US embassy cable - 02ABUJA1135

C O N F I D E N T I A L SECTION 01 OF 03 ABUJA 001135 
 
SIPDIS 
 
 
E.O.12958: DECL: 4/5/12 
TAGS: PGOV, PHUM, ECON, EFIN, NI 
SUBJECT: NIGERIA: ABUJA ROUND-UP March 25-April 5 
 
 
CLASSIFIED BY AMBASSADOR HOWARD F. JETER. REASON 1.5 
(B) AND (D). 
 
 
---------------------------- 
BATTLE OF THE BULGING BUDGET 
---------------------------- 
 
 
1. (SBU) On March 26, the National Assembly approved 
the 2002 budget of N1.06 trillion (USD 8.7 billion), a 
20 percent increase over the President's N841 billion 
(USD 7.25 billion) proposal. In a radio call-in 
program later that week, President Obasanjo signaled 
his intention to veto the measure because it would 
necessitate significant deficit spending.  Instead, he 
promised to confer with National Assembly leaders to 
prioritize projects within existing resources. 
Meanwhile, either believing that they had done their 
legislative duty or to escape criticism, both houses 
went into recess immediately after passing the budget 
- - leaving unexplained much of the detail of their 
measure, especially how they would finance it. 
 
 
2. (SBU) If, as the Appropriations Chair of the House 
claims, revenue assumptions are oil at USD 18 per 
barrel and production of 1.8 million barrels per day 
(b/d), GON projected revenue will be only N633 billion 
(USD 5.5 billion).  A far cry far from the N1.06 
trillion needed to balance the Assembly's proposed 
budget, and privatization -- particularly given the 
implosion of the NITEL sale -- can no longer be 
expected to cover much of the shortfall. The recent 
increase in world oil prices will help to some degree 
but not enough to bring the Assembly's desired budget 
into balance. 
 
 
3.  (SBU) Even with the deficit projected under the 
Assembly's proposed budget, the differential between 
actual and anticipated oil revenues may be treated as 
"excess oil proceeds" (any revenue above the budget's 
projected oil price).  In the past, the Administration 
withheld these funds from the Federation Account 
(which is distributed in a formula to Federal, States 
and Local Governments) to use them for discretionary 
projects outside the budget. In 2001, States and the 
National Assembly eventually forced the Executive to 
share some of these excess funds, resulting in a 
significant influx of liquidity that served to worsen 
inflation and increase downward pressure on the Naira. 
Should the GON begin to realize any "excess oil 
proceeds," there will be even more pressure from the 
States for access to some of these funds given the 
impending electoral season and the current fiscal 
crunch experienced by many states when oil prices fell 
after September 11. 
 
 
-------------------------- 
THE NORTH SHALL RISE AGAIN 
-------------------------- 
 
 
4. (SBU) On March 27 and 28, the Arewa Consultative 
Forum (ACF) marked its 2nd anniversary by hosting a 
seminar on peace and unity in Nigeria.  The two-day 
program consisted of three plenary sessions on issues 
relevant to Northern Nigeria; the second day was 
labeled a civic ceremony in which government officials 
addressed the forum about its goals. National unity 
and the survival of democracy were two of the first 
day's main issues.  Speakers the first day gave frank 
appraisals of the current strife between Muslims and 
Christians, this strife's effect on Nigeria's 
progress.  Former President Gowon quoted reading a 
"U.S. State Department Intelligence Report" in which 
the religious differences and ethnic fractures were 
described as moving from bad to worse. Rather than 
condemning the U.S. for the report, Gowon stated the 
report accurately reflected how Nigeria was viewed by 
the rest of the world.  He further stated that 
Nigerians must work to change this perception. 
 
 
5. (U) A member of the Oputa panel (Human Rights 
Violation Investigation Panel), Reverend Matthew Kukah 
also addressed the need for unity, declaring that 
Nigeria cannot survive if internally divided.  Kukah 
went on to say that if Nigerian democracy is to 
succeed the people must have realistic expectations of 
democracy and understand that citizens have certain 
responsibilities in a democracy as well. 
 
 
6.  (U) The second day of the forum was not quite as 
congenial.  In a talk entitled "Politics and the 
North," Governor Bafarawa (APP) of Sokoto State shot a 
broadside at the Obasanjo Administration. Billed as 
speaking on behalf of all 19 governors of the northern 
region, Bafarawa credited the North with political 
selflessness in backing Obasanjo for President in 
1999, because Obasanjo was seen as a "detribalized" 
leader at the time.  However, since then, Obasanjo has 
proven to be an ingrate. "Today, it is 34 months that 
the President has been in office.  Unfortunately, 
however, instead of helping the North to prosper, the 
foundations for sustainable development laid by our 
past leaders are regrettably being systematically 
destroyed with brazen recklessness." 
 
 
 
 
7.  (U) The Sokoto Governor listed three major factors 
in his denunciation of Obasanjo: indiscriminate 
dismissal of Northerners from federal jobs, unfair 
distribution of funds for federal projects, and 
unchecked violence against Northerners in Southern 
States. Calling on all Northern Governors to oppose 
Obasanjo's reelection, Bafarawa continued that 
Northerners must band together, notwithstanding party 
affiliation, for the 2003 elections in order to 
restore the region's "lost glory."  Laden with 
regional chauvinism, Bafarawa's peroration, calling 
for a united North, was greeted by loud applause. In 
contrast, Minister of the Federal Capital territory 
addressed the ACF on behalf of Vice President Atiku. 
Atiku's theme was that the North should not blame 
others for its plight; its  problems rest squarely on 
the shoulders of the Northern elite.  He stated that 
Northerners have viewed political power as an end in 
itself and not a means to an end, such as economic 
development. Predictably, Atiku's statement did not 
generate the same reaction as Bafarawa's. 
 
 
 
 
8. (C) COMMENT: The applause elicited by the 
Governor's statement does not mask the fissures in 
Northern Nigeria's political topography. Despite 
Bafarawa and other anti-Obasanjo ACF voices, a handful 
of influential Northerners have recently spoken in 
favor of Obasanjo. Additionally, Father Kukah told the 
ACF gathering that de facto religious discrimination 
impeding not only economic development but also the 
prospects for political unity in North between members 
of the different religions. Privately, Kukah told us 
that the ACF event was controlled by members of the 
opposition APP and other Obasanjo critics to give the 
appearance of Northern unity against the President. 
End Comment. 
 
 
------------------- 
ARM TWISTING AT OTA 
------------------- 
 
 
9.  (C) In an attempt to douse Bafarawa's incendiary 
and short circuit other outbursts against a possible 
Obasanjo reelection bid, Works Minister Tony Anenih, 
the consummate mechanic of political deals, engineered 
a procession of PDP governors, party officials and 
others to visit Obasanjo at his farm in Ota during the 
Easter weekend.  Receiving massive media coverage, the 
event was characterized as a show of support for an 
Obasanjo bid at a second term. Speculation ran rife 
that President Obasanjo would announce his intentions 
regarding the 2003 elections at that time. While the 
President maintained his silence, this event seemed to 
indicate that a reelection bid was more probable than 
not. However, not everyone was happy to be in Ota. We 
have gathered from a few sources that Anenih put the 
squeeze on the PDP governors. Reportedly, he 
threatened that the federal government would be 
miserly toward states whose governors failed to 
appear. Conversely, he promised some private pocket 
money for those state chief executives who were 
present. (Note. All PDP governors, except Abia 
Governor Kalu, who has battled publicly with Obasanjo 
attended. End note) 
 
 
10. (C) Despite Anenih's legerdermain, the Governors 
did not endorse Obasanjo, according to Kaduna State 
Governor Marakfi. Makarfi contends that the Governors 
did not say they would back Obasanjo. Instead, they 
demanded that Obasanjo make up his mind and publicly 
state his electoral intentions. Anenih, abetted by 
Information Minister Jerry Gana, craftily gave a 
positive media spin turning what, in effect, was 
intended to be an ultimatum from the Governor's into a 
"demand" that Obasanjo seek reelection. 
 
 
--------------------------------- 
AFTER THE SAFIYA HUSSEINI VERDICT 
--------------------------------- 
 
 
 
 
11. (C) Emboff met Safiya Hussieni's lead attorney 
April 2 to further discuss the appellate court 
reversal of Husseieni's stoning sentence. The 
attorney, Hauwa Ibrahim, generally commended the 
appellate court decision and the manner in which it 
was rendered. Ibrahim recalled that the gallery was 
full of anticipation as the judge began to read the 
verdict. Once she gathered that the court would 
reverse the sentence, Ibrahim worried that the gallery 
might erupt violently. Fortunately, the judge 
tactfully diffused emotions, by liberally lacing his 
decision with quotes from the Koran and taking over 2 
hours to read the judgment. Still, Ibrahim said, there 
was agitation among the Sharia hard-liners in the 
gallery.  Because of this hard-line element, Ibrahim 
made special arrangements with local police 
authorities to secret Safiya out of the courtroom and 
to a safe house until things quiet. 
 
 
12. (C) While praising the rulings (particularly its 
affirmation of a defendant's right to withdraw a 
confession at any time under Sharia), Ibrahim pointed 
to some lacunae in the court's reasoning. She claimed 
the court cited the Federal Constitution as giving the 
Sokoto State Assembly the authority to enact criminal 
Sharia legislation. However, she criticized the court 
for purposely sidestepping Safiya's contention that, 
if the Constitution is the organic authority for the 
State's criminal Sharia code, then the constitutional 
bar against cruel and unusual punishment should 
likewise apply to the penalties that can be imposed 
under Sharia.  The second important issue the Court 
overlooked was the defense contention that the Koran 
did not mandate a stoning sentence for adultery. 
 
 
13. (C) Ibrahim is also counsel for the three other 
women in Sokoto facing similar stoning sentences.  She 
will likely help in the case in Katsina State as well. 
She hoped that the Husseini decision will set a 
precedent and stated that she has moved quickly to 
provide copies of the decision to the judges in the 
other Sokoto cases.  However, one case appears to be 
very difficult. In this case, the woman not only 
admitted to adultery but she abandoned the child who 
died as a result.  Ibrahim commented there would be 
little local sympathy for this defendant and that 
there will be a clamor for a harsh sentence because of 
the infanticide. 
 
 
-------------------------------- 
SHOW ME WHERE TO PRINT THE MONEY 
-------------------------------- 
 
 
14. (U) In the aftermath of the NITEL privatization 
failure, government's decision to privatize the 
Nigerian Mint has come under increased scrutiny. 
Typical of most parastatals, the Mint is inefficient. 
However, the symbolic importance of government 
ownership resonates with many Nigerians. Obasanjo 
critics, particularly in the House of Representatives, 
have found this too easy an opportunity to pass up. 
PDP rival and former Governor of Kano State Abubakar 
Rimi is Chairman of the Mint, and he has engaged, 
along with many members of the National Assembly, in a 
campaign to prevent the sale. 
 
 
15. (U) So far, the President seems adamant, as is 
Bureau of Public Enterprises Director General Nasir 
el-Rufai, who is more determined than ever after being 
called on the carpet by the National Assembly for the 
failed NITEL sale.  Compared to NITEL and some of the 
other projects, the Mint is fairly small potatoes. 
Nonetheless, it will be interesting to see if el-Rufai 
can overcome doubts (specious ones) about the 
currency's security and refute accusations that he is 
giving away Nigeria's sovereignty.  To date, one of 
his more strident responses to criticism has been to 
say incompetence in the Mint has forced Nigerians to 
depend on "white men in Germany and England" to print 
their money. 
JETER