[Senate Hearing 112-651]
[From the U.S. Government Printing Office]
S. Hrg. 112-651
A CLOSER LOOK AT NIGERIA: SECURITY, GOVERNANCE, AND TRADE
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HEARING
BEFORE THE
SUBCOMMITTEE ON AFRICAN AFFAIRS
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
MARCH 29, 2012
__________
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COMMITTEE ON FOREIGN RELATIONS
JOHN F. KERRY, Massachusetts, Chairman
BARBARA BOXER, California RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania MARCO RUBIO, Florida
JIM WEBB, Virginia JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico MIKE LEE, Utah
William C. Danvers, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
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SUBCOMMITTEE ON AFRICAN AFFAIRS
CHRISTOPHER A. COONS, Delaware, Chairman
BENJAMIN L. CARDIN, Maryland JOHNNY ISAKSON, Georgia
JIM WEBB, Virginia JAMES M. INHOFE, Oklahoma
RICHARD J. DURBIN, Illinois MIKE LEE, Utah
TOM UDALL, New Mexico BOB CORKER, Tennessee
(ii)
?
C O N T E N T S
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Page
Carson, Johnnie, Assistant Secretary of State for African
Affairs, U.S. Department of State, Washington, DC.............. 4
Prepared statement........................................... 7
Coons, Hon. Christopher A., U.S. Senator from Delaware, opening
statement...................................................... 1
Cromer, Sharon, Senior Deputy Administrator for Africa, U.S.
Agency for International Development, Washington, DC........... 9
Prepared statement........................................... 11
Isakson, Hon. Johnny, U.S. Senator from Georgia, opening
statement...................................................... 3
Marin, Paul, Regional Director for Sub-Saharan Africa, U.S. Trade
and Development Agency, Arlington, VA.......................... 15
Prepared statement........................................... 16
(iii)
A CLOSER LOOK AT NIGERIA: SECURITY, GOVERNANCE, AND TRADE
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THURSDAY, MARCH 29, 2012
U.S. Senate,
Subcommittee on African Affairs,
Committee on Foreign Relations,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:20 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. Christopher
A. Coons (chairman of the subcommittee) presiding.
Present: Senators Coons and Isakson.
OPENING STATEMENT OF HON. CHRISTOPHER A. COONS,
U.S. SENATOR FROM DELAWARE
Senator Coons. I am pleased to chair this hearing of the
African Affairs Subcommittee, which will focus on Nigeria and
pressing issues of security, governance, and trade.
I would like to welcome our three distinguished witnesses
today--Ambassador Johnnie Carson, Assistant Secretary of State
for African Affairs; Sharon Cromer, Senior Deputy Assistant
Administrator for Africa at USAID; and Paul Marin, Regional
Director for sub-Saharan Africa at the U.S. Trade and
Development Agency--and thank all three of you for joining us
here today.
Our witnesses have extensive experience and expertise in a
range of issues that are relevant to Nigeria, and I look
forward to your testimony.
I am also especially pleased to be joined by my good friend
and ranking member, Senator Isakson, with whom I traveled to
Nigeria last June. Our trip then came on the heels of last
year's elections and President Goodluck Jonathan's
inauguration. It was a time defined by uncertainty surrounding
Nigeria's future, mixed with cautious optimism, given President
Jonathan's leadership.
The elections, while far from perfect, marked a dramatic
improvement from the violence and lack of transparency that had
marred previous Nigerian elections. At the same time, there was
post-election violence that killed hundreds and demonstrated
lingering tensions that continue to this day and will be
discussed in the context of this hearing.
During our visit, we were both particularly impressed with
the commissioner of the National Electoral Commission,
Professor Jega, for his leadership and his commitment to
electoral reform, which allowed Nigeria to hold the most
transparent elections in its history.
One year later, Nigeria today faces significant
challenges--an increasingly sophisticated and deadly wave of
extremism, pervasive corruption, and growing levels of income
inequality and poverty. With more than 155 million people,
Nigeria is Africa's most populous nation and its second-largest
economy after South Africa.
As Africa's largest producer of oil and one of the top five
suppliers of oil to the United States, Nigeria plays an
important role in the global economy and in our own. The maps
that I am about to refer to illustrate the underdevelopment of
the north and the growing need for President Jonathan to do
more to bridge persistent geographic, sectarian, and economic
divides between north and south.
The wealth in Nigeria is largely concentrated in the south,
as demonstrated by the first map, which indicates the southern
concentration not just of wealth, but also of oil resources.
Nigeria's economy relies disproportionately on oil, which
accounts for 80 percent of government revenues and 95 percent
of export earnings.
Poverty levels are rising, with more than 60 percent of the
population living on less than a dollar a day, and indicators
such as income distribution, health, and literacy indicate a
sharp north-south divide.
The second map here on my left demonstrates the clear
distinction between northern states, where less than 10 percent
of children are typically vaccinated and southern states, where
that percentage is significantly higher, often 30, 40 percent,
or more.
And this final map demonstrates another clear distinction
between north and south on female literacy rates, less than 20
percent in a majority of northern states and more than 50
percent in a majority of southern states. So Nigeria faces
these significant regional distinctions, which in part are
driving some of the ongoing tensions and sectarian division
within the country.
Nigeria also faces problems including corruption,
instability, and economic mismanagement, which have hampered
growth and economic opportunity. With its growing population
and significant resources, Nigeria holds enormous economic
potential, and I believe the United States can play a critical
role in helping diversify
the Nigerian economy beyond oil and gas, expand its power
system infrastructure, address widespread transparency
problems, strengthen the rule of law, and address weak
environmental regulations.
In this regard, I was pleased the State Department recently
led a trade mission to Abuja and Lagos focused on expanding
United States investment in Nigeria's energy sector. I look
forward to hearing from our witnesses about prospects for
deepening United States economic engagement in Nigeria and
partnering with public and private sectors.
Nigeria's growing population represents an important market
for United States goods, but they are counterbalanced by rising
security concerns, which have hampered United States enthusiasm
for investment.
In the past 2 years, Boko Haram, a violent northern-based
Islamic extremist group, has launched increasingly
sophisticated attacks on civilians, government and police
installations, and the United Nations headquarters building in
Abuja itself. In fact, only 6 months after Senator Isakson and
I met with the Archbishop and the imam of Abuja in a memorable
breakfast conversation, Boko Haram launched attacks on Catholic
churches in and around Abuja, killing dozens of people after
the celebration of Christmas Mass.
Now this last graph for today's hearing demonstrates
visually the very sharp rise in the number of attacks
perpetrated by Boko Haram in the past year. As you can see,
from 2003 to 2009, the number of attacks was minimal, one or
two annually on average. In 2010, however, the number of
attacks rose to 30.
And alarmingly, that number increased fivefold in the past
year, with more than 150 attacks in 2011 alone, and this
doesn't include the coordinated multiple bombings that led to
hundreds of deaths just in January of this year.
The Nigerian security services and police have faced
significant challenges addressing the threat posed by Boko
Haram, elements of which may be affiliated with al-Qaeda in the
Islamic Maghreb, or AQIM, and other transnational terrorist
organizations. The bulk of its followers, though, from
information we have, appear to be focused on domestic issues,
primarily the lack of jobs and economic inequities that have
disproportionately impacted northern states.
The essential component to addressing economic and security
challenges is governance. We have seen clear examples of the
importance of democracy and good governance in West Africa just
in the past week with developments in both Mali and Senegal.
It is clear, in my view, that Nigeria plays a critical
role, and there is more that could be done by President
Jonathan to encourage meaningful reform to root out endemic
corruption and encourage transparency.
We are pleased to have before us three strong witnesses
from the administration who will consider these issues and
assess the difficult questions surrounding governance,
economics, and security in Nigeria and how they all
interrelate.
I look forward to hearing from each of you, but let me
first turn to Senator Isakson for his opening remarks.
OPENING STATEMENT OF HON. JOHNNY ISAKSON,
U.S. SENATOR FROM GEORGIA
Senator Isakson. Well, thank you, Mr. Chairman. And I would
associate myself with all of your remarks, which will make mine
a lot briefer, because I agree with everything that you said.
I would like to welcome Mr. Marin, Ms. Cromer, and in
particular, my good friend, Johnnie Carson. We remain the only
two guys in Washington over 60 with the name Johnny. So I am
glad to be with you again today and was glad to be with you
yesterday as well.
I share the concerns outlined by the chairman in his
remarks, particularly with regard to our visit. We were there 1
week after Goodluck Jonathan was inaugurated into office. There
was great hope at that period of time, and that was the first
relatively peaceful, democratic election in the history of
Nigeria, and there was a lot of hope.
We did not meet with Goodluck Jonathan, but we met with
Vice President Sambo and others there, who were looking forward
to the future with great anticipation. And I am deeply
concerned about Boko Haram and the terrorist-like activities
that are taking place that are so disruptive in the country and
equally care about what was referred to by the chairman in
terms of infections in the north.
We met with the lead imam and expressed our concern about
some of the imams and some of the churches actually telling
people not to take vaccinations from the United States foreign
assistance folks. And I know Ms. Cromer from USAID will
probably address it. But Nigeria is the last stand of polio. It
has a huge measles infestation and infection, and tetanus is
still a major problem.
All of those are substantially or actually are completely
eradicable with the right vaccination and the right education.
So I look forward to hearing comments particularly on that.
Last, my great passion for Africa, after going on this
subcommittee a number of years ago, is the great potential
friendship and economic development opportunities that the
United States and Africa share together, some of which examples
already have taken place, particularly around petroleum and
oil.
When we flew to Nigeria on the plane, if you remember, we
were the only people that didn't work for Chevron in the
section we were in because they were all going back on their
rotation in terms of exploration. And the partnerships like
Marathon's partnership in Equatorial Guinea for natural gas
have been great, great opportunities for the United States and
great opportunities for African countries as well.
So I am glad we have an economic trade person here today to
talk about those opportunities but also talk about what is
absolutely essential, and that is the reduction of corruption
and more open policies in terms of doing business with American
companies and vice versa with African countries.
So, Mr. Chairman, I commend you on calling the hearing.
I welcome our testifying guests today, and I look forward
to your testimony.
Senator Coons. Thank you, Senator Isakson.
Ambassador Carson.
STATEMENT OF HON. JOHNNIE CARSON, ASSISTANT SECRETARY OF STATE
FOR AFRICAN AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC
Ambassador Carson. Thank you very much, Senator Coons.
And thank you very much, Ranking Member, Senator Johnny
Isakson.
I have a longer piece of testimony that I have submitted,
but I will read a shorter prepared statement.
Thank you and your committee members for welcoming us here
today. Nigeria is one of the two most important countries in
sub-Saharan Africa and a county of significant strategic
importance to the United States.
It plays a central role in West Africa because of its
dominant political, economic, and military influence. A stable,
prosperous Nigeria can be a powerful force to promote stability
and prosperity all over Africa.
Nigeria faces a number of challenges, and we maintain a
regular dialogue with the Nigerian Government on ways to
address those concerns through the U.S.-Nigerian Binational
Commission. This framework has allowed us to sustain high-level
engagement with Nigerian officials on the most critical issues
of mutual importance to our countries.
Those issues are good governance, energy, and investment,
the Niger Delta, agriculture and food security, and regional
security cooperation. Let me say a little bit about elections
and governance.
The April 2011 general elections in Nigeria were the most
successful since its return to multiparty democracy in 1999.
Despite some imperfections, they represented a substantial
improvement over the deeply flawed 2007 electoral process,
reversing a downward trajectory for democracy and governance in
that country and providing the country of Nigeria a solid
foundation for strengthening its elections procedures and
democratic institutions in the years to come.
We continue to engage with the National Election Commission
and with its chairman, Professor Jega, to further strengthen
Nigeria's electoral institutions, and we are pleased to see
peaceful by-elections with strong civil society participation
were held just last month in several states in Nigeria.
The Nigerian Government is now faced with the challenge of
using this electoral mandate to provide the good governance and
the reliable service delivery that Nigeria's population so
desperately needs and wants.
Progress on good governance and the steady elimination of
corruption is absolutely essential to Nigeria's continued
economic development. Nigeria is our largest trading partner in
sub-Saharan Africa and a crucial global supplier of oil,
playing an important role in helping to keep the global oil
market stable. However, a lack of accountability and
transparency has prevented the oil revenues from being
translated into economic growth.
President Jonathan's ambitious economic agenda includes a
commitment to power sector reform, significant investment in
public resources, and improved regulatory frameworks to attract
greater foreign investment. The Nigerian Government has
undertaken important reforms in the banking and power sectors
that have improved the prospects for greater economic growth.
We support the reformers in the Nigerian Government whose
initiatives are attempting to overcome entrenched interests,
interests that block Nigeria from achieving its potential as a
top emerging market economy. We are committed to helping
Nigeria strengthen its regulatory environment, and we continue
to press the Nigerian Government to pass a petroleum industry
bill that would modernize the rules for oil and gas extraction.
We are also committed to helping Nigeria promote nonoil
economic growth, particularly in its agricultural sector.
Agriculture comprises 40 percent of the Nigerian economy and
employs about 70 percent of the Nigerian population.
Our Binational Commission Working Group on Agriculture and
Food Security brings together various public and private
interests pursuing stronger implementation of Nigeria's
Comprehensive Africa Agricultural Development Program and
facilitating private sector investment in Nigeria's
agricultural sector. Nigeria was once a net exporter of food,
and there is no reason why it cannot be so again.
The introduction of modern agriculture as well as greater
investment would help to revitalize and strengthen Nigeria's
agricultural sector.
The socioeconomic and environment issues continue to plague
the Niger Delta region. The 2009 amnesty program was successful
at stemming the violence by militants, but oil theft,
kidnapping, and other crimes remain a problem.
The Binational Commission Working Group on the Niger Delta
helps to highlight these issues and encourages stronger
governmental accountability in the Niger Delta region.
Security issues remain a central concern in northern
Nigeria. A loosely organized group known as Boko Haram has
carried out attacks on Nigerian and international interests and
attempts to
exploit the legitimate grievances of the northern populations
to garner recruits and public sympathy.
Boko Haram is not a monolithic or homogenous organization
and is composed of several groups that remain primarily focused
on discrediting the Nigerian Government and attacking Nigerian
Government institutions. Attacks ascribed to members of this
group have improved in sophistication and lethality and have
increased in number over the last few years, and we take the
potential threat to American lives and interests by Boko Haram
very seriously.
There are reports of episodic contact between elements of
Boko Haram and other extremists in Africa, including al-Qaeda
in the Islamic Maghreb. The Nigerian Government must address
the underlying political and socioeconomic problems in the
north in order to effectively deal with the Boko Haram security
issues.
The government must also promote greater respect by its
security forces of the local populations. Heavy-handed tactics
and extrajudicial killings reinforce the belief that Abuja is
insensitive to the concerns of the northern population.
When looking at the problems in Nigeria, and those
particularly of Boko Haram and northern Nigeria, it is
important to note that religion is not driving extremist
violence in Nigeria. While some seek to inflame Muslim-
Christian tensions, Nigeria's religious and ethnic diversity is
a source of strength, not weakness, and there are many examples
of communities working together across religious lines to
protect one another.
The challenges facing Nigeria are enormous, but Nigeria is
up to the task. It has a large and very talented professional
class, an abundance of natural resources, and a strategic
location along the West African coast.
We stand ready to partner with those Nigerian leaders
committed to tackling the country's multiple challenges.
Building on its strong partnership with the United States and
the international community and drawing on its other strengths,
Nigeria can build on the momentum of last year's Presidential
elections and begin to develop the structures for better
governance and service delivery to its people.
Thank you again, Mr. Chairman and Ranking Member Isakson,
for allowing me to be here with you this afternoon. I look
forward to your questions.
Thank you.
[The prepared statement of Ambassador Carson follows:]
Prepared Statement of Assistant Secretary Johnnie Carson
Thank you for having me here today. Nigeria is one of the two most
important countries in sub-Saharan Africa, and a county of significant
strategic importance to the United States. It plays a central role in
West Africa, because of its dominant political, economic, and military
influence. A stable, prosperous Nigeria can be a powerful force for
promoting stability and prosperity all over Africa.
Nigeria faces a number of challenges, and we maintain a regular
dialogue with the Nigerian Government on ways to address those concerns
through the U.S.-Nigeria Binational Commission. This framework has
allowed us to sustain high-level engagement with Nigerian officials on
the most critical issues of mutual importance to our countries. Those
issues are good governance; energy and investment; the Niger Delta;
agriculture and food security; and regional security cooperation.
ELECTIONS AND GOVERNANCE
The April 2011 general elections in Nigeria were the most
successful since its return to multiparty democracy in 1999. Despite
imperfections, they represented a substantial improvement over the
deeply flawed 2007 process, reversing a downward trajectory for
democratic governance and providing the country a solid foundation for
strengthening its elections procedures and democratic institutions in
the years to come. The Independent National Electoral Commission, under
the leadership of Professor Attahiru Jega, set a new standard for
cooperation with civil society and inspired many Nigerians to become
more actively involved in the electoral process. But, the elections
were not perfect--post-election riots in several northern cities left
hundreds dead, and work remains to be done to ensure more peaceful and
improved votes in the future. We continue to engage with Dr. Jega to
further strengthen Nigeria's electoral institutions, and we were
pleased to see peaceful by-elections, with strong civil society
participation, in several states last month.
The Nigerian Government is now faced with the challenge of using
this electoral mandate to provide the good governance that the Nigerian
people deserve. Voters need to see credible elections translate into
tangible gains, and all levels of government must prioritize
transparency and accountability to ensure that government services and
economic development are available to every Nigerian. The recent
appointment of Ibrahim Lamorde to lead Nigeria's Economic and Financial
Crimes Commission (EFCC) was an important step in this direction. We
are currently developing programs to strengthen the EFCC's capacity to
target corrupt officials and to improve the professional quality of
Nigeria's justice sector. We also continue to press for strong
leadership in Nigeria's other anticorruption institutions.
Progress on good governance and the steady elimination of
corruption is essential to Nigeria's continued economic development.
Nigeria is our largest trading partner in sub-Saharan Africa and a
crucial global supplier of oil, playing an important role in helping
keep the global oil market stable. However, a lack of accountability
and transparency has prevented the oil revenues from being translated
into economic growth.
ECONOMIC REFORM
President Jonathan's ambitious economic agenda includes a
commitment to power sector reform, significant investment in public
resources, and improved regulatory frameworks to attract greater
investment. The Nigerian Government has undertaken important reforms in
the banking and power sectors that have improved the prospects for
inclusive economic growth. We support the reformers in the Nigerian
Government whose initiatives are overcoming entrenched interests,
interests that block Nigeria from achieving its potential as a top
world economy.
In February, the Africa Bureau organized a successful 10-company
energy trade delegation that visited Nigeria and Ghana to discuss
opportunities for U.S. investment in the power sector. Their meetings
with key decisionmakers in the energy sector advanced our economic and
energy agenda for Nigeria, and the visit yielded potential partnerships
between U.S. and Nigerian firms. We are committed to helping Nigeria
strengthen its regulatory environment. For example, we continue to
press the Nigerian Government to pass a Petroleum Industry Bill that
would modernize the rules for oil and gas extraction, and address
lingering uncertainty in Nigeria's energy sector. Increasing trade
would benefit both our countries, and we plan to hold formal
discussions soon on a Trade and Investment Framework Agreement to
further that goal.
AGRICULTURAL REFORM
We are also committed to helping Nigeria promote nonoil economic
growth, particularly in its agricultural sector. Agriculture comprises
40 percent of the Nigerian economy and employs about 70 percent of the
population. Our working group on agriculture and food security brings
together various public and private interests pursuing stronger
implementation of Nigeria's Comprehensive Africa Agricultural
Development Program and facilitating private sector investment in
Nigeria's agriculture sector. In addition to addressing food security
within its borders, Nigeria can play an important role in regional food
security, and we support their efforts to reform agricultural and trade
policies to promote that growth. Nigeria was once a net exporter of
food, and there is no reason why it cannot be one again. We have
encouraged greater investment in the agricultural sector and for
additional policy reforms to promote regional trade to revitalize and
strengthen Nigeria's farming and agroprocessing industry.
THE NIGER DELTA
Socioeconomic and environmental issues continue to plague the Niger
Delta. The 2009 Amnesty Program has been successful at stemming the
violence by militants, but oil theft, kidnapping, and other crimes
remain a problem. Continued government engagement and investment in
development is critical if progress is to be maintained. The Binational
Commission working group on the Niger Delta helps to highlight these
issues and encourages stronger government accountability in the Delta.
We have also encouraged the Nigerian Government to act upon the
recommendations of the U.N. Environmental Program report issued last
year.
BOKO HARAM
Security issues remain a central concern in Nigeria. A loosely
organized group known as Boko Haram has carried out attacks on Nigerian
and international interests, and attempts to exploit the legitimate
grievances of northern populations to garner recruits and public
sympathy. Boko Haram is not monolithic or homogenous and is composed of
several groups that remain primarily focused on discrediting the
Nigerian Government. As Boko Haram is focused primarily on local
Nigerian issues and actors, they respond principally to political and
security developments within Nigeria. Attacks ascribed to members of
this group have improved in sophistication and increased in number over
the last few years, and we take the potential threat to American lives
and interests very seriously. There are reports of contact and growing
relationships between elements of Boko Haram and other extremists in
Africa, including al-Qaeda in the Islamic Maghreb. While we are careful
not to conflate these groups, we are monitoring the situation closely.
The Nigerian government must effectively engage communities
vulnerable to extremist violence by addressing the underlying political
and socioeconomic problems in the North. The government must also
promote respect for human rights by its security forces, whose heavy-
handed tactics and extrajudicial killings reinforce the belief that
Abuja is insensitive to the concerns of the North. The appointment of
credible northerners to lead the government response to northern
grievances would be an important and tangible step toward reversing
that perception.
MUSLIM-CHRISTIAN TOLERANCE
It is important to note that religion is not the primary driver
behind extremist violence in Nigeria. While some seek to inflame
Muslim-Christian tensions, Nigeria's religious and ethnic diversity is
one of its greatest strengths, and there are many examples of
communities working together to protect each other. To support those
leaders advocating tolerance in the diverse and sometimes troubled
Middle Belt region, we have a $700,000 program to strengthen the
conflict prevention capacity of religious leaders.
HUMAN RIGHTS
As we support credible Nigerian voices advocating for positive
change, the promotion and protection of human rights remains a priority
in our engagements with the Nigerian Government. Reports of human
rights abuses by Nigerian security forces are alarming--the Nigerian
people deserve a government and security services that work to protect
them, and the Nigerian Government must respond quickly to allegations
of abuses, and hold perpetrators accountable, in order to build trust
with the communities that they serve.
The challenges facing Nigeria are great, but Nigeria is up to the
task. It has a large and very talented professional class, an abundance
of natural resources, and a strategic location along the West African
coast. We stand ready to partner with those Nigerian leaders committed
to tackling the country's multiple challenges. Building on its strong
partnerships in the international community, and drawing on its
strengths, Nigeria can build on the momentum of last year's elections
and begin to develop the structures for better governance and service
delivery to its people.
Thank you again for the opportunity to speak with you today on this
important issue. I welcome any questions you may have.
Senator Coons. Thank you, Ambassador Carson. Thank you for
your testimony.
Ms. Cromer.
STATEMENT OF SHARON CROMER, SENIOR DEPUTY ADMINISTRATOR FOR
AFRICA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON,
DC
Ms. Cromer. Good afternoon, Chairman Coons and Ranking
Member Isakson.
Thank you for inviting me to speak to you today. As
Assistant Secretary Carson has stated, Nigeria is among the
United States most strategic African partners. Assistant
Secretary Carson is furthering that partnership through the
Binational Commission, signed last year. This important
political dialogue touches on each of the most crucial issues
facing Nigeria.
Today, I will build on Assistant Secretary Carson's remarks
and briefly discuss three main points--the USAID development
framework in Nigeria, the impact of Boko Haram on United States
priorities, and the areas of interest for this hearing, namely,
USAID's efforts to improve governance and increase trade and
investment.
First the development framework. Home to the seventh-
largest population in the world, Nigeria is the world's largest
contributor to peacekeeping missions in Africa, the fifth-
largest supplier of United States crude oil imports, Africa's
second-largest economy, and home to the continent's largest
Muslim population.
In Nigeria, the U.S. Government's goal is not to
unilaterally plan or implement development work, but rather to
help Nigerians come together to solve and address their own
problems. We strive to support the government's engagement with
its people to address deficiencies and demonstrate the benefits
of development and efficient use of the country's own
resources.
In our development partnership with Nigeria, the United
States seeks to help Nigerians strengthen the country's
governance, delivery of quality basic services, and trade.
While some activities are conducted nationwide, we have focused
considerable resources geographically in northern Nigeria.
At the national level, USAID supports key policy reforms
and ensures that diverse voices are heard. For example, in
2010, women, people with disabilities, Muslims, and Christians
participated in the electoral reform process that ultimately
led to the fairest and most transparent elections in Nigeria's
50-year history.
Yet many regions still feel disenfranchised, destabilizing
the government, the country, and the region. In 2010, nearly
100 million Nigerians made less than $1 a day, 10 percent more
than in 2004. Most of the poor can be found in northern
Nigeria.
Of the 10 million children not enrolled in school, most
reside in the north, and only 30 percent of northerners have
access to safe drinking water and adequate sanitation. Boko
Haram targets these disenfranchised people, preying on their
desire for improved service delivery and to speak and to be
heard.
My second point is the impact of Boko Haram on U.S.
priorities. Because extremist views feed on people's lack of
fundamental health and education services, USAID will continue
to work with state and local governments to help them improve
the delivery of social services in the north.
The Millennium Development Goals to reduce maternal and
child mortality in Africa cannot be achieved without major
improvements in the health status of Nigeria's women and
children. Nigeria's maternal mortality rate is among the
highest in the world, 545 deaths for every 100,000 live births.
The average woman in the north has more than seven children
in her lifetime. Many of them die before the age of 5 from
malaria or preventable diseases. We focus our work with
Nigerians to treat and prevent malaria, tuberculosis, HIV and
AIDS, improve the health of mothers and children, including
immunizations, birth preparedness, maternity services, and
obstetric fistula repair.
There are 30 million primary-age schoolchildren.
Approximately one-third are not enrolled in school. A large
portion of out-of-school children reside in the north. USAID
supports equitable access to education through teacher
training, support for girls' learning, and a focus on improving
reading skills. We also work to create a culture of peace,
promoting interfaith dialogue to reduce sources of tension in
the north.
My third point is to share our programs on governance and
increased support to trade. USAID works to assist the
government in institutionalizing systems that combat
corruption. We start at the national level, ensuring that
diverse voices are heard on key legislation, which can be a
source of tension and disenfranchisement nationwide, and then
we help Nigerians to implement the law at the state and local
level.
As stated previously, USAID provided opportunities for
diverse groups to participate in the electoral reform process.
While there were flaws in the April 2011 elections, they have
been held as Nigeria's first credible elections since the end
of military rule.
USAID plans to help improve the elections in 2015 by
supporting the organizational development of political parties,
strengthening the electoral commission's effort to develop a
new voter registrar, and furthering civil society input into
the electoral and constitutional reform process.
Also, in May 2011 President Jonathan signed the freedom of
information bill, which will enable citizens to access
information that will enhance transparency and accountability
at all levels of government and spur advocacy for needed
reforms and service delivery. Thanks to USAID, information
about that law was quickly and widely accessible to 93 million
cellular users through a free app that allows easy download of
the entire law.
In September 2011, the Minister of Finance resumed
publication of federal, state, and local budget allocations
last made public in 2003.
And finally, trade and investment. Nigeria, with its
location, population size, vast resources, and relatively
sophisticated infrastructure, financial systems, and
communications, make it a key trade hub for the region,
especially in light of current food crisis.
USAID is working with the government to promote trade by
modernizing and reforming the customs system and revising
legislation to be in line with global best practices. Our West
Africa Trade Hub facilitates Nigeria's participation in the
African Growth and Opportunity Act and its exports of
economically important cash crops that employ thousands of
farmers. Increasing exports of nonpetroleum products helps to
increase food security and create jobs, while assistance to
entrepreneurs further stimulates growth.
I will conclude by stating that Nigeria's political
leadership faces many critical choices moving forward. These
leaders must engage politically, socially, and economically
with marginalized populations and pursue reforms that invest in
all of its people.
In turn, Nigerians must hold their government accountable.
We are hopeful that the new generation of Nigerians will engage
with their leadership so that the country will not stagnate or
backslide, but rather provide a better future for all.
Thank you.
[The prepared statement of Ms. Cromer follows:]
Prepared Statement of Senior Deputy Assistant Administrator
Sharon Cromer
Good afternoon, Chairman Coons, Ranking Member Isakson, and members
of the subcommittee. Thank you for inviting me to speak with you today
about Nigeria. It is always an honor and pleasure to have the chance to
discuss our work with you and hear your input.
Before I begin, I want to express our deepest sympathies on the
passing of our friend and colleague, Representative Donald Payne.
Congressman Payne championed USAID's work around the world, while also
challenging us to always strive to do better. He will be sorely missed,
but his legacy will live on through the many, many lives he touched.
Nigeria is among the United States most strategic African partners.
Home to the seventh-largest population in the world, Nigeria is the
world's largest contributor to peacekeeping missions in Africa, the
fifth-largest supplier of U.S. crude oil imports, Africa's second-
largest economy, and home to the continent's largest Muslim population.
Nigeria plays a significant role in African regional affairs through
the African Union, the Economic Community of West African States, and
counterterrorism and transnational crime efforts.
Despite relatively strong economic growth over the past 7 years,
poverty remains a major concern due to Nigeria's inadequate
infrastructure, a dearth of incentives and policies that promote
private sector development, and poor access to quality basic education
and health services. Oil and gas revenues dominate the government's
income, but agriculture, Nigeria's largest employer, contributes very
little. Endemic corruption at all levels of society, poor governance,
and weak health and education systems constrain progress; a massive and
growing youth population combined with widespread unemployment, and
recurring outbreaks of sectarian, ethnic, and communal violence
threaten overall stability.
However, there are promising signs. Since 2003, Nigeria has been
carrying out an ambitious agenda of reforms in public finance, banking,
the electoral process, oil and gas, power, telecommunications, ports,
steel, and mining. On May 29, 2011, President Goodluck Jonathan and 26
state governors were sworn in for 4-year terms after elections that
were characterized by observers as the freest and fairest in Nigeria's
history. The government's new and very strong economic management team
is poised to play a crucial role in carrying out sound macroeconomic
policies and strengthening trade and investment to sustain the growth
that will be needed to create jobs.
GOVERNANCE
Last year, Nigerians participated in arguably the most credible and
transparent elections in the country's 50-year history. In May 2011,
President Jonathan signed the Freedom of Information (FOI) bill into
law, enabling citizens to access information that will enhance
transparency and accountability at all levels of government and spur
advocacy for needed reforms and service delivery. Information about the
law was quickly and widely accessible to 93 million cellular users
thanks to a free, easily navigable USAID-supported application that
allows users to download the entire law to a cell phone. In September
2011, the law received a further boost when Nigeria's Minister of
Finance resumed publication of federal, state, and local budget
allocations, which were last made public during the Obasanjo
administration in 2003.
However, roadblocks to a strong democracy persist at all levels of
governance. Conflict--whether triggered by political rivalries,
competition for resources, or communal, ethnic, or religious tension--
poses a challenge to consolidating gains and strengthening democratic
institutions. Corruption pervades the daily lives of Nigerians. Civil
society lacks both the capacity and the resources to effectively engage
with government and advocate for change. Government institutions have
not established meaningful partnerships with citizens or the private
sector, which lack the capacity to carry out their own mandates.
While the international community and many Nigerians recognized
that Nigeria's 2011 elections were a vast improvement over previous
polls, there were many flaws that must be addressed before the 2015
elections, including underage voting, electoral fraud, and election-
related violence. USAID will provide assistance to update Nigeria's
flawed voter registry with the goal of registering the highest number
of eligible voters before the next elections. USAID is also funding
voter and civic education campaigns that target under-represented
groups, such as women, youth, and people with disabilities, to ensure
that they can participate in the electoral process. Eight to ten
political parties will be trained on the elections' new legal
framework, including how to build coalitions and how to conduct
outreach to their members. USAID will also support civil society
coalitions in mounting nationwide advocacy campaigns that promote
needed reforms and stimulate interest and support for a national
dialogue on electoral reform. To further identify problems that could
undermine the credibility of future elections, USAID, in collaboration
with Nigeria's Independent National Elections Commission and other key
stakeholders, will conduct an assessment of the 2011 elections that
will be used to develop the Commission's action plan and approach to
electoral reform, management, and security.
To promote the rule of law, USAID supports federal courts,
including the Supreme Court and Courts of Appeal, which have shown a
willingness to reform and to operate effectively and transparently. The
Judiciary Undergirding, Development and Gateway to Empowerment project
will build on progress made by previous work with the judicial branch,
which improved court operations in Abuja, Lagos, and Kaduna, to further
strengthen the institutional capacity of the Supreme Court, Courts of
Appeal, Federal High Courts, and the Judicial Commission. These
activities will be designed to ensure that these institutions are able
to maintain accountable and transparent operations even after our
assistance ends. In addition, USAID will support management reforms
that improve the efficiency of the federal courts, which will improve
public perception. The program will also build public demand for the
autonomy of the courts and constituencies for targeted public policy
reforms to achieve judicial independence. To ensure a more equitable
judicial system, USAID will implement innovative approaches, including
helping to establish professional legal associations and supporting
nongovernmental organizations that assist citizens in gaining access to
the judicial system.
State and local governments have considerable political autonomy,
manage more than half of Nigeria's revenues, and deliver most essential
services. To deepen good governance, USAID has increased its engagement
at the state and local levels. Approaches include building the capacity
of key government agencies to plan, budget, track, manage, and evaluate
development programs; reinforcing policies and systems that improve
transparency; mobilizing civil society and the private sector to
participate in community planning and budgeting, monitor financial
flows, and assess the quality of services rendered; and assisting civil
society organizations to hold elected officials accountable. USAID also
supports civil society groups and media to strengthen their capacity to
understand and advocate for critical reforms, especially those that
combat corruption.
Building on the success of anticorruption legislation already
passed, USAID continues to seek to ensure effective implementation of
the Freedom of Information Law at both the national and state levels.
We also continue to focus on the Government's effective implementation
of other recently enacted laws, including the Public Procurement and
Fiscal Responsibility Laws and on building the capacity of civil
society groups to increase their membership base and strengthen
alliances. To strengthen the media's ability to better cover critical
issues--particularly controversial ones--in a noninflammatory manner,
journalists and staff are being trained to produce interactive programs
that give voice to a range of perspectives, bring citizens,
policymakers and civil society actors together for informed
discussions, and provide opportunities for citizens to ask policymakers
questions directly. These programs engage audiences in informed
discussion around governance issues such as oil sector transparency,
health and water management, community services, education, and
conflict mitigation.
SECURITY
Although it has been described as an ``anchor state'' for West
Africa, Nigeria's uneven development has created conditions for
extremism that pose a formidable threat to stability in Nigeria and the
wider region. A high poverty rate, coupled with a large population of
unemployed and underemployed youth--41.6 percent of those between the
ages of 15-24--heightens the risk. Over the next 25 years the country's
total population will balloon to more than 300 million people,
seriously straining the country's ability to meet future needs for jobs
and adequate social services such as health and education, further
sowing discontent.
In early 2011, President Jonathan announced a series of measures to
confront terrorism in Nigeria, including working toward the approval of
an antiterrorism bill, which was passed in June 2011. Through the
Trans-Sahara Counterterrorism Partnership (TSCTP), USAID coordinates
with the Departments of State and Defense to strengthen Nigeria's
counterterrorism capabilities, enhance and institutionalizing
cooperation among the country's security forces, promoting democratic
governance, discrediting terrorist ideology, and reinforcing bilateral
military ties with the United States.
At the same time, creating a culture of peace that includes
historically marginalized groups is critical for political, social, and
religious stability. Since 2000, USAID has worked with the Government
to reduce violence through efforts that prevent and mitigate conflict
arising from sectarian and ethnic tensions. A new project set to begin
in 2012 will focus on strengthening the ability of Nigerian
stakeholders, including government, to better understand and address
causes and consequences of violence and conflict in priority states and
communities. To this end, we also promote interfaith dialogue and
stronger collaboration between government and civil society to reduce
sources of tension and build robust conflict early-warning systems.
TRADE AND INVESTMENT
Nigeria displays the characteristics of a dual economy: one
dominant sector (oil) with weak links to the rest of the economy, and a
typical developing economy that is heavily dependent on agriculture and
trade. Trade in Nigeria faces multiple challenges, from lack of
consistent policy support to poor infrastructure, including inadequate
roads and inefficient, expensive, and congested port facilities.
Private enterprises lack capacity and access to credit, as well as
strong regulatory frameworks and enforcement of existing laws. Despite
the Government's economic reform efforts over the last 12 years, its
capacity to overcome these persistent obstacles to growth has a long
way to go. Overall, economic growth without equity in terms of resource
distribution and access to the benefits of economic growth is a key
issue.
The reform efforts, supported with revenue from high oil production
and high oil prices, have contributed significantly to macroeconomic
improvement, including reduced inflation and strong GDP growth, which
remained steady in 2011 at 7.2 percent. While significant, this growth
rate is insufficient to raise the majority of Nigerians out of poverty,
especially given the relatively high population growth rate of 3
percent, and that over half of its people live on less than $2 a day.
The economy is structurally imbalanced, with the most highly
concentrated export structure in the world. Oil accounts for 95 percent
of Nigeria's export earnings and 85 percent of government revenue,
while agriculture--which employs 7 out of 10 Nigerians--accounts for
only 2.6 percent. The performance of the agricultural sector in Nigeria
has been improving in recent years, and the new Minister of
Agriculture, who was previously an official with the Rockefeller
Foundation and the Alliance for a Green Revolution in Africa (AGRA), is
introducing significant and positive changes, many based on experience
from USAID agriculture programs. Unemployment is also a growing
concern, with up to 3 million young people entering the labor market
each year.
U.S. assistance is focused on expanding trade and investment
opportunities to promote regional trade and food security objectives.
To improve agricultural productivity and expand rural job opportunities
USAID is supporting adequate infrastructure such as roads, ports, and
energy, and good policies at both the federal and state levels. Funds
are leveraged from the Government of Nigeria, the World Bank, and other
donors to rehabilitate and construct rural roads. USAID also works
closely with the Government to promote trade by modernizing and
reforming the customs system, revising legislation to be in line with
global best practices, and supporting the customs risk management unit.
With USAID support the Lagos-Kano-Jibiya Transport Corridor Management
Group is positioned to be a stronger advocate for improved governance
and trade flow for this transportation corridor that is vital for
national and regional food security. At the same time, assistance to
private enterprises will stimulate exports by providing export-ready
private enterprises with training in finance and export competitiveness
and linking them to international markets and partners. USAID's West
Africa Trade Hub supports Nigeria's implementation of the ECOWAS Trade
Liberalization Scheme, business-to-business linkages, increased trade
under the African Growth and Opportunity Act, and exports of
economically important cash crops that employ thousands of farmers,
including cashews and shea. USAID's African Competitiveness and Trade
Expansion initiative is working to increase exports of nonpetroleum
products, especially unique high value-added agricultural products
within the larger context of helping to increase food security and
create jobs. To further expand links with the U.S. market and
neighboring country markets, the Trade Hub's business-to-business
program includes a ``buyer alert'' service to inform and link client
enterprises to new markets in the United States and West Africa.
Agriculture programs are aligned with Feed the Future, the U.S.
Government's global hunger and food security initiative, to address
policy constraints at the local and national levels, as well as support
the harmonization of Nigeria's economic policies within the wider
region of West Africa. Agriculture programs concentrate on building
private sector demand-driven value chains for selected commodities--
those that have a ready market with value-added possibilities and that
can generate employment. The program seeks to develop partnerships with
private sector firms involved in processing, agricultural input supply
and that are interested in expanding exports to the West Africa region,
the United States, and other international markets. Through Feed the
Future, USAID is helping build Nigeria's capacity to participate more
fully in the Comprehensive Africa Agriculture Development Program and
support the timely distribution of inputs such as fertilizer, seeds,
and pesticides. To help Nigeria make further progress toward meeting
the Millennium Development Goals, USAID is supporting the Government's
work on agricultural policy, irrigation, farmer training, and
technology development. USAID also helps to expand access to credit
through partnerships with commercial banks and the Central Bank of
Nigeria.
In the energy sector, Nigeria struggles to successfully integrate
sustainable economic development and environmental protection.
Annually, Nigeria loses $2 billion of potential revenue through natural
gas flaring, a process that not only negatively impacts Nigeria's
economy, but also creates significant greenhouse gas emissions. Efforts
to reduce flaring have been implemented for decades, but we have
recently seen policy progress in the Government's Accelerated Gas
Development Project, which seeks to eliminate flaring and reduce
greenhouse gas emissions. USAID support to develop the country's small
hydropower sector will reduce the volume of greenhouse gas emissions
from diesel generators, and the increased supply of hydropower will
improve infrastructure stability. USAID is also helping to establish an
organizational framework, staffing plan, and procurement manual as the
basis for operationalizing the Nigeria Bulk Electricity Trading Company
to strengthen its mission to procure viable independent power provider
capacity on the most attractive commercial and financial terms for
consumers. We are also exploring opportunities to provide partial risk
guarantees to local commercial banks to increase lending to companies
for clean energy projects. These activities have generated optimism
that private sector participation in power generation and supply will
soon result in the availability of additional megawatts of clean
energy.
USAID has a burgeoning portfolio of public-private cooperation in
Nigeria, with over 20 operational partnerships that engage the private
sector in development investments. In one such partnership, Chevron is
matching USAID's $25 million investment to improve the agriculture
value chain for selected crops in the Niger Delta.
CONCLUSION
Nigeria's political leadership faces many critical choices moving
forward. It can choose to expend enormous resources to contain the
consequences of ungoverned spaces and disparity in incomes, or it can
pursue reforms that will create a large, educated middle-income country
that is sufficiently invested in a future that inspires people and
holds government accountable while engaging politically, socially, and
economically marginalized populations. We are hopeful that the new
generation of Nigerians will engage with their leadership so that the
country will not stagnate or backslide, but rather work to shape a
better future for all.
Senator Coons. Thank you, Ms. Cromer.
Mr. Marin.
STATEMENT OF PAUL MARIN, REGIONAL DIRECTOR FOR SUB-SAHARAN
AFRICA, U.S. TRADE AND DEVELOPMENT AGENCY, ARLINGTON, VA
Mr. Marin. Thank you.
Chairman Coons, Ranking Member Isakson, and members of the
subcommittee, thank you for the opportunity to testify today
about the experience of the U.S. Trade and Development Agency
in advancing U.S. trade and investment interests in Nigeria.
USTDA's unique trade and development mandate positions our
agency to create jobs here at home, while promoting sustainable
infrastructure in developing countries around the world, such
as Nigeria. We welcome the subcommittee's interest in USTDA's
work, and we look forward to outlining some of the
opportunities and some of the challenges that we have faced
while working in Nigeria, particularly in the energy sector.
In carrying out our dual trade and development mission,
USTDA is unique among U.S. Government agencies in the way that
we bring U.S. equipment, technology, and expertise to bear in
advancing economic development and U.S. commercial interests
overseas. Specifically, USTDA relies on the U.S. private sector
to carry out project-specific feasibility studies, technical
assistance programs, and reverse trade missions.
Each of these activities is designed to assist countries to
make informed investment decisions while at the same time
positioning U.S. companies to apply their goods and services
for use in new infrastructure development or expansion. It is
important to note that USTDA focuses its program on sectors
where U.S. firms are globally competitive, such as energy,
including clean energy, transportation, and information and
communication technology.
USTDA works closely with private industry and trade
associations, and with these partners, we have developed a
successful program that matches U.S. commercial solutions to
the development needs of our partner countries. This approach
has generated a return of over $58 in U.S. exports for every
program dollar expended worldwide. USTDA's programs have
directly supported nearly $18 billion in U.S. exports over the
past 10 years.
Now, in Nigeria, there are significant commercial
opportunities. But as my fellow panelists have discussed, there
are also some very complicated and difficult challenges that
U.S. businesses and investors face.
The first challenge is one of country risk, both real and
perceived, related to Nigeria's security environment. Another
challenge relates to fuel and electricity subsidies that
distort the market. It is exceedingly difficult to attract
private sector investment if the market does not allow
investors the ability to make a profit.
And finally, another major challenge to trade and
investment in Nigeria is corruption and the lack of a
predictable business climate.
Now while there are challenges, Nigeria's energy sector
offers tremendous opportunities for United States firms. As we
are all aware, Nigeria has significant oil and gas reserves,
and under the right market conditions, Nigeria can attract
significant new United States private sector investment as well
as utilize United States technologies to expand its oil-
refining capacity.
Nigeria's gas sector is in a relatively early stage of
development, which presents significant export opportunities
for gas infrastructure, including pipelines, storage
facilities, and processing plants, for example. In these areas,
we have been working closely with Nigeria's private sector to
introduce them to United States technological solutions that
can help Nigeria build its gas infrastructure.
Another area of promise for U.S. companies is in power
generation. Nigeria suffers from frequent power outages, and
there are opportunities to refurbish existing power plants as
well as to construct new ones. And under the right market
conditions, there are opportunities for independent power
producers to feed power directly into the grid.
The lack of reliable and efficient electricity has forced
many Nigerian companies to turn to expensive and polluting
diesel fuel generators. In response, TDA recently funded
studies with several Nigerian private sector companies that
want to reduce the reliance on diesel fuel. These companies are
interested in investing in renewable energy technologies from
the United States, including solar and wind power solutions.
Another significant area for United States technology and
investment is in Nigeria's electricity transmission systems.
And in particular, U.S. companies are well positioned to supply
smart grid technologies that help utilities manage their grid
and minimize power losses. In this area, USTDA is working with
three state-owned utilities to identify suitable technologies
that will make these companies more efficient as well as more
attractive to potential private sector investors.
So, in conclusion, I would like to thank the subcommittee
for inviting me here today. I will end this testimony by
stating that despite its challenges, Nigeria is a market that
offers significant commercial opportunities for U.S. firms.
Nigeria should be at the forefront of any strategy to
increase United States exports to Africa. USTDA welcomes the
opportunity to work with you to advance economic development in
Africa and to stimulate the United States economy in these
challenging times.
So, again, thank you, Senators Coons and Isakson, for
having me here today and for allowing the U.S. Trade and
Development Agency to discuss our successes on the continent.
Thank you.
[The prepared statement of Mr. Marin follows:]
Prepared Statement of Paul Marin
Chairman Coons, Ranking Member Isakson, and members of the
subcommittee, thank you for the opportunity to testify today about the
U.S. Trade and Development Agency's experience in advancing U.S. trade
and investment interests in Nigeria. USTDA's unique trade and
development mandate positions our Agency to create jobs here at home,
while promoting sustainable infrastructure development in markets
around the world, such as Nigeria. We welcome the subcommittee's
interest in USTDA's work in Nigeria, and we look forward to outlining
some of the opportunities and challenges that we have faced while
working in Nigeria, particularly in the energy sector.
Chairman Coons, we know that you and U.S. Senators Durbin and
Boozman, among many others, are committed to creating U.S. jobs and
increasing U.S. exports to Africa. We also know that you are committed
to improving America's competitiveness throughout the continent. We
wholeheartedly agree with these objectives, and that African
development and trade must be a priority. These objectives are
precisely in line with the mission of USTDA--to create opportunities
for U.S. exports and U.S. jobs, while promoting economic development in
developing countries such as Nigeria. Nigeria, despite its challenges,
is a market that offers significant commercial opportunities for U.S.
firms and should be at the forefront of any strategy to increase U.S.
exports to Africa.
MISSION OF THE U.S. TRADE AND DEVELOPMENT AGENCY
In carrying out our dual trade and development mission, the Agency
is unique among U.S. Government agencies in the way it brings U.S.
equipment, technology, and expertise to bear in advancing economic
development and U.S. commercial interests overseas. Specifically, USTDA
relies on the U.S. private sector to carry out project-specific
feasibility studies; technical assistance programs; and reverse trade
missions. Each of these activities is designed to assist countries to
make informed investment decisions while also better positioning U.S.
companies and their goods and services for use in new infrastructure
construction or expansion. It is important to note that USTDA focuses
its program on sectors where U.S. firms are competitive such as energy,
with a particular focus on clean energy; transportation; and
information and communication technology. Much of USTDA's program in
Nigeria has centered on the energy sector, in particular.
Working with private industry and trade associations such as the
U.S. Chamber of Commerce, the National Association of Manufacturers,
and the Corporate Council on Africa, USTDA has developed a successful
program that matches the development needs of our partner countries
with the best U.S. expertise and ingenuity in the manufacturing and
services sectors. Using this model, we have seen the benefits that
exports provide to both host countries and the U.S. economy. The
success of this approach is demonstrated by a historical return of over
$58 in exports of U.S.-manufactured goods and services for every
program dollar expended worldwide. In total, USTDA's program has
directly contributed to over $17.9 billion in U.S. exports over the
past 10 years.
USTDA'S PROGRAM IN NIGERIA: CHALLENGES AND OPPORTUNITIES
Opportunities
Nigeria's energy sector offers tremendous opportunities for U.S.
firms. As we are all aware, Nigeria possesses significant oil and gas
reserves--in fact, the country is one of the top five exporters of
crude oil to the United States. Still, Nigeria imports around 70
percent of its refined fuels. Under the right market conditions and
regulatory environment, Nigeria possesses the potential to attract
significant new U.S. private sector investment and technologies for oil
exploration and refining.
We understand from our U.S. private sector partners that Nigeria's
gas reserves even outstrip its reserves of oil. However, Nigeria's gas
sector is in a relative stage of infancy, needing significant
investments for growth, including technologies that can be sourced from
the United States.
USTDA sees export opportunities related to extending Nigeria's gas
pipelines, gas processing, and gas storage infrastructure. In these
areas, USTDA has been active with the private Nigerian company, Oando,
PLC, which is one of Africa's largest energy companies. In June 2011,
USTDA supported a reverse trade mission to the United States for Oando
officials who are looking to the United States for gas storage and
processing solutions. Following this visit, USTDA and Oando entered
into an agreement to jointly fund a feasibility study on the
development of a new gas pipeline that will service the southwest part
of the country. The objective of this activity is to highlight U.S.
technological solutions in a sector that offers tremendous
opportunities for U.S. firms.
Another significant area of promise for U.S. companies in Nigeria
is power generation. Nigeria suffers from frequent power outages, and
there are opportunities related to the refurbishment of existing
powerplants, as well as the construction of new powerplants. About 50
percent Nigerians have access to power, although it is unreliable and
intermittent. Under the right market conditions, we see opportunities
for independent power producers to feed power into the grid; we also
are aware of opportunities in remote locations that are not currently
served by the grid, as well as business opportunities with larger scale
private sector electricity consumers.
The lack of reliable and efficient electricity has forced many
Nigerian companies to turn to expensive and polluting diesel fuel
generators. USTDA has recently funded studies with several Nigerian
private sector companies that are looking to reduce their reliance on
diesel fuel by investing in renewable energy technologies from the
United States, including solar and wind power solutions.
Another potentially important area for U.S. technology and
investment is in Nigeria's electricity transmission and distribution
grids. There are locations in Nigeria's power grid that lose up to 40
percent of the power that is being generated. These losses are mostly
due to old infrastructure that is not being maintained, as well as
theft (aka nontechnical losses). In addition to supplying new equipment
for the power grid, U.S. companies are world leaders in the development
of smart grid technologies. These technologies help power utilities to
better manage the power grid, to improve the stability of the grid, to
minimize power losses, and to improve customer service. In this area,
USTDA is currently working with three power distribution companies in
Nigeria, in Abuja, Eko, and Ikeja, to identify suitable technologies
and infrastructure requirements to make these state-owned companies
more efficient, as well as more attractive to potential private sector
investors.
Challenges
While there are significant opportunities in Nigeria, there are
also some very complicated and difficult challenges that U.S.
businesses and investors face.
The first challenge is one of country risk--both real and
perceived. Stories of kidnappings of businesspeople, vandalism and
theft of infrastructure assets, and violent clashes between ethnic and
religious groups have raised serious concerns related to security and
to Nigeria as a business and investment location.
Another challenge relates to fuel and electricity subsidies that
distort the market. Prior to January of this year, fuel subsidies--or,
allowances--accounted for an astonishing 25 percent of Nigeria's
Government spending. In terms of building new oil refineries and
powerplants, it is exceedingly difficult to attract private sector
investment if the market does not allow investors the ability to cover
their costs and make a profit. While the Government of Nigeria has
taken recent steps to roll back some of its subsidies and to provide
guarantees to investors, it faces significant public opposition to some
of these changes.
The Jonathan administration announced a serious power sector reform
strategy in 2010. This included the partial privatization of state-
owned generation and distribution assets and activities. Several U.S.
companies have been short-listed as potential buyers for these assets.
The government is working to finalize model power purchase agreements
and off-taker payment guarantees to support its major privatization
program. Privatization efforts are moving slowly and the government
recently announced that the privatization would be delayed until
October 2012.
Another major challenge to trade and investment in Nigeria is
corruption and a lack of transparency in government procurement. As my
fellow panelists will be covering/have covered this subject in some
detail, we will defer to their testimony on the subject.
And finally, there is tremendous talent and knowledge in Nigeria,
but not enough to keep up with the demands of a growing infrastructure.
Nigerians who have been trained in highly specialized fields are often
recruited by firms in the Middle East, Europe, and even the United
States. Training is costly, but without specialized technical and
financial knowledge, it is a great challenge for Nigerian entities to
negotiate complicated power purchase agreements and other business
arrangements that help to build Nigeria's energy infrastructure. The
need for specialized expertise also impacts U.S. companies' ability to
operate in Nigeria as local content provisions require local sourcing
of oil and gas supplies that normally not manufactured in Nigeria.
CONCLUSION
I would like to thank the subcommittee for inviting me here today.
I will end this testimony by repeating that despite its challenges,
Nigeria is a market that offers significant commercial opportunities
for U.S. firms and should be front and center of any strategy to
increase U.S. exports to Africa. Exports to Nigeria benefit both
Nigeria and the U.S. economy. We are proud of our Agency's history of
opening markets and creating jobs through exports. We welcome the
opportunity to work with you to encourage U.S. companies to avail
themselves of opportunities in Nigeria, and throughout Africa, which
will advance Africa's economic development and stimulate the U.S.
economy in these challenging times.
Senator Coons. Thank you very much, Mr. Marin.
We are now going to begin apparently 10-minute rounds of
questions.
I am going to start, if I might, Mr. Marin, just where you
left off. There was some content in your written testimony
about the challenges that are faced about the very real risks
that American companies looking at investment opportunities in
Nigeria face, both around vandalism, theft of infrastructure,
or corruption and so forth.
What role does private issuance of political risk insurance
by OPIC or by private issuers, what role does the availability
of risk insurance play? And what do you see as the major
barriers to persuading American companies that they can and
should either return to Nigeria or for the first time look at
it as a market opportunity?
Mr. Marin. OK. Thank you for the question.
I think it is important to note that the U.S. Government
has numerous agencies that could help mitigate the risk of
United States companies entering Nigeria and sub-Saharan Africa
and thriving in these markets. You mentioned the Overseas
Private Investment Corporation. The U.S. Trade and Development
Agency also is one of these agencies that helps to mitigate
that risk.
And I believe that the U.S. Government is very well
coordinated among the trade and finance agencies, as well as
TDA and our relationship with technical agencies like the
Department of Energy and the Department of Transportation, to
well represent U.S. interests in these markets and to mitigate
risk.
Now I think that maybe I will just sort of leave it there
and not get into too many details.
Senator Coons. Ms. Cromer, you mentioned the West African
Trade Hub. Senator Isakson and I had an opportunity in Accra to
visit with a number of different Commerce and State employees
who were working hard on improving regional trade, on reducing
barriers, both transportation and customs and less licit
barriers.
What is USAID doing to work with Nigeria to overcome these
barriers? How vital or important do you think sustaining our
presence in the West Africa Trade Hub is, and what do you see
as the additional resources needed to bolster these and related
activities?
Ms. Cromer. As my colleague said, trade in Nigeria faces
multiple challenges, from the lack of adequate policy support
to poor infrastructure, including inadequate roads and
inefficient and expensive, congested port facilities. Private
sector lacks capacity to access credit, and there are many more
challenges.
Our assistance under the Trade Hub focuses on a couple of
things. We work closely with the government to promote trade by
modernizing and reforming the customs system, revising
legislation to be in line with global best practices, and
supporting the customs risk management unit, reducing the time
it takes for goods to clear ports and border posts.
Our West Africa Trade Hub is also working with small and
medium-sized enterprises to increase export of nonpetroleum
products, especially high value-added agricultural products
under AGOA. And we are also helping to expand credit to small
enterprises through commercial banks, improving their access to
markets and meeting the high product standards of Europe and
the United States.
Finally, we are supporting the Trade Facilitation Task
Force. This is an interministerial body that is set up to
improve Nigeria's ranking in the global trade facilitation
scorecard. And we are coordinating with DFID, our British
counterpart, on technical assistance to be provided to the
Ministry of Trade and Investment.
We are also supporting the AGOA resource center. We have
done so since June 2009. I am sure Ambassador Carson can also
speak to this, but our AGOA resource center has, since its
opening, supported more than 300 companies, training them in
export readiness--these are Nigerian companies--and provided
over 30 referrals of companies that were export-ready or near
export-ready with some information to help them in
international trade shows and the like.
You asked about the transport corridors and some of the
borders. We are supporting the Lagos-Kano-Jibiya transport
corridor. There is a management group that oversees that
corridor. We are helping them to position themselves to be a
stronger advocate for improved governance and food security
along those corridors so that transport can be made easier in
that important corridor.
Senator Coons. That is great. Thank you.
Ambassador Carson, what are the biggest takeaways and what
are the followup actions from the recent State Department-led
trade mission to Nigeria?
I wanted to, first, commend the State Department for seeing
the enormous opportunity that is available in Africa, for
coordinating and leading a trade effort. But I would be
interested in hearing what you learned from the 10 companies,
how they assessed the opportunities in Nigeria and the
continent? What you think are the most important followup
activities we and others in the Senate could be engaged in?
Ambassador Carson. Thank you for that question, Senator
Coons.
First of all, I would say this trade mission, which went to
four countries, focused on the energy sector. The transmission,
the distribution, and the generation of power, which is in
enormously short supply in many parts of Africa, but
particularly in the countries that we visited, including
Nigeria.
Takeaways from this is that there is a tremendous interest
in having American investment and American businesses in
Africa. Africa wants and needs our investment. They need our
technology. They need our expertise, and they want and seek our
collaboration.
Second is that not enough American companies are going into
Africa because they lack the information and understanding
about countries like Nigeria. And when they have information,
it is incomplete information, and it is information that more
often frightens them than encourages them.
A third takeaway is that we need to engage more
aggressively in sending trade missions into Africa to show our
skills, show our interests, and to win some of the many
contracts that are to be had out there in the energy area.
Secretary of State Clinton has made it a priority for the
Department of State, including the Africa Bureau, to promote
economic statecraft and diplomacy. Our efforts are designed to
do this.
I applaud our colleagues from USTDA, who were a part of our
effort, as well as our colleagues from the Export-Import Bank,
who also participated in this trade mission as well. Equally,
our companies demonstrated through some of their success that
by going out there, they can find deals.
In Nigeria, for example, Symbion Power was able to fund a
development, a relationship with Transcorp, one of Nigeria's
largest corporations. And they are partnering on a couple of
energy efforts, efforts to win tenders, to take over and run
power-generating companies in Nigeria.
Energy International, a mid-sized American company which
has done enormously well in Latin America, also found great
opportunities in Nigeria. But the bottom line is, is that we
need to do more in the promotion of our business interests in
Africa.
Indeed, we believe that the continent is the last global
economic frontier. And if that belief is correct, that
assumption is correct, Nigeria is, in fact, the most promising
and the most important of those markets for much of what you
said in your opening remarks, Mr. Chairman, a country of 170
million people.
The largest oil producer on the continent, a country which
already supplies us with some 9 percent of our petroleum needs,
just behind Saudi Arabia, but yet a country, which today
probably only generates enough power as probably two or three
city blocks in New York City. And equally, a country which has
virtually no functioning railroad at all.
So it is a country with enormous potential, enormous needs,
and we need to be out there exposing American companies to the
prospects and the possibilities that exist there.
Senator Coons. Thank you very much, Ambassador Carson. I
will follow up on this topic next.
But I will now turn to my partner, Senator Johnny Isakson.
Senator Isakson. Thank you, Senator Coons.
Ambassador Carson, corruption is one of the big barriers in
Nigeria to business entering the country, to the continuation
of governance. And Senator Coons and I attended a reception on
our visit to Nigeria with some of the newly elected
parliamentarians. Most, in fact, I think if I remember right,
there was an 80-percent turnover in that election when Goodluck
Jonathan was elected.
And the major issue that elected these new parliamentarians
was that the old parliamentarians had spent 80 to 100 percent
of their budgets on their own personal income and families and
had no staff, no services, and did nothing that a normal
representative would do. And they were, obviously, running on a
platform of ending that and not having that kind of corruption.
Do you know or, if you can, if you don't, can you find out
if that has improved in Nigeria? Because if the government
continues to be corrupt, you are only going to breed more
corruption in a civil society.
Ambassador Carson. Senator, I will give you a specific
answer to that question in writing. But let me just make two
quick points.
Corruption is one of the most serious impediments to doing
business in Nigeria today, and corruption is a problem both in
the government sector and also in the private sector. But
despite
this, it should not, in fact, be the impediment that keeps us
from engaging.
Third point that I would like to make is that President
Goodluck Jonathan has made some serious, important, and
creditable appointments in the anticorruption field. One is
that he has appointed a Mr. Nuhu Ribadu, who, in fact, did run
the anticorruption commission under former President Obasanjo
and was ultimately fired because he was doing his job too well.
Mr. Ribadu has been put in charge of ensuring that the
accounts and assets and income of the oil sector are
transparent and accounted for, are going where they are
supposed to be going, and that the money that is generated by
oil gets into the treasury.
Equally, a new anticorruption czar has been appointed to
run the Economic and Financial Crimes Commission, and the
individual running that is a Mr. Ibrahim Lamorde. He has, like
Mr. Nuhu Ribadu, an excellent reputation. Both of these
individuals are of the highest integrity, and they have been
put in very sensitive and key jobs.
Mr. Lamorde to fight corruption generally and to bring
cases against those in government and the private sector, and
in the case of Nuhu Ribadu, to oversee assets and finances and
income from the oil sector. We think these are very promising
appointments that indicate on the part of President Jonathan
that he is paying attention.
But I will get a written response to your question about
how we see the government's performance.
[The written reply supplied by Johnnie Carson follows:]
We are hopeful that we will see an improvement in good governance
by the members of this National Assembly, as corruption remains a
central obstacle to progress in Nigeria. We certainly concur that an
independent and effective legislative branch is a vital component of
successful democratic governance, and we will continue to engage the
Nigerian National Assembly members as they carry out their mandates.
There is a great deal of enthusiasm for reform within this National
Assembly, which is evident as the newly elected members and leadership
set their agenda. For example, they are considering ways to ensure the
independence of Nigeria's anticorruption institutions and help shield
those agencies from political pressure or interference.
Senator Isakson. Well, if these new appointees do as good a
job as Commissioner Jega did in terms of the Elections
Commission that really managed that first successful election,
the whole country will be a lot better off.
Mr. Marin, you mentioned the smart grid. You mentioned the
need in Nigeria for reliable energy. How would USTDA facilitate
and who would they work with to get United States investment in
a smart grid in Nigeria? What type of company?
Mr. Marin. Thank you for the question.
TDA has a fairly robust set of program tools to facilitate
partnerships between United States companies and potential
partners in Nigeria. One tool that we are most proud of is our
reverse trade mission program. It is what we are contributing
to the National Export Initiative.
Since 2010, we have supported about 15 reverse trade
missions from sub-Saharan Africa to the United States to bring
decisionmakers and buyers from the continent to the United
States to meet with U.S. sources of supply and to look at U.S.
technology in an operating environment.
Most recently, about a month or two ago, we had a
delegation from South Africa come to the States, including the
State of Georgia, to look at some of the smart grid
technologies that U.S. companies can supply. And so, that
particular mission, we are hoping, is a model for other work
that we can do in Nigeria in the power sector.
And as the Ambassador had mentioned, USTDA participated in
the energy sector mission to Nigeria, and we are currently
working with State, Commerce, and all of our other U.S.
Government partners to identify perhaps a reverse trade mission
that we could do as a followup to that particular mission that
was hosted in Nigeria.
Senator Isakson. So you act really as a facilitator, almost
like a Chamber of Commerce, trying to match need in Nigeria
with ability of the United States to deliver product. Is that a
fair statement?
Mr. Marin. With the reverse trade mission program, yes.
Most of the work that we do as an agency relates to project
preparation assistance.
So, for example, we worked with a municipality in South
Africa called eThekwini. It is the Durban municipality, the
third-biggest utility in the country. We worked with them on a
consultancy to define all the different technical requirements
to build out smart grid infrastructure in that city, and they
are currently moving forward with U.S. technology.
So the bread and butter of the program is doing those sorts
of project preparation activities to provide access to U.S.
consultants that are experts in this area and, hopefully, to
level the playing field so that U.S. companies can be
successful selling smart grid technologies or other
technologies to key markets in sub-Saharan Africa, such as
Nigeria and South Africa.
Senator Isakson. Thank you very much.
Ms. Cromer, you said in your remarks about northern Nigeria
and the fear of Boko Haram taking over, one of the things that
USAID was trying to facilitate was social services in the
north. Does that include medical services and, in particular,
the vaccinations for measles, tetanus, and polio?
Ms. Cromer. Yes, it does. Thank you.
I was looking for an opportunity to respond to your
question about polio. Polio eradication has been elusive in
Nigeria, despite our most strident efforts. We have seen polio
recede and then spread again over time in Nigeria. Of course,
this has impact on the region and globally.
We are trying to address this issue through dissemination
of accurate information on the immunization, as well as working
very closely with local government, community leaders,
religious leaders, and traditional leaders in northern Nigeria.
We think it is absolutely critical that we work with a full
array of stakeholders, including Muslim women's organizations.
They have been very
effective in getting the word out to mothers and fathers and
having a good impact on increasing immunizations of children.
We have seen success as Nigerian stakeholders at the local
level engage. We are taking an integrated immunization
approach, where polio campaigns are integrated with other
immunization campaigns. But total eradication is still elusive.
I can provide you more information on our polio campaign,
as well as other maternal-child health efforts in northern
Nigeria.
Senator Isakson. I would appreciate that because my
observation, when we were in Nigeria and particularly after
meeting with the imam from the north, was that that is what we
have got to be able to crack to win the confidence of leaders,
and I think a lot of the leaders in the mosques, so they accept
United States help and United States NGOs with regard to health
care, vaccination, and things of that nature.
The healthier they are, the less disease they have, the
lower we can lower their infant mortality rate, the better off
they are going to be. And usually people like Boko Haram aren't
able to take advantage of people who feel like their lives are
improving. It is usually people who feel like they have no
improvement ahead.
Ambassador Carson, I want to read you--this will be my last
question, too. I may run a minute over, but I would like your
response to this.
General Andrew Azazi, Nigeria's national security adviser,
wrote in a January 2012 Washington Times op/ed piece that the
United States ``lags far behind other countries in forging a
meaningful strategic counterterrorism relationship with
Nigeria.''
What do you make of that statement, and how do you assess
United States-Nigerian cooperation in this sector? And the op/
ed was written immediately after the attacks on the Christians
in Nigeria early this year.
Ambassador Carson. Thank you, Senator Coons--Senator
Isakson, pardon me.
I disagree with that statement. We have worked with the
Nigerians very closely. Secretary Clinton has met in over the
last 6 months on two occasions with President Goodluck
Jonathan. On both of those occasions, General Azazi, the
national security adviser, was present at those meetings.
In both of those meetings, we had long and extended
discussions about the security situation in the north. We have
volunteered assistance and said that we are prepared to work in
greater collaboration than we are right now with the Nigerians,
and we have offered a number of suggestions and programs which
we think will significantly enhance their ability to go after
Boko Haram.
We believe very firmly that there needs to be a comprehen-
sive strategy, one in which the Government of Nigeria not only
addresses the security threat, but equally addresses the
socioeconomic problems that exist in northern Nigeria and which
were so graphically laid out on the charts put forward by
Chairman Coons.
We believe that there are major social and economic
disparities in the north that have to be addressed alongside
and in parallel with dealing with the security issues. But we
also, coming back to the security side, have worked directly
with the Nigerian authorities, with our investigative services
in the field.
We have provided the Nigerian Government with training and
with equipment that deal with countering terrorism,
investigating terrorism, and we have had FBI agents and others
on the ground in Nigeria working in a collaborative
relationship with the Nigerian authorities.
We can all do more. We are encouraging the Nigerians to do
more, and we have made some suggestions as to how they can do
it. But we are providing training and instructions and working
with them, and we will continue to step up our efforts to work
with them to the extent that they are willing to embrace ideas
and suggestions that we put on the table.
Senator Isakson. Well, excuse me for going a little bit
further. I thank you for your answer.
Because when I read that and reflected back on our visit,
we visited with FBI agents on the ground in Lagos, Nigeria. I
am familiar with a lot of counterterrorism efforts that we have
made all across West Africa, and it seemed like to me that was
a defensive statement by the government after these attacks
against Christians, which is when this comment came, more to
deflect attention away from them rather than being an
indictment against the United States.
And I think your answer just indicated that as being
correct because I think the United States is doing a lot in
counterterrorism and certainly doesn't lag behind anybody else
in the Western world in terms of terrorism.
Ambassador Carson. Senator Isakson, you are right. It is
not that we can't do more. We are attempting to do more. As I
say, we have put some suggestions on the table, and we will
continue to put others on the table for the Nigerian Government
to think about and hopefully adopt.
But with respect to programs, our FBI and others have
worked alongside of the Nigerian Government in explosives
detection, in identification of potential threats, in forensics
and examination of bombmaking materials, and in investigations
in tracking down individuals and following specific leads.
We continue to advocate a comprehensive policy, however,
one in which we say that there is a need to address the
security aspects of the concerns they have in the north, but
also to address the socioeconomic problems that give rise to
recruitment and support.
Senator Isakson. Thank you, Mr. Chairman. And I apologize
for going over.
Senator Coons. No need, Senator Isakson. This is a topic of
great interest to both of us.
If the Jonathan administration, Ambassador Carson, has made
real progress in appointing strong leaders around
anticorruption efforts, what more can and should they be doing
to deal with the significant and the sustained divides around
poverty and economic opportunity between the north and south?
In your written testimony, you said that appointing a
credible northerner to address longstanding grievances would be
one of the most important first steps the Jonathan
administration could take. And then how are we working in
partnership with them, with USAID resources, with economic
development opportunities, to focus on the importance, both in
terms of security and long-term stability, of addressing
northern grievances in order to reduce some of the recruitment
and some of the legitimacy that Boko Haram is seeking and some
of the tensions that they seek to inflame?
Ambassador Carson. Thank you very much for that question.
All of the social indicators for the north are far worse
than they are for the south, for the southern part of the
country. We believe that it is important to put and ensure more
resources for education, for health care, for water and
sanitation, and for agriculture and employment opportunities be
directed toward that area, very much the way the government
directed increased efforts toward the Niger Delta in order to
help improve the situation in that part of Nigeria.
We think that there should be probably an effort to have
creditable northern figures be spokespersons for the government
in trying to advance an economic and social agenda that will
have credibility with the population there and improving of the
lives to demonstrate that the central government genuinely is
concerned about the situation. Equally, we, ourselves, are
looking at ways to expand our USAID operations in the north to
put more emphasis and focus on some of the key education and
social programs.
Equally, we would like to expand our diplomatic
representation there by opening a consulate in northern Nigeria
hopefully in Kano. It is the desire of the Secretary for us to
do so, and we actively look forward to trying to do this. It
would give us a presence in the north diplomatically, but it
would also give us an opportunity to expand our development
assistance activities into the north as well.
Senator Coons. Thank you, Mr. Ambassador.
If I could, both of us are going to have to leave
relatively soon, as I think I told our panel earlier. I would
be interested in hearing, Ms. Cromer and Mr. Marin, about how
the reality or the perception of danger, of the threat of
terrorism, of corruption, is it or is it not a significant
barrier to attracting interest in investment by United States
companies in Nigeria?
And Ms. Cromer, from USAID's perspective, you mentioned an
interfaith dialogue program efforts to help facilitate peace
and reconciliation. That was of particular interest to me, and
I would be interested in hearing how you think USAID's work,
particularly in the north and to states of focus, are able to
move forward reconciliation and progress that can lead to a
more positive trade and bilateral environment?
If you would in order.
Mr. Marin.
Mr. Marin. Thank you for the question.
Nigeria is a complicated market, and I think what I have
tried to demonstrate today in this discussion is that there are
opportunities and there are challenges. And some companies will
be more risk averse than others. We found large companies
willing to forgo the market, and we found small companies
willing to engage the market.
So I think when companies are made aware of the resources
of the agencies such the U.S. Trade and Development Agency, the
U.S. Export-Import Bank, and OPIC and others, I think when they
have utilized the full resources and the tools that the U.S.
Government has to provide, they enter the market understanding
that they have got the weight of the U.S. Government behind
them.
I would like to point to an example, a success story that
we are very proud of at TDA, involving a small business in
Illinois called Roeslein Associates. It is a company that
manufactures aluminum can processing lines, and they approached
TDA several years ago, asking for assistance to cofund a
feasibility study on whether the Lagos market was large enough
to accommodate a $30-$35 million plant.
And the results of the feasibility study were positive.
This U.S. company in a small, economically depressed area of
Illinois won a $30-$35 million contract as a consequence. That
particular contract, that particular transaction was guaranteed
using the U.S. Export-Import Bank.
And what was really terrific to see is that this company
has moved ahead with a second such facility in Nigeria on their
own. So I think that is the sort of example that we, as an
agency, are capable of enabling, together with our other U.S.
Government partners and with the assistance of the State
Department and the general consulate in Lagos and the Embassy
in Abuja.
Senator Coons. Well, thank you. And thank you for
highlighting USTDA's capabilities. That is, I think, an
important part of our having an all-of-government strategy to
accessing these important and growing markets.
Ms. Cromer, if you would, just around the question of
interfaith dialogue and the focused efforts of USAID in the
north to deal with some of these ongoing sources of tension?
Ms. Cromer. USAID is funding three 5-year programs in the
north that focus on governance, integrated family health, and
education. We are focusing currently on two states in the
north, Bauchi and Sokoto. They are our lead states.
They were selected because they were considered at the time
to be reforming states, having significant needs in health and
education, and were going to serve as model states for possible
expansion to other states in the north.
We are working in these states with about $38 million going
into these states, and we have had some good success to date.
But we do hope to expand this in the area of governance and
conflict mitigation in particular.
Since 2000, USAID has been working with governments in the
north to reduce violence through prevention and mitigation of
conflict rising from sectarian and ethnic tensions. This year,
we are designing a new project that will focus on strengthening
the ability of Nigerian stakeholders to better understand the
causes and consequences of violence and conflict and address
those causes and consequences.
We promote interfaith dialogue and a stronger collaboration
between government and civil society to reduce the tensions.
You mentioned the Interfaith Mediation Center, Senator. Since
2002, we have been supporting the Interfaith Mediation Center,
directed by Pastor James Wuye and Imam Muhammad Ashafa.
With this assistance, USAID supports the center, which
hosts Muslim-Christian dialogue forums, focuses on interfaith
dialogue, ethnic relations, youth and student engagement,
trauma healing for women and youth, early warning and response
to outbreaks, media sensitization, and special election
monitoring. So we have had a robust engagement with the
Interfaith Mediation Center, which we plan to continue.
Senator Coons. Thank you, Ms. Cromer.
My last question for Ambassador Carson would simply be what
do you think we ought to be doing, both in the Senate and as a
government as a whole, in terms of improving our bilateral
relationship with Nigeria? It is a nation of enormous both
opportunity, as we have spoken about today, and challenges. It
is a significant recipient of U.S. aid.
There are encouraging signs of progress. There are things
not yet completed. The petroleum bill, for example, improvement
in fighting corruption, strengthening security sector
partnerships. There is also, I think, some real progress you
have pointed to today in terms of our development work, our
trade promotion assistance.
What do you think is the top priority for the United
States, Ambassador Carson, in terms of strengthening our
bilateral relationship and areas of focus for our working with
the people of Nigeria?
Ambassador Carson. I think we need to continue to work to
make our strategic Binational Commission a vehicle for
advancing our overall partnership with Nigeria. That Binational
Commission has a number of working groups that include energy,
agriculture, and security, and democracy and governance.
We need to use that Binational Commission in a
comprehensive, whole-of-government approach to work with the
Nigerian Government to address issues of mutual concern and to
find vehicles and programs for addressing the many challenges
that they have.
If we can use that Binational Commission effectively at a
high level, we can be a strong and useful partner with Nigeria
in helping it to improve its energy sector, improving and
strengthening its agricultural sector, dealing with some of the
security concerns that they have, and working with them in
health care and in strengthening their democratic institutions,
including the election commission.
We need also to work hard through our own Government
agencies, whether it is the State Department, OPIC, Export-
Import Bank, USTDA, to ensure that American companies are aware
of the enormous number of opportunities that exist commercially
in Nigeria. Opportunities that they can take advantage of if
they are patient, persistent, and know that they have the
resources of the U.S. Government behind them.
Senator Coons. Thank you very much.
I want to thank both Senator Isakson for joining with me in
this hearing today and thank our distinguished panel for
sharing your insights and expertise on this critically
important subject.
With that, I will conclude the hearing. I will keep the
record open to the close of business tomorrow for any members
of the committee who wish to submit questions for the record.
Senator Coons. But with that, this hearing is hereby
adjourned.
[Whereupon, at 3:35 p.m., the hearing was adjourned.]
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