US embassy cable - 01ABUJA1956

UNCLAS ABUJA 001956 
 
SIPDIS 
 
 
US DEPT OF COMMERCE FOR ADVOCACY CENTER 
 
 
E.O. 12958: N/A 
TAGS: ETRD, EINV, ECON, PREL, NI 
SUBJECT: NIGERIA: PROCTOR AND GAMBLE 
 
 
REF: (A) USDOC 4484 (B) ABUJA 1918 (C) USDOC 4307 
 
 
1. Mission appreciates Department of Commerce's flexibility 
in redirecting the Secretary's letter to the Minister of 
Industries.  Please note that this does not imply an overall 
policy change away from commercial advocacy at the 
Presidential level as Ref A suggests.  Based on recent 
interaction with the President, Post feels that, in this 
case, P&G's interests would be best served with advocacy 
directed towards the Minister who will ultimately advise the 
President on P&G's requests.  Other cases may require other 
approaches, and Mission looks forward to consultations with 
USDOC as each individual case moves through the advocacy 
process. 
 
 
2.  Mission does not recommend sending courtesy copies of the 
letter to national legislators.  In general, the National 
Assembly is not directly engaged in commercial issues. 
Moreover, to our knowledge, P&G has not yet established a 
relationship with key legislators in its effort to build 
support for its proposals.  If such letters were delivered 
without prior due diligence to assure the likelihood of a 
sympathetic hearing, P&G could encounter opposition, 
particularly from legislators who may support a protectionist 
tariff on detergent.  On the other hand, if P&G were to 
specify legislators with whom they have already established a 
positive line of communication, copies of the relevant 
correspondence could be shared at a time P&G deems 
advantageous. 
 
 
3.  On August 3, EconCouns discussed tariff issues, including 
P&G's request for tariff reductions, with Manufacturer's 
Association of Nigeria (MAN) President Charles Ugwuh and 
Director General Olawale Akinpelu.  (MAN, which represents 
Nigeria's manufacturing and export sector, in the past has 
been a strong advocate of high tariff protection and, more 
recently, the stiff 100 percent customs inspection practices 
implemented at Nigeria's ports.)  According to Ugwuh, MAN, 
not surprisingly, desires tariff reductions (to zero) on 
capital equipment and raw materials for Nigerian manufactured 
goods (P&G's first two requests with the GON.)  The MAN 
President added that they also accepted eventual, but 
gradual, tariff reductions for all consumer products -- with 
commensurate improvement in both Nigerian infrastructure and 
the productivity of Nigerian manufacturers.  Thus, he did not 
oppose the principle of a paced annual reduction in the 
tariff for detergent that would gradually force P&G's 
domestic competitor to face stiffer market conditions. 
However, the idea of an immediate reduction to the level 
sought by P&G would be, Ugwah felt, politically unpalatable. 
 
 
4. Ugwuh and Akinpelu recommended the GON provide P&G a tax 
holiday equal to the difference in the GON tariff rate and 
the 25 percent tariff rate desired by P&G.  (As the tariff 
rate fell, so too would the tax break.)  They also felt P&G 
would have a stronger case if the company agreed to 
eventually import Ariel detergent in bulk for packaging in 
Nigeria, rather than importing the packaged Ariel product. 
Ugwuh pointed out that Industries Minister Jamodu was, 
despite his former ties to P&G's competitor, a "MAN man" and 
understood well the benefits of competition for both 
manufacturers and consumers.  A compromise between P&G and 
the GON along the lines outlined above, Ugwuy believed, would 
be a good basis for an agreement.  Mission has not yet 
informed P&G of its conversation with MAN. 
Jeter