US embassy cable - 04ABUJA1519

UNCLAS SECTION 01 OF 04 ABUJA 001519 
 
SIPDIS 
 
SENSITIVE 
 
DEPT PLEASE PASS TO AF/PD FOR A. JOHNSON 
IIP/G/AF- TJDOWLING 
LAGOS PLS PASS TO IRO W. SIMMONS 
 
E.O. 12958: N/A 
TAGS: PGOV, ETRD, ECON, NI 
SUBJECT: AMBASSADOR'S VISIT TO KANO AUGUST 4-6, 2004 
 
REF: ABUJA 825 
1. (U) Summary and introduction.  Ambassador Campbell made 
his first visit to Kano as US Ambassador August 4-6, 2004. 
The Ambassador dedicated an American Corner at the Kano 
State Library, met with the Governor, the Emir, and the 
Deputy Governor, and hosted a major reception for northern 
dignitaries.  Three months after the riots (reftel) in Kano, 
the city appeared quiet and on the mend, but the erosion of 
the state's manufacturing base is reducing economic 
opportunities and could fuel further unrest.  End Summary 
and introduction. 
 
2. (U) The reception brought together business leaders and 
other notables in Kano, a city of eleven million people and 
Nigeria's second largest.  Kano is Nigeria's Chicago, a 
major manufacturing center and historically the market 
crossroads of northern Nigeria and other Sahel countries. 
That crossroads makes it an important post for outreach to 
the Muslim community.  Essentially for the same reason, it 
played a role in re-infecting several other African 
countries with polio when Kano's governor banned the 
immunization effort there for several months this past year. 
The Ambassador's speech touched on both these issues, and on 
our efforts to expand Nigerian exports under AGOA, on the 
need for Nigerian democracy, transparency and anti- 
corruption efforts to succeed, and on our standing with 
Nigerians against ethnic/religious conflict in their 
country. 
 
-------------------------------------- 
Meeting with Governor Ibrahim Shekarau 
-------------------------------------- 
 
3.  (U) The Ambassador said he is happy that the scars of 
the May violence seem to be disappearing, and to see the 
polio vaccination program finally getting underway.  He said 
he would mention these positive developments and the AGOA 
textile visa for Nigeria in his remarks at a reception the 
next evening, and he asked how Kano State's economy is 
doing. 
 
4. (U) Governor Shekarau said he welcomed the textile visa 
and offered to do anything he could to get Kano textile 
manufacturers to take advantage of it.  He added, "We (Kano 
State Government) want to support such programs." 
 
5. (U) Shekarau then painted a dismal picture of the state's 
economy.  He said Kano's industries have all been going 
downhill since before his election.  The Nigerian Electric 
Power Authority (NEPA) cannot provide power, and his request 
to NEPA to give priority to industries has gone nowhere. 
Oil-related product prices are too high and still rising. 
Fuel oil is hard to get, even at high prices, to run the 
generators that the textile and other industries need in the 
absence or unreliability of NEPA electric power.  Higher 
transportation costs have raised prices at each stage of 
production, including of agricultural goods.  And inflation 
fed by all of the above is causing workers to continually 
ask for higher wages, which prices many industries out of 
Kano. 
 
6. (U) Shekarau noted that his predecessor had started work 
on an independent power project for Kano state.  His 
administration is now putting out a request for proposals. 
It is also considering recycling rubbish to produce electric 
power, and is working with an American company in Texas on a 
generating plant. 
 
7. (SBU) The Ambassador asked about Islamiyyas (Koranic 
schools), and specifically if their graduates are finding 
jobs.  Shekarau said they are, because Kano state introduced 
vocational training into the Islamiyyas' curriculum 
following state funding of the Islamiyyas.  He later 
contradicted himself, however, by saying that while 
vocational training aims to make Islamiyya graduates self- 
employed, it will be a year or more before vocational 
training is introduced in some but not all of the 
Islamiyyas.  (Comment.  All other sources say that graduates 
of Islamiyyas are finding it as difficult as graduates of 
secular schools to find jobs, if not harder, and most are 
unemployed or underemployed. End comment.) 
 
8. (SBU) Shekarau also said the Kano State Government had 
been doing "reconstruction and enlightenment" even before 
the May riot, and that its reconciliation program is moving 
forward.  (Comment.  Every other interlocutor in Kano, 
including his Deputy Governor and an Imam who is involved in 
the reconciliation movement, said Shekarau and the state 
government had merely met with members of the Christian and 
Muslim communities, and had not achieved reconciliation. End 
comment.) 
 
-------------------------------------- 
Meeting with Deputy Governor Abdullahi 
-------------------------------------- 
 
9. (U) The Ambassador met with Kano's Deputy Governor, 
Engineer Magaji Abdullahi, and asked about the impact of the 
federal government's NEEDS program and its state government 
SEEDS counterpart.  (NEEDS stands for Nigeria Economic 
Empowerment and Development Strategy.) Abdullahi replied 
that what had been 300-500 light industries in Kano state a 
few years back is now down to fewer than 200.  For every 
5,000 jobs lost in the textile industry, 15,000 people have 
lost their livelihood through a ripple effect.  The state's 
electric power and other infrastructure is very bad, and the 
"Dutch Disease" effect of high world oil prices on exchange 
rates has priced Nigerian textiles out of of the Nigerian 
market.  Abdullahi added to Shekarau's remarks of the day 
before (he had been in the same meeting) that Kano is 
seeking U.S. investors for independent or state-owned power 
projects in the state.  Abdullahi said U.S. companies would 
be coming to Kano with block-making machinery to build urban 
housing, and probably a plant to convert waste to energy. 
 
10. (SBU) Abdullahi also added to Shekarau's remarks on 
Islamiyyas.  He said the Kano government would divide them 
into three categories based on their readiness to cooperate 
with the state government.  Only the Islamiyyas that will be 
prepared to accept state funding will be offered vocational 
training.  He said this tactic would break the "mallams 
(teachers) dependence on their students begging."  (Comment. 
Abdullahi was referring to the "majire" problem of poor 
students coming to study under a scholar who teaches them 
perhaps a few hours a day, after which they are turned loose 
to beg on the streets.  End comment.) 
 
11. (U) Abdullahi also said he attended the National 
Institute of Public Management in Washington in 1979. 
 
--------------------------------------------- 
Meeting with the Emir of Kano, HRH Ado Bayero 
--------------------------------------------- 
 
12. (U) The Ambassador made a courtesy call on Kano's 
traditional ruler, His Royal Highness Ado Bayero, the Emir 
of Kano.  The Emir apologized for the few minutes delay in 
seeing the Ambassador, as many people seek him out to 
resolve disputes.  In response to the Ambassador's inquiry 
about rainfall, the Emir said the rains had started early 
and had been adequate this year in most parts of Kano.  He 
regretted that many people have abandoned agriculture, the 
result being lower food production and emigration from the 
rural to urban areas.  The Ambassador replied that one of 
USAID's major focuses is facilitating development of 
Nigerian agriculture. 
 
13. (U) The Ambassador also mentioned U.S. assistance in 
combating the spread of HIV/AIDS in conjunction with the 
federal Ministry of Health, the State Government of Kano, 
and various NGOs.  The Emir agreed that HIV/AIDS is a 
scourge, but noted that Nigeria has had better luck in 
checking its spread than South Africa.  The Ambassador 
expressed pleasure that Kano has resumed polio vaccinations. 
The Emir expressed relief that we could now put recent 
events behind us and said the Kano State government is 
encouraging traditional rulers to support vaccination. The 
Ambassador replied that we have an opportunity to eliminate 
polio from the face of the earth and our collective efforts 
are essential to reach this goal. 
 
------------------------------------ 
American Corner and Press Roundtable 
------------------------------------ 
 
14. (U) The opening of the American Corner was the 
cornerstone of the Ambassador's program and an important 
gesture of goodwill to the Kano community.  There is much 
criticism of U.S. foreign policy in Kano (there has not been 
an American presence in the area since the closure of the 
USIS library a generation ago).  The opening of the American 
Corner was a crucial opportunity both to re-engage the Kano 
community, as well as to provide the embassy a chance to 
meet local leaders and the press in a positive setting. 
 
15. (U) The Kano State Library Board hosted a large and 
enthusiastic crowd at the event.  Deputy Governor Abdullahi 
attended the ceremony and gave remarks on behalf of the Kano 
State Government.  The American Corner event received 
positive press coverage and featured prominently in the Kano 
press.  Much reportage repeated quotes from the Ambassador's 
speech on the need for increased mutual understanding.  The 
Triumph, a state-owned newspaper, ran a front-page banner 
article headlined "US, Kano Sign MOU on American Corner," 
with a photo of the Ambassador and the Deputy Governor 
signing the MOU.  The language was positive, and there was 
also a center-page photo of the Ambassador's call on the 
Emir; the Ambassador and Deputy Governor shaking hands at 
the American Corner; and the State Commissioner of 
Education, Hajiya Balaraba Bello Maitama, giving her 
remarks.  The News Agency of Nigeria's wire service also 
reported positively on the event; its wire was picked up and 
distributed across Nigeria by the Federal Radio Commission 
of Nigeria (FRCN).  (Radio is the most widely followed news 
medium in Northern Nigeria.) 
 
16. (U) Besides the opening of the American Corner, the 
Public Affairs Section hosted a press roundtable.  The 
roundtable had two goals: to inform the Kano community of 
the true American position on certain issues, and to allow 
the Ambassador to introduce himself to the senior editors of 
important print and electronic media in Kano.  The intimate 
set-up appeared to diffuse press hostility, and though the 
questions were as sharp as PAS had anticipated, the overall 
tone was not hostile. 
 
17. (U) The Ambassador's points on immigrant visas were 
reported in a wire by the News Agency of Nigeria and 
broadcast by the FRCN.  The latter also ran the News Agency 
of Nigeria's wire on textile visas and AGOA. 
 
------------------------------------------- 
NEEDS and SEEDS in Kano:  No Implementation 
------------------------------------------- 
 
18. (U) While doing advance work with the Kano State 
Government, Econoff and Pol Specialist asked Governor's 
Permanent Secretary Fagge how state implementation of SEEDS 
(State Economic Empowerment and Development Strategy) was 
progressing.  This is the envisioned state-level 
implementation of the National Economic Empowerment and 
Development Strategy (NEEDS), Nigeria's much-vaunted 
economic reform and poverty reduction program. 
 
19. (U) In the presence of Econoff and Pol Specialist, 
Permsec Fagge phoned the Permsec of the Kano State 
Government Secretariat and then informed us that the Federal 
Government had not provided information about how it is 
implementing NEEDS to Kano State.  As a result, the Kano 
State Government has not developed a SEEDS implementation 
plan.  From Kano's perspective, NEEDS remains largely an 
abstraction. 
 
--------------------------------------------- ---- 
Private Sector in Kano:  Discouraging Environment 
--------------------------------------------- ---- 
 
20. (U) Econoff and Pol Specialist talked with many other 
established businessmen and women during the advance work 
for the Ambassador's trip.  Most expressed pessimism about 
short- and long-term prospects. 
 
21. (U) Alhaji Bashir Borodo, the National Vice President of 
the Manufacturers Association of Nigeria, related how he had 
gone into and then out of the ice business.  First, he had 
had to truck in water because of unreliable public supply 
and its low quality.  Then the Nigerian Electric Power 
Authority (NEPA) had cut the area's power supply so severely 
that whenever Borodo's plant was operating, neighbors 
complained about power failures.  Finally, Borodo ran the 
plant during only one shift, at night.  Since it takes ten 
hours to make one batch of ice, he finally concluded it was 
not worth it and so closed the plant. 
 
22. (U) Similarly, Dr. Junaid Muhammed, the former chairman 
of the National Assembly's Foreign Affairs Committee, 
related how he had tried to go into the soft drink business. 
He and his partners had bought the rights to bottle two soda 
brands, and he had taken a loan against his house to pay for 
his shares in the venture.  Soon they had to set up their 
own treatment plant to bring the water up to standard.  Then 
they had to install a large diesel fuel generator for 
electric power.  They had to import their concentrate from 
India, their bottles from Israel, and steel sheeting for the 
crown caps from yet another foreign country.  They also 
discovered that the poor condition of the roads required 
heavier budgeting for truck repairs, and security added a 
significant cost because of armed bandits on the roads. 
After revising their initial calculations, they found 
themselves 150 percent over budget.  The project was pursued 
five years without producing a single bottle.  The partners 
finally sold off the assets of the firm. 
 
23. (U) Various textile entrepreneurs, most of them Kano- 
born Lebanese, generally believe that AGOA will not confer 
major advantages.  Although Nigerian wages are competitive 
with those in East and South Asia and elsewhere in Africa, 
Nigeria's cost of production ultimately is higher because of 
lack of infrastructure.  Only one entrepreneur in the 
leather tanning business, a Mr. Visioni, thinks that AGOA 
will improve his company's prospects.  He manufactures 
leather, fine leather dyed in seasonal colors, which he 
ships to China by air, where it is made into Italian 
designer shoes.  His main Italian client is investing in 
production in Kano, he stated.  Still, even Visioni opined 
that no one could make a go of production in Kano unless he 
is willing to live there full-time and work hands-on. 
Visioni himself was born in Kano, as were his children. 
 
24. (U) Econoff and Pol Specialist also stopped by the 
offices of the Kano Chamber of Commerce and met several 
members of its board and acting managing director.  One 
board member expressed interest in developing alternative 
energy sources in Kano, particularly biomass power generated 
from municipal waste.  Since Kano has little electric power 
and much refuse, this option could address both problems. 
Other members hope that AGOA will boost the textile industry 
in Kano but conceded that, because of inadequate roads, 
electric power, and water supply, their production cost 
structure is uncompetitive compared to that of other low- 
wage countries.  Several members expressed hope that foreign 
firms will take part in the twenty-fifth Kano International 
Trade Fair November 27-December 6.  They also said the Kano 
Chamber of Commerce performs due diligence on potential 
members before allowing them to join the chamber.  If true, 
our Foreign Commercial Service and U.S. firms might benefit 
by working with the Kano Chamber of Commerce to gauge the 
bona fides of potential business partners in Kano. 
 
CAMPBELL