```

[Senate Hearing 112-651]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-651

 
       A CLOSER LOOK AT NIGERIA: SECURITY, GOVERNANCE, AND TRADE

=======================================================================

                                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

                               __________

       Printed for the use of the Committee on Foreign Relations

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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        

                         ------------          

                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

                              ----------                              
                                                                   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

                              ----------                              

                        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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