US embassy cable - 03LAGOS685

UNCLAS SECTION 01 OF 02 LAGOS 000685 
 
SIPDIS 
 
 
DEPARTMENT OF TRANSPORTATION FOR SZABAT AND SAMPLE 
EXPORT-IMPORT BANK FOR GRANDMAISON AND SCURRY 
 
 
E.O. 12958: N/A 
TAGS: PREL, EAIR, NI, EINV, ELNT 
SUBJECT: PLANES, TRAINS, AND AUTOMOBILES: AFRICAN MINISTERS 
DISCUSS INTEGRATED TRANSPORTATION SYSTEMS 
 
1.  Summary: The first annual African Ministerial Forum on 
Integrated Transportation (AMFIT) met in Abuja March 9 - 13. 
Ministers called for better policy coordination and private 
sector participation to help integrate African countries with 
the rest of the world.  Ambassador Jeter, Deputy Assistant 
Secretary of Transportation Joel Szabat, and EXIM Bank 
 
SIPDIS 
Director Joseph Grandmaison highlighted the ways USG 
assistance is helping develop safe, secure, and efficient 
transport links in Africa.  Among other things, the ministers 
expressed support for a U.S. Aviation and Maritime Security 
Initiative to reduce the susceptibility of transport systems 
to terrorist attacks.  End Summary. 
 
 
2.  Presidents Olusegun Obasanjo of Nigeria and Abdoulaye 
Wade of Senegal 
(whom Senegal's NEPAD Coordinator represented) hosted AMFIT 
2003 as an African follow-up to the International Symposium 
on Transport that USDOT had organized in October 2000. 
About twenty African ministers and hundreds of other 
representatives from Africa participated in AMFIT 2003 in 
Abuja on March 9 - 13.  Since its theme revolved around the 
impediments to the development of a continent-wide transport 
infrastructure, AMFIT's communique reflects a blueprint, 
however inadequate it may be, of what an integrated Africa 
transportation system might resemble. 
 
 
3. Opening the conference, Obasanjo called on the delegates 
to create an integrated Africa-wide transportation plan to 
strengthen regional and international trade ties within the 
NEPAD framework.  Ambassador Jeter, in a welcome address at 
the opening plenary session, echoed that the development of 
safe, reliable, and efficient transport links can be a means 
to foster economic development.  He said the USG donation of 
multi-million dollar state-of-the-art aviation security 
screening equipment and EXIM financing of transportation 
projects is supporting these objectives. 
 
 
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DOT Helping Develop Safe, Secure, and Efficient Transportation 
--------------------------------------------- ----------------- 
 
 
4.  Joel Szabat, Deputy Assistance Secretary for 
Transportation also expressed support for AMFIT's goals and 
gave examples of DOT's efforts to help governments develop 
safe, secure, and efficient transport systems.  Szabat said 
the Open Skies program has improved aviation safety and 
strengthened US-Africa air links. The USG's approval of World 
Airways' beginning charter service between the United States 
and Nigeria, once authorized by the GON, will be a positive 
outcome of such cooperation, he said.  He went on that USDOT 
has helped to strengthen the Aviation and Transportation 
Ministries' institutional oversight and security training for 
personnel in the last year. 
 
 
5.  During the conference, Szabat met separately with 
Nigerian Minister of Transport Ojo Maduekwe to discuss ongoing 
cooperation.  Szabat gave Maduekwe a copy of an environmental 
assessment of the Lagos Port Complex and said the USG hopes to help 
implement some of the report's recommendations.  Maduekwe 
expressed appreciation for USDOT's support and said he looks 
forward to cooperation. The biggest challenge facing the 
Ministry, he said, is its weak institutional capacity to 
regulate the operators and its weak grasp of the technical 
aspects of policy formulation. Szabat responded that USDOT 
can put together a program in Washington to help the Ministry 
develop an effective and independent regulatory body to 
address urban congestion. 
 
 
6.  In various workshops, USDOT aviation and ground 
transportation experts engaged African delegates on the 
importance of developing sound transportation policy.  The 
discussions focused on the need for better planning and a 
regulatory framework in which private operators might provide 
safe and efficient service to end-users.   Delegates also 
stressed the need for better coordination between countries. 
 
 
7.  USDOT succeeded in its attempt to encourage inclusion of 
an African Aviation and Maritime Security Initiative 
statement in the final communique.  Transportation ministers 
agreed to adopt and implement new International Civil 
Aviation Organization and International Maritime Association 
standards strengthening security at airports and seaports. 
The ministers said the African Union supports G-8 and APEC 
measures to tighten aviation and cargo handling procedures to 
guard against terrorism. 
 
 
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ExIm Finance for Infrastructure Improvements 
-------------------------------------------- 
 
 
8. EXIM Bank Director Grandmaison described the Bank's 
efforts to provide financing for infrastructure projects 
including US-Africa air cargo links.  Grandmaison announced 
the Bank's approval of a $5 million loan to Overland Airways 
for the purchase of two Beech aircraft, and added he hopes 
AMFIT will generate more opportunities for the Bank in the 
multi-modal transport sector.   He challenged ministers to 
think of transportation as a concept that represents more 
than mere physical movement, adding that the concept can 
embrace sound regulatory and customs policies that encourage 
the exchange of goods.  (An example of gross inefficiency is 
the practice by Nigeria's Customs Service to inspect all 
imported goods.  Clearing goods through customs consequently 
takes 25 days on average.)   Grandmaison added that Nigerians 
should use the Africa Growth and Opportunity Act (AGOA) as a 
catalyst to develop the country's infrastructure.  Better air 
cargo links between Nigeria and the United States might 
enhance the competitiveness of some Nigerian goods that could 
qualify for export under AGOA. 
 
 
9.  AMFIT participants identified barriers to financing and 
possible solutions.  Many government delegates complained 
about the difficulty of accessing funds for infrastructure 
projects as a result of political instability that makes many 
countries unattractive to foreign investors.  Private sector 
representatives promoted the use of build, operate and 
transfer agreements by countries that lack the capacity and 
capital for large projects.  (Comment. Since the public 
sector dominates Nigeria's economy, public-private sector 
partnerships have yet to become popular.  The government 
finds relinquishing control over public enterprises 
difficult, even though it lacks the institutional or 
financial ability to implement projects.  Control over public 
enterprises often translates into easy access to resources 
for personal gain.  End comment.) 
 
 
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Lessons and Next Steps 
---------------------- 
 
 
10. Africa's transportation systems obviously need drastic 
upgrade. Nigeria's Transport Minister Maduekwe described the 
crrent state of Africa's infrastructure as a 
"study in chaos" characterized by the poor quality of its 
aviation, road, rail, and maritime links.  Dr. Lisa Fox of 
Harvard University tried putting a price tag on the 
consequences of such poor transport links.  She said the cost 
of transporting goods in Africa accounts for 40 percent of 
the retail value of such goods, twice the international 
average. In the absence of an upgrade, African countries may 
still find it difficult to compete internationally, even 
under preferential trade schemes like AGOA. 
 
 
11. AMFIT's final communique stressed the importance of 
involving the private sector in infrastructure development if 
desperately needed capital and knowledge are to be mobilized. 
 The ministers called for the institutionalization of AMFIT 
within the NEPAD structure in order to follow through on 
AMFIT's recommendations. 
 
 
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Comment 
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12.  While the participants succeeded in identifying possible 
solutions to Africa's transport woes, how their governments 
will implement the recommendations, if all, will constitute 
the true test of their success.  The government delegates 
voiced support for all the right measures: better policy, 
regional cooperation, and private sector involvement.  The 
question remains whether NEPAD will ever become something 
more than just a vision on paper. Regardless of its long-term 
effect, AMFIT provided USG officials an excellent opportunity 
to showcase U.S. support for Africa's multi-modal transport 
infrastructure. 
 
 
HINSON-JONES