07 Aug

The week ahead – Expect a revenue, and maybe power dip, as Shell pipeline leaks

The economic uncertainty continues with banks and the CBN agreeing on a policy to restrict the deposit of foreign currency into domiciliary accounts of both corporate and individual customers. This action saw the naira make some gains at the parallel market but also has constricted businesses especially the SMEs and individuals who rely on domiciliary accounts to conduct business offshore.

However, an even more pressing issue has arisen as last night Shell declared force majeure on gas supplies to Nigeria’s LNG export terminal on Bonny Island in Rivers State due to a pipeline leak. NLNG said that exports had so far been unaffected but that the company was discussing potentially rescheduling some shipments with its customers. NLNG produces 22 million metric tonnes of liquefied gas per year and has long-term supply contracts with buyers in Italy, Spain, Turkey, Portugal and France and also sells on the spot market.

Badeh spills the beans
As Air Marshal Alex Badeh, former Chief of Defence Staff, was pulled out in a ceremonial military parade last week. He, in a speech that underpinned the need for training on strategic communication, contradicted himself harshly when he narrated how the troops he led for a few years were under equipped and poorly trained. This he blamed on past regimes in connivance with Western governments. Air Marshal Badeh’s most recent position is contrary to the picture he painted few months ago on the state of Nigeria’s military.

While Badeh may deserve some credit for leading the charge against Boko Haram, the fact is that he never truly inspired his troops. He failed them in some leadership aspects. He must also shoulder the blame for going into a phantom ceasefire with the terrorist group. He also made a difficult situation worse when he told the international press he knew where the Chibok girls were, violating the principle of secrecy that informed the intelligence, having emanated from the US government forces in the region. Not done, the now departed military chief blamed the escalation of the Boko Haram insurgency on the political elite who used it to feather their nests. His position is not different from that of the late former national security adviser, Lt.Gen Owoeye Azazi, who traced the Boko Haram insurgency to the fallout of the PDP primaries of 2011. Recall that following that statement, Azazi was removed, and eventually perished in a helicopter crash.

Buhari faces the Niger Delta, NNPC as a means of securing revenue
President Buhari made a serious statement of intent when he appointed a world class oil and gas expert as the Group Managing Director of the NNPC. Dr Ibe Kachikwu, vice president of ExxonMobil, Africa region, is the new NNPC boss. He has since sacked all the Group Executive Directors and the MD of a subsidiary, PPMC, and restructured the directorates into four.

The President also authorised a fast track action plan to clean up Ogoniland, as recommended by the UNEP report. He reconstituted the implementation committee and urged stakeholders to come up with the initial sums for the clean up.

…and the farmer/herdsmen crisis
There was also an attempt made by the government to resolve the persistent issue of attacks by Fulani herdsmen in the North-Central region. Part of the attempt is aimed at fixing their relationship with the farming communities where they practice their grazing.

But another crisis has erupted
Reports emanating from Anambra East suggest that some Kogi indigenes invaded the Anambra communities at the border close to Ibaji, hacked some farmers to death, and sent others scampering for safety. This is not unconnected with the oil wells both state lay claim to.

Inter-agency rivalry causes security issues
Recently, media reports suggest that the Presidential Implementation Committee on Maritime Security, PICOMS, set up by President Obasanjo, to tackle sea piracy and oil bunkering had been undermined by the past government over a turf battle with NIMASA, over claims of usurpation of functions.

We have also studied the security trends in Lagos and arrived at the conclusion that criminal gangs operating in Mushin, Bariga, Fadeyi, Lagos Island, Ikorodu, Ajegunle, Ebute Metta and elsewhere, pose a more serious threat to the peace and safety of these communities. They operate in broad daylight, maiming citizens, stealing and damaging their properties in the process. The affected communities say the security services have abandoned them to their fate, and reports from people on the ground suggest that inter-agency issues are part of the root causes.

National Assembly decides to get some work done
On the political scene, the Senate resumed plenary in the shadows of court cases and a police probe over the alleged forgery of standing rules that elected the current NASS principal officers. They equally confirmed the appointment of service chiefs, with Senate President travelling to North East to inspect IDP camps. The House also resumed having resolved their differences and pledged to move forward.

The PDP caucus at the Senate also pledged to work with President Buhari, but complained that the APC government appears to be on witch-hunt against members of the former ruling party.

Recommendations

  • Whether the force majeure declared on gas may affect improved power supply in Lagos and its environs remains to be seen, but Nigeria needs to do a lot more to secure, and improve its pipeline network.
  • Air Marshal Alex Badeh made valid points albeit belatedly, but his confessions must be taken within the context that he also spearheaded attempts at rearmament under President Jonathan, and we call on President Buhari not to rely on the West alone for Nigeria’s defence needs but to continue the relationship with the East and South Africa who came to aid of Nigeria when it mattered most. We also call on the President to begin serious moves to revitalise Nigeria’s own military industries.
  • We urge the government to deploy intelligence, and ensure the last vestiges of political Boko Haram is eliminated and focus directed on the terror group that has aligned with the Islamic State in Iraq and Syria.
  • The new management of the NNPC must carry Nigerians along in its efforts at reforming the behemoth. We must see action plan and clear deadlines for delivery of goals, tasks and objectives.
  • The attempt to clean up Ogoni is a welcome development. Not just Ogoni alone but a policy plan to call up the entire Niger Delta must also be put in place, in terms of environmental and physical infrastructure.
  • We urge again for a speedy solution to carnage in the North Central and elsewhere, where Fulani Herdsmen and indigenous communities are engaged in daily orgy of blood-letting.
  • We urge the Anambra and Kogi governments to sit around the table to resolve the contentious border issues. The Federal government must also lead this process to ensure the development of the oil and gas industry in the area is not hampered by unnecessary war.
  • We remonstrate with the federal government to merge the defunct Presidential Implementation Committee On Maritime Security, PICOMS, with NIMASA, as a result of multi billion naira assets already sunk in the former. This will make for an effective approach in tackling sea piracy and some of the social unrest that affect communities where criminal gangs hold sway.
  • President Buhari needs to make two critical appointments without further delay: Chief Economic Adviser and the Minister of Finance.