US embassy cable - 03ABUJA910

UNCLAS SECTION 01 OF 02 ABUJA 000910 
 
SIPDIS 
 
 
STATE FOR AF/W 
STATE PASS OPIC, TDA, AND EXIM 
STATE PASS USTR AND DOT 
COMMERCE FOR ITA/MAC 
 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, EINV, EAIR, NI 
SUBJECT: NIGERIA: ECONOMIC ROUNDUP MAY 16 
 
REF: A. ABUJA 576 
     B. ABUJA 440 
 
 
1. This periodic economic report from Abuja and Lagos 
includes: 
--GON Approves World Airways 
--Ministry of Aviation Launches Nigerianglobal 
--Nigeria Bans Ice Cream Imports 
 
 
GON Approves World Airways 
-------------------------- 
2. Minister of Aviation Kema Chikwe announced at an April 10 
press conference that U.S. carrier World Airways had been 
approved to begin charter service between Lagos and New York, 
Atlanta, and Houston. World Airlines had hoped to begin 
flying in March but experienced difficulty securing landing 
rights (Ref A). Minister Chikwe attributed the delay in 
approval to the Ministry's desire to perform "due diligence" 
on the airline. World Airways would be the first American 
carrier to establish direct service under the 1999 Open Skies 
Agreement. With Nigeria Airways not now flying, the new 
service would be the only direct passenger and air cargo link 
between the United States and Nigeria. 
 
 
3. Chikwe had written the Ambassador April 16 stating that 
Nigeria had approved World Airways to operate flights in and 
out of Nigeria. However, the letter also said "a technical 
and economic assessment of the airline and its Nigerian agent 
would be undertaken by the Nigerian Civil Aviation Authority 
(NCAA) to facilitate the commencement of operations." A 
diplomatic note dated April 28 conveyed the same information. 
 
 
4. We replied to clarify that the terms of the Open Skies 
Agreement give the sending country the authority to designate 
an airline; the role of the receiving country is to grant 
operating authority with minimum procedural delay. 
 
 
5. On May 15, Minister Chikwe told the Ambassador and then 
announced to the media at an event to mark a U.S. donation of 
security equipment to Nigeria that World Airways had been 
approved and there were no further requirements for World 
Airways to begin service. She said the letter informing us of 
additional requirements was sent in error. World Airways is 
set to make its inaugural flight to Lagos on May 29, 
inauguration day in Nigeria. 
 
 
Ministry of Aviation Launches Nigerianglobal 
-------------------------------------------- 
6. The Ministry of Aviation signed an agreement with Swiss 
firm Triaton AG to operate a new airline called 
Nigerianglobal. The airline, slated to begin operations late 
this month, would assume the international routes of Nigeria 
Airways. We have not received formal word whether 
Nigerianglobal intends to serve the United States. However, 
Triaton's business proposal indicates the company plans to 
fly all Nigeria Airways routes, including flights to the 
United States. 
 
 
7. Comment: This is the second time in less than a year that 
Minister Chikwe has tried to create a new national carrier. 
In 2002, a controversial deal with a U.K.-based firm to form 
a new airline from Nigeria Airways' liquidated assets failed 
after the National Assembly and the Bureau of Public 
Enterprises, alleging a lack of transparency and that the 
Minister had outstripped her authority by unilaterally 
approving the deal (Ref B). The Nigerianglobal deal may face 
the same stiff opposition, including from labor unions 
seeking compensation for Nigeria Airways employees. However, 
President Obasanjo reportedly favors Nigeria having a 
state-owned "national carrier," so some carrier is likely to 
be established. End Comment. 
 
 
Nigeria Bans Ice Cream Imports 
------------------------------ 
8. Director General of the National Agency for Food and Drug 
Administration and Control wrote FAS in Lagos on May 2 that 
ice cream imports would be banned. The letter said that 
"edible ices are delicate products requiring special 
handling" and that "international standards on edible ices 
have been abolished." Therefore, the agency "has discontinued 
the registration of edible ices." The letter concludes: 
"Interested companies have been advised to set up local 
factories for the production of edible ices for the ease of 
monitoring and compliance with national standards." (Note: In 
2002, the United States exported $144,000 in ice cream to 
Nigeria. The makers of "Blue Bunny" ice cream, a brand 
popular in the midwest United States and in Nigeria as well, 
have plans to operate a factory in Nigeria. No timetable for 
the proposed investment is available. End Note.) 
JETER