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To: Aduke who wrote (64)	7/21/1999 2:46:00 AM
From: CIMA	Respond to of 280

Obasanjo Successful Abroad, Challenged at Home Summary: Nigeria's first democratically elected president in 20 years, Olusegun Obasanjo, has succeeded in polishing the tarnished international image of Nigeria. Until July 18, he had yet to be challenged at his second role, maintaining order among Nigeria's 250 plus ethnic groups -- especially the Hausa that controlled the former military government and his own Yoruba. A two-day clash between Hausa and Yoruba in the village of Shagamu on July 18-19 left 66 people dead, and though the fighting has ceased, the tension has not. Obasanjo responded to this clash moderately, and if the violence does not recur or spread, it may bode well for his domestic agenda. If ethnic tensions worsen, however, the Hausa dominated military may reconsider its decision to hand over power to a civilian president -- particularly a military one. Analysis: Violence erupted on July 18 between members of the Yoruba and Hausa ethnic groups in the southern Nigerian town of Shagamu and carried on into the following day. At least 66 people were killed in the town, which lies some 40 kilometers north of Lagos. And while a tense peace has emerged at the urging of local leaders -- and with the arrival of a Mobile Police Force detachment -- Hausas fearful of Yoruba retaliation reportedly flooded out of the town on July 19 and have not yet returned. The Shagamu violence follows clashes between three other ethnic groups -- Itsekiri, the Urhobo, and Ijaw -- over the spoils of local government in the oil town of Warri on the eve of newly elected President Olusegun Obasanjo's inauguration in late May, which left at least 100 people dead. International acclaim for the recent democratic transition in Nigeria has overshadowed the primary, fundamental, and ongoing problem facing President Obasanjo. Nigeria's political problems stem from competition between the country's estimated 250 ethnic groups, and particularly between the two largest groups, the Hausa in the north and the Yoruba in the south. Obasanjo was tapped for the presidency by a group of northern military leaders for two reasons. One was to polish up Nigeria's international reputation with at least a reasonable facsimile of democratically elected civilian government. The other was, if not to bridge the gap between the competing ethnic groups, then at least to blunt ethnic unrest. Obasanjo succeeded in the first task. Obasanjo, who led Nigeria's military government from 1976-1979 following the assassination of General Murtala Muhammad, was the first Nigerian military leader to voluntarily hand over power to a democratically elected civilian government. Until his own inauguration, he was also the only military leader to do so. When last in power, Obasanjo built an international reputation for his foreign policy, which was critical of the white minority governments in South Africa and Zimbabwe. After stepping down, and thereby boosting his international credentials, Obasanjo remained in the public eye, sitting on international commissions, running for UN Secretary General, and criticizing subsequent Nigerian military regimes. Obasanjo was sentenced to life in prison under former military leader General Sani Abacha for allegedly plotting a coup attempt, though his sentence was shortened due to international pressure and he was released following Abacha's death last year. Obasanjo's first two months in office have seen him acting the statesman. He has attended the Organization of African Unity Summit in Algiers and visited countries all over Africa. He has also been keen to put himself in the forefront of international efforts to end the region's various wars. All told, Obasanjo was the most politically viable and acceptable candidate, and when Nigeria's military leaders relinquished power to him, they succeeded in mending Nigeria's image -- for the time being. Success on the second count is not so clear. Obasanjo was backed by a cabal of northern Nigerian interests, including former Nigerian leader General Ibrahim Babangida, in large part because Obasanjo was a pro-northern Yoruba. It was hoped that, through a Yoruba president with a Hausa power base, the Hausa could effectively maintain power while pacifying the Yoruba. The Yoruba had lost their political leader, Moshood Abiola, to an apparent -- if curiously timed -- heart attack almost immediately after the death of General Sani Abacha. However, Obasanjo has been criticized even in his own home district as being a puppet of the military. The make-up of his cabinet does little to undermine this notion as it is filled with people who have, at various times in the past, served in the military governments that have largely dominated Nigeria for the last 30 years. And while mistrusted by the Yoruba, Obasanjo is also mistrusted by the Hausa, who are unsure of just how devoted he is to their interests. According to media sources, there is a growing fear among the Hausa that they may face repercussions under their new Yoruba president for the past 15 years of Hausa politico-military dominance. The violence in Shagamu is the first real test of Obasanjo's ability to bridge the ethnic gap. As of July 20 the situation appears to be stable, with minimum government intervention. A curfew has been established, a Mobile Police Force detachment has been sent into the area, and an investigation is underway. The Shagamu clash thus far appears to be an isolated incident, and to be under control. The underlying issues have not gone away, however, and Obasanjo's moderate response may not be as effective should the unrest spread or recur in Shagamu. Obasanjo is essentially faced with two choices when it comes to ethnic violence. He can attempt to protect his carefully crafted international and domestic image as a democrat and act benignly toward outbreaks of violence. Or he can crack down on freedoms in an effort to suppress the violent ethnic competition. This is how military governments in Nigeria dealt with ethnic tension for 30 years -- albeit to the detriment of their international reputation. For now, Obasanjo is primarily interested in the international game, and is hoping that a mild hand, his image as a peacemaker, and deep divisions among the Yoruba will suffice to control outbreaks of violence such as those in Warri and Shagamu. This remains to be seen. There have been calls for retribution, particularly from the Yoruba, but leaders of both groups are attempting to quiet things down. If, however, there is a spiral of violence and revenge, Obasanjo may be forced to crack down -- or have the military do it for him. __________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com ___________________________________________________ STRATFOR.COM 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: stratfor.com Email: info@stratfor.com ___________________________________________________ (c) 1999, Stratfor, Inc.

To: Aduke who wrote (64)	8/1/1999 12:45:00 AM
From: CIMA	Respond to of 280

I hear once again this is the week. 50,000 @ .12 bought just before the close Friday. Could be a sign?

To: Aduke who wrote (64)	8/25/1999 2:05:00 AM
From: CIMA	Read Replies (3) \| Respond to of 280

Obasanjo's Moves Threaten Military Power Summary: Nigerian President Olesegun Obasanjo has taken steps recently that, if fully implemented, will change the nature of the Nigerian military's ties to the state. His administration has recently announced drastic cuts in the military, efforts to limit the military's involvement in the oil sector and the establishment of a "truth commission" that will begin investigations on abuses committed during the military's long reign in Nigeria. The question is how far the military will let him go. At stake is stability in central Africa's most populous nation, which is also a major source of the world's oil. Analysis: In his first few months in power, Nigerian President Olesegun Obasanjo appeared to be making all the moves expected of a new president. He purged the military of 93 high-level officers for involvement in political activities, meaning they held positions of power and influence in the Sani Abacha regime, and he appointed ministers who had experience in past military regimes. His key petroleum "advisor," Rilwanu Lukman, was foreign minister in Ibrahim Babangida's military regime and Defense Minister Theophilus Danjuma was chief of staff of the army during Obasanjo's own tenure as military ruler from 1976-1979. Since taking these steps, however, Obasanjo has begun testing the limits of his civilian government. First, on August 18, Defense Minister Danjuma announced that the Nigerian military would be cut from 80,000 to 50,000 troops over the next few months. At the time, the excuse for taking such drastic measures was the need to professionalize and upgrade the military by cutting the fat. A report in London's Daily Telegraph quotes a Nigerian government source as saying the real aim of the cuts was to protect future governments from the threat of a military coup. That said, it would have been impossible for Obasanjo to make the decision on his own. No single force in Nigerian politics can protect him from military retribution though Obasanjo does enjoy some military support, particularly among former military dictator Babangida's clique. Signs that the military may have disagreed with the cuts emerged on August 24. The president said in a nationally televised address that his goal was to "redefine" the role of the army and that the cuts announced by Danjuma were not set in stone. With this in mind, it is possible that the announced cuts were merely a trial balloon sent up to see how the military would react. Recent rumors about Danjuma's mental health may have been designed to give Obasanjo some cover in case there are serious signs of a backlash. It always helps to have a "crazy man" around on whom you can blame seemingly irrational acts. Second, Obasanjo has taken some strong steps to limit the military's involvement in the oil sector, a place where high-level officers are believed to have enriched themselves in the past. The Nigerian oil sector has traditionally been divided approximately 50-50 between foreign and domestic oil companies. Most of the domestic companies have involved the use of front companies, widely believed to be associated with military officers and friends of the regime. The same day Obasanjo announced the military cuts, the Nigerian National Petroleum Company announced a restructuring of the Nigerian oil sector, which exports 1.8 billion barrels-per-day (bpd). The extraordinary thing about the restructuring was that virtually all the contracts went to foreign oil companies rather than Nigerian firms, reducing a traditional military stronghold. Before the restructuring, the government laid down strict conditions for the sector. Any company that sought a contract was required to demonstrate substantial turnover, profits and a willingness to invest in local communities. These were conditions that the traditional front companies simply could not meet. The other half of Nigeria's oil exports are carried out by six large international oil consortia (Shell, Texaco, Mobil, Total, Agip and Chevron). This group has come under increasing pressure due to unrest in the oil-producing Niger Delta region. While the area produces most of Nigeria's oil, it remains one of the nation's poorest areas. Over the last several years, local tribes have engaged in an increasingly violent campaign against the oil companies. Heavy military deployments to the Niger Delta have been unable to stem this violence, recently epitomized by sabotage, kidnapping and the murder of foreign oil workers. At a meeting on August 1 with NNPC Chairman Olaseki it was revealed that unrest in the region had already cost Nigeria $1 billion in oil revenue in 1999. Nigeria's oil revenues have dropped precipitously since 1997, when it earned $15 billion. Obasanjo's current budget, submitted in July, expects 1999 oil revenue to amount to only $8 billion. Shell, Nigeria's largest single producer, is currently operating at only 25% of its capacity of 1 million bpd and on August 17, Texaco announced that it was suspending its 65,000 bpd operations due to community unrest. While Nigeria was producing close to its OPEC quota in May its July figures show a 70,000 bpd drop in production. These numbers are expected to continue dropping for the next few months at least. The establishment of a "truth commission" to uncover evidence of human rights abuses by past military regimes is the third step Obasanjo has taken to ruffling the feathers of former colleagues. If experience in other countries is any indicator of what may happen, Obasanjo may have difficulty controlling the commission. The justice running the commission has a reputation for independence and the commission has already received over 8,000 complaints against the military regime. Interestingly enough, Obasanjo is in the unusual position of potentially being both a defendant and a plaintiff to the commission. From 1976 to 1979, he was the military ruler of Nigeria and from 1996 to 1998, he was a political prisoner. However it shakes out, it is unlikely that the military will appreciate having its dirty laundry aired in public, even if the commission's powers of enforcement are less than clear. To have undertaken such drastic steps against a military that has run his country for the last three decades, Obasanjo must feel protection from some area. We believe he is counting on two primary factors. First, the oil sector. With the awarding of the new oil contracts, it appears that Obasanjo is trying to encourage these companies to invest in the region where they are located. One of the direct causes of misery in the delta is that most of the money appropriated for community development has gone straight into the pockets of the military and other corrupt leaders. Obasanjo's moves to link oil development to community development are an attempt to win the "hearts and minds" of the local population and thereby reduce the violence. An indication that the strategy may already be paying dividends is the August 24 announcement that Shell has reached an agreement with the government and local tribes to resume operations in the delta. The other major force Obasanjo is counting on for protection is the international community. Obasanjo has long cultivated his personal international ties. During his years out of power he was a major player in the UN and was a front-runner to replace outgoing UN Secretary-General Perez de Cuellar in 1991. He also has close ties to former U.S. President Jimmy Carter. His focus in the first two months of office has seemingly been to improve Nigeria's foreign relations. Obasanjo's jet-setting is not accidental. Nigeria will be absolutely dependent on foreign aid and investment if it is ever going to be able to make its oil industry pay for the development of society as a whole. Obasanjo has succeeded brilliantly in his efforts to line up potential investors during his first months in office. This reserve would quickly dry up, however, if the military or serious unrest undermined the government. The military may realize this and is holding its hand in the interest of future economic gains. If this were not the case, we would expect a military coup in Abuja within the next few weeks. There are no indications that this is about to happen. Obasanjo is playing a dangerous game, betting everything on economic success. So far, the military appears to be willing to play along, accepting short-term losses in exchange for Obasanjo's long-term promises. The same can be said of the oil companies, which are Nigeria's key to economic success. By cutting the military as he campaigns against corruption, Obasanjo is clearly hoping to consolidate his power base during the current window of opportunity. It remains to be seen how long his honeymoon will last. If this policy does not begin to show success fairly quickly, Obasanjo's house of cards may well collapse. __________________________________________________ SUBSCRIBE to FREE, DAILY GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com UNSUBSCRIBE FROM THE GLOBAL INTELLIGENCE UPDATES (GIU) stratfor.com ___________________________________________________ STRATFOR.COM 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: stratfor.com Email: info@stratfor.com ___________________________________________________ (c) 1999, Stratfor, Inc.