US embassy cable - 05LAGOS947

C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000947 
 
SIPDIS 
 
E.O. 12958: DECL: 06/20/2007 
TAGS: PGOV, NI, EPET, PREL 
SUBJECT: NIGERIA: SOUTH-SOUTH DEMANDS TO KEEP MORE OF OIL 
REVENUES 
 
 
Classified By: Consul General Brian L. Browne per 1.4 b and d 
 
1.  (C) Summary:  With less than two weeks remaining before 
its scheduled end, Nigeria's National Political Reform 
Conference's (NPRC) delegates remain divided over several 
issues -- chief among them resource control and the rotation 
of power, i.e. the presidency, between geographic zones. 
South-South delegates have made securing a greater percentage 
of the oil revenues for their states their primary goal in 
the conference.  They are prepared to forego claims on the 
2007 presidency and bend on other issues dear to Northern 
delegates to achieve that objective.  Northern delegates thus 
far have indicated willingness to increase the oil derivation 
only marginally, prompting South-South delegates to 
temporarily walk-out of the conference June 14. 
 
2. (C) Summary Cont'd:  The NPRC is replete with the 
political brinkmanship, grandstanding, name-calling and 
alliance-seeking that make Nigerian politics a very spice 
fare.  Meetings are occurring until the wee hours of the 
morning and the politicking is likely to intensify as the 
conference draws to a close.  For now, delegates we have 
talked to remain optimistic that compromises will be reached, 
allowing the NPRC chair to present a final report to 
President Obasanjo.    From a southern perspective, President 
Obasanjo's minions who wanted to use the conference to extend 
the President's term or to exclude his political enemies for 
seeking the highest office, have failed and lost control of 
the conference.  In fact the conference has become an 
unsettled hornet's nest.  The controversy over resource 
allocation is not only a squabble over money, but it has 
further stung already irritated ethnic and regional 
sensitivities.  South-South delegates are not likely to back 
down without a lot of cajolery and a good face-saving 
mechanism that will allow them to return home as "victors." 
End Summary. 
 
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Two Weeks To Go, Delegates Walk Out of ConFab 
--------------------------------------------- - 
 
3.  (SBU) Inaugurated February 21, 2005, the NPRC, was 
mandated to deliberate on needed reforms in six areas - 
constitutional, political parties, electoral, judicial, civil 
society, and social/consensus building.  With only two weeks 
remaining before its scheduled end, delegates remain divided 
on a number of issues, particularly, resource control and the 
rotation of presidential power between geographic zones.  On 
June 14, delegates temporarily walked out of the conference 
when the Chair reported, apparently erroneously, that 
agreement had been reached to increase the oil derivation 
allocation from 13 to 17 percent.  The week prior, South-East 
delegates had to be coaxed back into the conference, when 
they walked out protesting an ethnic slur made by a Northern 
delegate intimating that Igbos were unfit to hold the 
Nigerian presidency. 
 
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Resource Control - Primary South-South Objective 
--------------------------------------------- --- 
 
4.  (C) The maximalist South-South position is for the zone 
nominally to retain 100 percent of the oil and gas revenues 
derived from "its land."  Under this scenario, the federal 
government would levy a heavy, up to 70 percent, tax on said 
revenues in order to finance central government operations 
and to distribute to other geographical zones. Privately, 
South-South delegates admit their calls for 100 percent 
control and threats to "take what is due the zone, if it is 
not given," are public posturing, for the benefit of home 
constituencies.  The far likelier scenario is for the federal 
government to continue collecting and controlling oil 
revenues and allocating a proportion of these resources back 
to oil-producing states.  Most South-South delegates would 
like the derivation increased from the current 13 to 50 
percent.  However, they recognize the improbability of such a 
steep jump to that amount and would be satisfied with a 
series of graduated increases over an extended time period. 
 
5.  (C)  South-South delegate and Bayelsa State Information 
Commissioner Oronto Douglas told us key northern and southern 
delegates have been meeting behind closed doors, trying to 
reach a compromise on how much to increase the oil 
derivation.  Douglas said proposals range of increases from 
the current 13 to 17-25 percent.  He said the arrangement 
being discussed most widely is an immediate increase to 20-25 
percent, with annual increases of 1-5 percent until the 50 
percent goal is achieved.  The negotiations are difficult and 
Douglas was uncertain if they would be succeed.  However, he 
said the South-South found "insulting" the North's general 
position of an increase to 17 percent, without further 
increments. 
6.  (C) Meanwhile, South-South delegates are meeting with 
presidential insiders in a bid to get Obasanjo to endorse 
their position.  On the day of our conversation, June 13, 
Douglas said he would be meeting later in the day with 
Presidential adviser Julius Iyonvbere to script the issue. 
In addition, Douglas said South-South delegates had decided 
to prioritize this issue over the zone's presidential 
aspirations.  He said that public protestations to the 
contrary, were "hot air."  "This is the issue we can win," 
Douglas said. 
 
7.  (C) Feeling the heat increase on this issue and on the 
ethnic and regional sentiments underlying it, President 
Obasanjo met South-South governors over the weekend in an 
attempt to corral this dispute before it becomes too 
unwieldy.  So far, the governors are sticking (at least 
publicly) to their position that the derivation be increased 
to at least 25 percent. 
 
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You Give us Money, We Give You the Presidency... 
OK and Maybe Other Goodies Too 
--------------------------------------------- ---- 
 
8.  (C) In a separate meeting, South-South civil society 
delegate Mike Ozekhome confirmed the read-out proffered by 
Douglas.  Ozekhome said the southern bloc had coalesced 
around resource control and was willing to offer the North 
certain trade-offs in exchange for its support on the issue. 
The most important concessions were the south's willingness 
to drop its clamor for the presidency in 2007, and to kill 
the proposal banning past military rulers from contesting 
future elections, both pet initiatives of Obasanjo's men at 
the conference.  Ozekhome said the south had other, less 
valuable chits it was willing to use in the bargaining 
process.  For example, instead of the proposed electronic 
voting for the 2007 elections, the South could live with the 
some northern delegates' preference for some sort of hybrid 
"A4" voting, where voters line up publicly but still cast 
private ballots.  The ballots would be tallied immediately at 
the polling station as opposed to being sent to central 
centers.  Term limits, on which the South is indifferent, but 
which are anathema to the North now that it is poised to 
regain the presidency, are also a bargaining lever. 
 
9.  (C) Asked about alliances forged at the conference, 
Ozekhome and Douglas insisted the South-South and South-East 
are united.  Ozekhome said the South-West and the Middle Belt 
supported the resource control platform, but neither could 
not be confidently relied upon if the issue were put to a 
vote. Despite some strong initial courting between the 
South-South and the Middle Belt, Ozekhome said the 
South-South decided to treat with a more dependable partner, 
i.e. the North-West.  "Only the big boys are capable of 
striking a deal," he said. 
 
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Comment 
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10.  (C) From a southern perspective, if it is true that the 
convening of the NPRC was an attempt to, at a maximum, extend 
Obasanjo's tenure, and at a minimum, prevent former military 
leaders Babangida and Buhari from running in 2007, the plan 
has gone awry.  South-South delegates have succeeded in 
making resource control a key issue and perhaps the 
conference's most divisive one.  That the South-South has 
been able to manipulate the conference to this degree 
reflects a growing political awakening and finesse in that 
geo-political zone.  In the end, however, this is not a fight 
to improve democracy.  This is a battle over which group of 
elite gets their hands on more of the nation's bounty. 
BROWNE