30 Oct

The week ahead – The economy remains an issue, as does security in Lagos

Nigeria continues to experience a very difficult economic environment as the financial year gradually draw to a close. The IMF in its latest report on economic outlook of Africa, warned that countries like Nigeria may suffer as a result of fall in commodities prices. This came as the Vice President, Osibanjo insisted that Nigeria will not devalue the naira. Meanwhile, President Buhari travelled to New Delhi, India, for the INDIA-AFRICA Summit. It is worth noting that the President made the trip without assigning portfolios to the already confirmed ministerial nominees.

Still affecting the economy, electricity generation from the nation’s biggest power plant, Egbin, dropped to 660 megawatts from 813 mega watts. Supply to the national grid dropped from 3990.36 MW as October from 4,029.39 MW. Some reports say it’s due to the maintenance by Nigerian Gas Company of its supply lines. The maintenance may also affect other stations that receive gas from the NGC.

There was a wave of regulatory decisions in the past few days, the most catchy being the hefty fine of $5.2 billion slammed on MTN by the Nigerian Communications Commission for a breach of the regulations governing the registration of SIM cards. The NCC said that the telecoms giant allowed thousands of subscribers make use of their facility without registering their SIMS in contravention of the expiration date for SIM registration. Also this week, the Central Bank of Nigeria fined United Bank For Africa and the First Bank of Nigeria N4.2 billion for failing to remit federal government funds via the Treasury Single Account window. Finally, the Financial Reporting Council of Nigeria suspended senior officials of Stanbic-IBTC for allegedly filing misleading financial statements. The FRC also asked the bank to reverse their 2013 and 2014 financial results. Stanbic’s auditors, KPMG, were also penalised. The FRC made its decision on the strength of a petition written by some shareholders alleging the management and board authorised some unapproved transactions between the bank and foreign technical partners.

On Monday the FG directed the EFCC to probe its chairman, Ibrahim Lamorde. However, the following day, the House of Representatives countered, saying that the probe should be done by the ICPC instead. Lamorde has been fingered over claims of the non-remittance of recovered funds worth N1 trillion into the Consolidated Revenue Fund. George Uboh, the CEO of a security firm had written to the Solicitor General, Abdullahi Yola, making the allegations.

In Lagos, robbers continue to lay siege, aided by the traffic gridlock in the city. The Commissioner of Police in Lagos, Fatai Owoseni announced that he receives at least four traffic robbery alerts each day via his twitter handle, and disclosed that over 144 suspects have been arrested. Owoseni warned motorists to desist from patronising hawkers at night.

Up to sixty percent of illegal arms in circulation in the South-East geopolitical zone are produced locally. According to the presidential committee on Small Arms and Light Weapons, this is responsible for high rate of crime in the region especially kidnapping. Coincidentally, this revelation was made in the week that marked two years since the disappearance of Obafemi Awolowo University’s Prof Olomo, who had gone for a programme in Eket, Akwa Ibom State, and has not been seen or heard from since.

Former Head of State, General Yakubu Gowon criticised the Federal Government over the deadline given to end the Boko Haram insurgency, saying that no one can tell when a war is going to end. Speaking as a former Commander in Chief, Gowon said that it’s premature to give timelines and deadlines to a military operation, but added that such timelines could be meant to guide the army.

Speaking at a a North-East Humanitarian Multi Stakeholders Engagement held recently in Maiduguri, the chairman of the Presidential Committee on North East Intervention, General T.Y. Danjuma said that Nigeria needs N233 billion to rebuild the North-East. Meanwhile, the Governor of Borno State, Kashim Shettima, said that only two Local Government Areas are now under the control of Boko Haram.

COUNSEL

  • While building intercontinental relationships is a good thing, we are not exactly in support of the President leaving a crisis ridden country for a summit that is of dubious benefit to Nigeria. Following the Indian Prime Minister’s speech in New Delhi, we are unconvinced that any tangible gain will accrue to Nigeria from this trip, especially when compared with the urgent need to tackle the current economic downturn in the nation. That President Buhari travelled without assigning portfolios, or at least naming an economic team shows a disdain for the economy and investors. Moreso, the interference of his government with the autonomy of the CBN by making definite pronouncements on monetary policies is bound to scare away investors, leaving the economy sliding down even further.
  • On power, the FG needs to unveil its energy plan. Insinuations about the President’s “body language” are simply not enough to provide electricity for the nation and its industries.
  • The NCC’s fine on MTN is a brave one, especially given the fact that all the telcos had been warned beforehand, and the others complied with the regulator’s demand. Not only is SIM registration the right thing to do, but it is heavily interwoven with the fight against terror groups and other criminal elements. MTN’s fragrant display of impunity needed strong action, and this sets an example for others to take note of.
  • The sacking of some executive and board members of Stanbic may provide an inkling into the abuse of foreign technical partnership agreements in Nigeria. Under the guise of same, many foreign companies have defrauded Nigeria and unleashed a wave of capital flight. A recent report by Premium Times Newspaper suggests that MTN is also guilty of same. However, questions must be asked of the FRC because they approved the reports which they now question. The FRC must show transparency in the manner it has gone about this task and must bring other companies to account who may be guilty of violating international financial reporting standards.
  • The Lagos state Commissioner of Police and the Governor have both failed in their duty to fashion out an effective strategy to deal with the current insecurity in the state. They are full of stories. We urge all Lagosians to exercise vigilance as they drive through the city, especially at night, and to be wary of the dark spots at Mile 2, Apongbon, Mile 12, Ojota, Iyana-Oworo, Costain, Apapa-Oshodi, and Iyana-Ipaja.
  • We believe that the EFCC chairman, Ibrahim Lamorde, should tender his resignation and focus on clearing his name. The order to probe him from the Federal Government and the National Assembly shows he has lost the confidence of the people.
  • We urge the Federal Government to intervene to halt the proliferation of light arms within the country. Weapons factories are not located only in the South East, as a picture which emerged this week of Boko Haram terrorists at a workshop suggested. This is a national problem. Illegal weapons factories aid in violent crimes and need to be brought under control.
  • We agree with General Gowon on the issue of a deadline for the military to end the Boko Haram insurgency. We have maintained that the FG does not need a deadline, but a comprehensive strategy, not just to win the war, but to win the peace, and ensure that even after Boko Haram are defeated militarily, a similar movement will not emerge in that troubled region in future.
  • It is unacceptable that Boko Haram still occupies two local governments in Borno State. This underscores the fact the February offensive was not sustained effectively. It also implies that the FG should not have tampered with the working structures of the military on the ground. However, we urge full support for the military, and urge the FG to provide them with all they need to get the job done.