to rebuild both foreign
exchange reserves and the Excess Crude Account.
12. (SBU) In the north, violent clashes erupted in four states in
July 2009 after supporters of an Islamic extremist group, "Boko
Haram" ("Western Education is Forbidden"), attacked police stations
and other government facilities. This provoked police and military
sweeps in several states suspected of harboring "Boko Haram"
members and sympathizers. The group opposes western education
models. Nigeria's Islamic leaders strongly condemned the attacks.
The Nigerian army restored order, but clashes between security
forces and militants reportedly resulted in about 700 mostly
militant deaths. The leader of this group died while in police
custody, and many "Boko Haram" members remain incarcerated or
outside public view.
13. (SBU) In mid-January, communal violence erupted again in Jos,
in Plateau State, causing hundreds of deaths, considerable damage
to property, and displacement of thousands of residents, mostly
from Plateau State to neighboring states, but also, more recently,
from neighboring states to Plateau State as Bauchi State announced
its inability to guarantee the safety of Plateau citizens in Bauchi
State. The Vice President ordered deployment of military and
police units to Jos to restore order and subsequently visited the
affected areas. Both Muslim and Christian leaders condemned the
violence.
14. (SBU) In December 2009, Nigerian national Umar Farouk
Abdulmutallab allegedly attempted to detonate an explosive device
on a U.S. commercial airliner shortly before landing at Detroit's
international airport. Nigeria's Muslim community roundly
condemned Abdulmutallab's reported 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 has
harmed Nigeria's image and interests.
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CONCLUSION
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15. (SBU) The December 25 attempted attack on a commercial airliner
has complicated bilateral relations, but the USG continues to
promote key priorities on electoral reform, the Niger Delta and
regional security, anti-corruption, energy, investment, and the
expansion of commercial aviation. President Yar'Adua's prolonged
absence from the country continues to affect domestic governance
operations, investment, and relations with the international
community. A less than credible election in 2011 could seriously
harm interests here. Meanwhile, the USG should not lose sight of
the long-term challenge of working with Nigerian partners on
numerous shared interests, including deterring or treating HIV/AIDS
(cumulative PEPFAR funding to date is about 1.5 billion dollars),
addressing educational needs, and enhancing law enforcement and
counter-terrorism capacities.
16. (U) Embassy and ConGen Lagos collaborated on this telegram.
SANDERS