22 Apr

The week ahead – Nigeria needs a compass

The Acting General Officer Commanding Division 7 of the Nigeria Army, Victor Ezugwu, escaped a Boko Haram ambush this week. One soldier died and two others were injured in the ambush. The acting GOC continued his operational visit to Bama, while the wounded and the dead have been evacuated to Maiduguri.

In a related development, the DHQ has said the Boko Haram insurgents now give out cash loans to young entrepreneurs in order to lure them into their group. The Boko Haram insurgents who at their peak had deployed violent means to conscript members are now resorting to persuasive tactics of financial empowerment to convince targeted youth to fight on their side. This may be a counter strategy to the N500 billion that was set aside in the proposed 2016 Budget to empower jobless youths across the country. It was also learnt that the loan is largely programmed to fail, with such a default leaving the debtor no choice but to join the group.

The Western Naval Command of the Nigerian Navy this week announced that over the course of seven months, it has arrested 221 persons, seized 25 vessels and boats, and recovered 150,000 litres of stolen petrol. While the ships seized by the command were of various makes and sizes, the 221 suspects were arrested for various offences including pipeline vandalism, piracy and illegal bunkering of petroleum products.

The Organisation for Petroleum Exporting Countries (OPEC) plans to resume oil output-freeze talk after its members and non-OPEC countries failed to reach a deal last Sunday in Doha, Qatar. Iraq’s governor to OPEC, Falah Al-Amri said that discussions would resume in June at OPEC’s general meeting, to reach an agreement on freezing oil output. His statement came just days after politics thwarted a deal to cap production and curb the global glut. Negotiations among 16 oil producers on Sunday, ended without any accord after Saudi Arabia demanded all producers take part in a freeze.Saudi Arabia’s regional rival, Iran decided not to take part in the talks because it wants to restore exports which had been curbed by international sanctions. However, crude prices dropped on Monday after the failed talks and have since rebounded as oil workers in Kuwait continued a strike for a third day, cutting production. Iraq, OPEC’s largest producer after Saudi Arabia, supported an agreement reached in February between Saudi Arabia, Russia, Venezuela and Qatar to cap output at January levels. Nigeria, currently producing about 1.6 million barrels a day, is in favour of a freeze.

The Nigerian National Petroleum Corporation is in a standoff with energy giants, ExxonMobil and Royal Dutch Shell, over ownership of physical crude cargoes as the country seeks to shore up the budget. The dispute has delayed some of the country’s monthly oil export programmes and added to confusion over how much crude Nigeria has at its disposal to exchange for petrol, sell to fund the 2016 budget or use as debt collateral. Discrepancies between the NNPC and companies with production sharing contracts that entitle them to oil have always existed, but the crude price crash has increased the urgency to sort them out as both state and foreign firms feel the pinch.

The Federal Government recorded a fiscal deficit of N289.1 billion in its operations in the fourth quarter of 2015, according to the CBN. The fiscal deficit for the fourth quarter was N158.4 billion higher than the N130.7 billion recorded in the preceding quarter. The CBN said that the Federal Government could not generate enough revenue to finance its expenditure as a result of some economic challenges. For instance, it noted that during the fourth quarter of 2015, a total of N158.4 billion was generated as revenue by the government, while about N1.1 trillion was spent to finance various programmes. A breakdown of the total expenditure showed that the recurrent component accounted for 59.6 percent or N655 billion, while capital and statutory transfer components accounted for 31.8 percent or N349.8 billion and 8.6 percent or N94.6 billion, respectively.

Nigeria’s economy has taken another hit as a result of the foreign exchange crisis. The cost of air travel to destinations outside Nigeria may go up by as much as 30 percent as some foreign airlines relocate their ticketing and sales offices to Ghana. Leading the pack of airlines that have moved ticketing base out of Nigeria are United and Delta Airlines as well as British Airways and Virgin Atlantic. With this development intending travelers to the United States of America (USA) and the United Kingdom (UK) on these airlines now have to get their tickets through sales outlets in Ghana which the airlines consider a safe haven for their businesses. This comes as Spanish airline, Iberia, announced that it would suspend its Lagos-Madrid operation from May 12, 2016.

The Senate has suspended further debate on a Bill seeking the amendment of the law establishing the Code of Conduct Bureau (CCB) and Code of Conduct Tribunal (CCT). Deputy Senate President, Ike Ekweremadu, who presided over the session, said the senators would stand by their leader, Bukola Saraki, until his case was dispensed with in accordance with the Constitution and democratic practices. The move to amend the CCB and CCT law amidst the ongoing trial had attracted widespread criticism.

COUNSEL

  • Boko Haram started out with loan schemes for potential recruits as far back as 2005. Though the military is only highlighting the programme now, this has been a potent weapon which Boko Haram has used to amass local support and recruit thousands of members, largely due to poverty and ignorance. We urge the government at all levels in Nigeria to make real attempts towards tackling poverty by good governance, countering violent extremism and community policing.
  • The Navy is doing well in combating low level criminals in the Niger Delta. However, the high level criminality that involves connivance with constituted authorities remains unchallenged. Challenging this needs political will, and sincerity.
  • The dispute between the NNPC and oil majors is needless, especially coming at a time of economic uncertainty for Nigeria in terms of crude oil earnings. We counsel the NNPC to resolve this imbroglio and avoid unnecessary distractions that could create further dislocation for economic planning.
  • A fiscal deficit of N289.1 billion in the FG’s operations tells the story of the precarious condition of the Nigerian government. So far, the government has not shown any coherent approach towards resolving the current economic crises facing Nigeria. Asides the talk for blocking leakages and aggressive tax collection, we have not heard any serious policy pronouncement from the FG. This must change.
  • The story with the airlines is a reason why there must be a concerted economic policy from the government. The man on the street, not foreign airlines, or countries, is the loser in the current stagnant situation. The few moves made by the government so far have sadly, not helped. The results of the President’s visit to China are a good example. It’s been shrouded in secrecy, and varying announcements by various officials will do nothing to help confidence.
  • The Senate did well by suspending the CCT amendment Bill as a result of the public outcry. We have always maintained this Senate constitutes a serious impediment to the development of the country. We urge all Nigerian citizen to be conscious of the actions of their representatives and to develop the awareness to know they can sack them by way of recall, which though difficult, can be achieved.