14 Aug

The week ahead – Forex issues will cause more outrage, Buhari, beware of Deby

The economic outlook for Nigeria shows mixed signals that are disturbing. Lawmakers at the National Assembly complained on the floor of the House on the need to summon the CBN Governor to explain the reasons behind the ban on foreign currency deposits. The lawmakers pointed out that entrepreneurs and traders, who are mostly affected by the decision, cannot afford to transfer foreign currency funds sourced from the parallel market to their off shore suppliers. This also applies to some multinational companies and other indigenous firms with expatriate staff who are finding it difficult to pay them their salaries, often in foreign currency.

Meanwhile the President promised to start the trial of those that looted the Nigerian treasury during the government of President Jonathan. He restated that the trial will commence in few weeks.

Energy crisis over?
The energy crisis appears to have subsided as the past months of chaotic fuel queues and absence of electricity appear to be fading into memory.

Sources say the owners of the distribution companies are making frantic efforts to justify the huge federal government intervention in the sector via all kinds of loans and grants, especially given the current government’s commitment to make them to account for previous funds given, and deadlines to recall the bank guarantee on those facilities.

On the petrol supply side, marketers and oil traders are owing the NNPC and by extension the FG a few dozen cargoes of petrol from the crude oil swap deal, and which many of them failed to deliver or allegedly diverted to other countries.

Deby shows up again
The President has given service chiefs 90 days to end the insurgency. A tall order no doubt, but one that is achievable with the right mix of political will, equipment for the frontline troops, and proper intelligence.

Boko Haram meanwhile, detonated a bomb in Sabon Gari, Borno state, killing no less than fifty and injuring many. The group also raided villages on the fringes on the state, murdering dozens. The terror group continues to have freedom of movement and action, because their strategy of moving in small columns of 6 to 12 appears to be very effective, and they have masked as internally displaced persons, in most cases to evade security cordons.

Still on this, Chad’s president, Idris Deby, has again announced another individual named Daoud as the leader of Boko Haram. Deby claimed that Daoud took over from Abu Shekau, and is ready to negotiate with the Nigerian government. It needs to be restated that Idris Deby brokered the previous ceasefire deals that failed to stand.

Arrests in the Delta
The Joint Military Task Force in the Niger Delta, Operation Pulo Shield, arrested a notorious gang leader, two suspected kidnappers and two oil thieves involved in oil bunkering. The arrests were a reaction to the August 7 attack on JTF troops near Nembe, Bayelsa State which killed four soldiers and a policeman. Fears of increased militant activity in the region remain.

Accidents highlight inadequate emergency response
Two people were killed when a train crashed into a truck in the Pen Cinema area of Lagos on Monday. Two days later, a helicopter in transit from Port Harcourt to Lagos crashed in the Lagos Lagoon, killing six of its occupants. In the case of the helicopter crash, eye witness accounts at the General Hospital, Gbagada, explained there was no adequate equipment to attend to the seriously injured.

RECOMMENDATIONS

  • We restate our earlier call for the President to appoint an Economic Adviser and a Minister of Finance, to articulate his policy options and work with the CBN to restore investor confidence, stabilize the naira and reassure Nigerians that the economy is not going up in flames.
  • The power distribution companies appear to be working hard as a result of pressure from the FG and Nigerians, and also the consequences of obligations they have regarding bank guarantees the FG may recall this month. On the other hand the fuel supply, while improved, is not significantly better. We urge the FG to resolve all outstanding issues and get these sectors stable.
  • The Nigerian government needs all the elements of national might to weigh down the Boko Haram insurgency. Again, we keep emphasizing on the protection of the population, and an effective civilian administration to be put in place in areas that have already been secured. We also urge the creation of a robust programme to counter violent extremism.
  • We urge President Buhari to ignore the antics of Chad’s President Deby. This is not the first time that he has claimed to know the right leadership of Boko Haram. Deby was responsible for the reversal of gains the military had in mid-2014 when he helped arrange a phantom ceasefire. While making efforts to cooperate with him, we must not forget that he looked the other way for years, while Boko Haram used his country as a rear base to attack Nigeria.
  • Props must be given to the JTF for battling cultists, kidnappers and oil bunkerers in the Niger Delta, and urge them to ensure the menace is contained, and eventually stopped.
  • The train and helicopter incidents highlight the sorry state of emergency response in Nigeria. This sector, which caters to the 99%, has much too often, been neglected by the government. We recommend that the states raise funds, probably from taxation, and set up highly trained, and mobile emergency response teams.
  • We call on President Buhari to match words with action concerning the corruption probes. We urge him to sanitize the justice administration sector, without which the anti-corruption crusade will fail. However, a note of caution here, all probes, and trials, must follow due process.