US embassy cable - 03ABUJA367

UNCLAS SECTION 01 OF 02 ABUJA 000367 
 
SIPDIS 
 
 
STATE FOR AF/W 
STATE PASS OPIC, TDA, AND EX-IM 
STATE PASS USTR AND DOT 
COMMERCE FOR ITA/MAC 
STATE PASS USTR 
 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, EAGR, ELTN, EPET, EIND, EINV, NI 
SUBJECT: NIGERIA: ECONOMIC ROUNDUP FEBRUARY 20 
 
1. This periodic economic report from Abuja and Lagos 
includes: 
--Canned Beer and Soda Coming Soon to Nigeria 
--Nigeria's Juice Ban Squeezes Out U.S. Exports 
--Trucks Roll Only at Night in Port Harcourt 
 
 
Canned Beer and Soda Coming Soon to Nigeria 
------------------------------------------- 
2. The U.S. Trade and Development Agency (USTDA) and Brewtech 
Nigeria signed a $251,000 grant agreement January 23 in Abuja 
to fund a feasibility study on the construction of an 
aluminum can manufacturing facility in Lagos State. Roeslein 
and Associates, in conjunction with Ball Packaging, will 
conduct the study. The USTDA grant will partially fund the 
cost of the study, with Roeslein and Associates providing an 
additional $166,320 to complete the total project. This early 
planning assistance will provide a full assessment of the 
current economic, financial, and environmental conditions for 
the construction of a can production line in Nigeria. 
 
 
3. Currently, Nigeria imports cans from South Africa. 
However, South Africa is reaching its capacity and has been 
unable to supply a sufficient amount of cans to the Nigerian 
fillers, including Coca-Cola, Vita-Malt and Nigerian 
Breweries. When fully implemented, the project could lead to 
hundreds of new jobs in can manufacturing, filling processes, 
and logistics management. In addition, it could stimulate 
exports of $32 million in U.S. goods and services. 
 
 
Nigeria's Juice Ban Squeezes Out U.S. Exports 
--------------------------------------------- 
4. Information Minister Jerry Gana announced on January 29 
that Nigeria's Federal Cabinet had banned the import of fruit 
juices in retail packs effective immediately. Gana continued, 
"Juices to be imported into the country must be in drums and 
must be processed in the country to generate income and 
employment. Packaged fruit juices imported into the country 
will be destroyed at the point of entry unless the 
consignment is in drums." Industry sources indicate that the 
ban is to protect local production and a few importers of 
juice concentrates. 
 
 
5. Nigeria's overall import figures are not readily 
available; however, import demand increased markedly over the 
past four years. The ban has cut off growing U.S. exports of 
fruit juices to Nigeria which reached a record level of 
$304,000 (U.S. trade data) last fiscal year. 
 
 
Trucks Roll Only at Night in Port Harcourt 
------------------------------------------ 
6. A new Rivers State law restricts the movement of trucks to 
night hours. Effective February 1, 2003, Heavy Goods Vehicles 
(HGV), including all trucks and trucks with trailers, are 
allowed on the state's roadways only between 2100 and 0600. 
The measure is aimed at easing congestion, reducing accidents 
and, according to the government circular, to "bring back 
sanity to our roads and streets." One major shipping company 
reports that police are stopping and arresting drivers of 
trucks traveling in daylight hours. 
 
 
7. This concept is not new to Nigeria; under the Buhari 
regime, truck traffic in and around Lagos was restricted to 
the hours of midnight to 0600 with some success, but the 
policy was abandoned when Ibrahim Babangida came to power in 
1985. A source in the shipping industry believes the 
restriction will be loosened and companies will be able to 
obtain decals allowing them to drive trucks during daylight 
hours upon the payment of special fees. 
 
 
8. Comment: The Port Harcourt area of Rivers State has long 
suffered acute road congestion, particularly at Eleme or 
"Refinery" Junction. Many of Nigeria's interstate roads, 
particularly in the south, have become dilapidated and in 
some areas nearly impassable, leading to ever-increasing 
traffic congestion and vehicular accidents. Large trucks ply 
the roads of Rivers State with loads picked up from the docks 
of Port Harcourt as well as petroleum products. On the 
highway leading out of Port Harcourt northeastward, tanker 
trucks park along both sides of the road for miles near the 
entrance to the government-run oil refinery, while others 
move in and out of traffic slowly and erratically. In many 
places roadways are reduced to rutted, water-filled single 
lanes, sometimes haphazardly repaired by local boys with 
shovels who ask passing motorists for money. It is common to 
see large trucks tipped over, their cargo strewn along the 
roadways. 
 
 
9. Comment Continued: Forcing trucks to travel only at night 
may help ease congestion in Rivers State, but it also forces 
shippers, transport firms and other companies to adjust their 
business practices. For example, Panalpina World Transport 
now makes deliveries in Rivers State only at night. Further, 
given the state of the roadways in the south, truck passage 
may become more hazardous with less visibility and the 
increased risk of highway robbery at night. 
 
 
10. Comment Continued: It is unclear what effect forcing 
trucks to travel at night will have on economic conditions 
overall in Rivers State or to what extent the policy will 
affect commerce between Port Harcourt and the rest of 
Nigeria. We expect exemptions or daylight permits to be 
offered for special fees. But if successful, we may see calls 
for similar measures in traffic-choked cities such as Lagos 
and Ibadan. End Comment. 
JETER