US embassy cable - 04ABUJA243

UNCLAS ABUJA 000243 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, PGOV, PREL, NI 
SUBJECT: MEETING WITH PRESIDENT'S PRIVATE SECRETARY ORONSAYE 
 
 
SENSITIVE BUT UNCLASSIFIED, NOT FOR PUBLICATION ON THE 
INTERNET OR INTRANET. 
 
1. (SBU) SUMMARY:  Charge met with the Private Secretary to 
the President Steven Oronsaye February 10 on the occasion of 
a visit by AF/W Nigeria Desk Officer Dan Epstein. 
Highlighting the imminent production of the National Economic 
Empowerment and Development Strategy (NEEDS), Oronsaye lauded 
President Obasanjo's successes in reform while expressing 
reservations over the implementation timetable.  He claimed 
that the Economic and Financial Crimes Commission (EFCC) was 
performing well on corruption, and that the NEEDS program 
would produce growth.  He said the GON had not capped 
gasoline prices, merely set an upper limit, in the highly 
political fuel deregulation issue.  Oronsaye added that 
gasoline was still being subsidized, but not nearly as much, 
nor in the same way, as before.  END SUMMARY. 
 
2. (SBU) Oronsaye stated that he "does not talk politics," 
but he was open in discussing various economic and reform 
issues.  When asked if Obasanjo's economic reform efforts 
would succeed, Oronsaye said "it will take the grace of God," 
but was possible.  He claimed that Obasanjo was beginning to 
consult widely with all segments of society and make efforts 
to explain the need for reforms in every region of the 
country.  He criticized the President's naysayers, stating 
flatly that "Obasanjo knows it is good for Nigeria."  Even 
so, he expressed doubts over the pace of reforms.  "As an 
insider I know the reforms are good, but I wonder if we 
really need all of them immediately," he commented. 
 
4. (SBU) The President's secretary also claimed the 
anti-corruption campaign is "making progress."  The EFCC was 
doing well but some obstacles remain: loopholes in the laws; 
and the need for judicial reform.  "The judiciary needs to 
weed out those who don't belong," he said.  He also lauded 
the efforts of the President's Budget Monitoring and Price 
Intelligence Unit (BMPIU) headed by his colleague Dr. 
Ezekwesili, claiming that the efforts to make contracting 
transparent had saved the GON 50 billion Naira. 
 
5. (SBU) Looking forward, Oronsaye said the National Economic 
Empowerment and Development Strategy (NEEDS) document will be 
finalized and released "in the next few days."  This document 
will produce growth, he claimed, but he expressed concern 
that the associated state governments' SEEDS might run into 
trouble.  Some states lacked the capacity to produce the 
necessary documents, and did not really understand what a 
strategy should be.  He said the NEEDS document should be 
released in "the next few days." 
 
6. (SBU) Oronsaye thought the ongoing deregulation of fuel 
prices controversy stemmed from confusion over reintroducing 
the fuel price levy of one and one half Naira per liter.  If 
the levy had not been mentioned, Oronsaye stated, then the 
price increases would have been accepted.  "Labour thinks 
there is no reason to raise fuel prices for Nigerians," but 
the GON had no choice but to stop paying such a huge subsidy. 
 Moreover, the state-owned refineries were not functioning, 
and gasoline prices were too low to encourage private 
refineries.  In response to a question, Oronsaye claimed that 
the GON had not put a cap on fuel prices, but rather the 
GON's Petroleum Products Pricing Regulatory Agency (PPPRA) 
had published a price band that vendors were not to exceed. 
Since the PPPRA band is much closer to the landed cost of 
imported gasoline, the GON was saving at least 16 Naira per 
liter in subsidies over what it had been paying when 
Nigerians were paying only 26 Naira per liter.  Oronsaye did 
state that, while the amount of subsidy is not known, there 
will be in reality some form or another of subsidy as long as 
the price of gasoline imports remains higher than what 
gasoline sells for in Nigeria, although the subsidy is a tiny 
fraction of what it was before. 
 
7. (SBU) Responding to DeskOff's question on what the USG 
should do for Nigeria, Oronsaye stated that "the State 
Department is not fully aware of what is going on" in 
Nigeria.  The GON's debt service expenditures on domestic 
bonds is nearing its debt service on foreign debt.  In his 
pitch for debt relief, Oronsaye said it is not fair that the 
interest on our debt remains high while the prevailing 
worldwide rates are low.  The foreign debt was money that 
previous regimes had stolen, and it was no longer in Nigeria 
to be used for paying off either debt.  Making a pitch for 
Paris Club relief, he said "Whatever solution is found, the 
USG should take the lead if you think we are doing things 
right." 
ANYASO