06 May

The week ahead – Niger Delta militants are back in the news

The Defence authorities have confirmed an attack on a major platform of Chevron Nigeria Limited by suspected militants in the Delta axis of the Niger Delta. The Navy’s Spokesman, Commodore Chris Ezekobe, explained that the attack took place some four miles off the Escravos River. According to him, the platform that was partially damaged was a collection point for crude oil and gas to the main Chevron facility in the area. Ezekobe said that the Forward Operation Base of the Navy had already dispatched vessels to protect oil platforms in the area and the facility of the Shell Petroleum Development Company that was earlier blown up by a new militant group, the Niger Delta Avengers in the Forcados area of Delta State. A Chevron source informed SBM Intelligence that all of the company’s offshore (not deepwater) production has been shut in by the attack, affecting approximately 150,000 barrels of production per day and 600 million standard cubic feet of gas per day.

Meanwhile, the bodies of three Navy servicmen killed by suspected militants on Tuesday at a wellhead in Nembe Creek in Nembe Local Government Area of Bayelsa State have been recovered. Four naval servicemen attached to an oil servicing company, ICEO, disappeared on Tuesday following a surprise attack by suspected militants at the Nembe creeks. A senior official of ICEO and his wife were among those killed by the militants.

The Nigerian military has in a final onslaught against the Boko Haram, deployed ground and aerial personnel deep inside Sambisa forest to clear the remnants of the terrorists’ enclave and rescue all hostages. The Chief of Defence Staff, Gen. Abayomi Olonisakin, announced this on Monday just as the Nigerian Army announced the arrest of the alleged killers of Major-General Mohammed Shuwa who was assassinated in 2012 by suspected Boko Haram members. The CDS, who was accompanied by the Chief of Army Staff, Lt-Gen. Tukur Buratai, and Chief of Air Staff, Air Marshal Sadique Abubakar, said the special operation, which has taken off, is code named ‘Operation Crackdown’.

Gunmen, suspected to be Fulani herdsmen, on Sunday night, assassinated the District Head of Fadan Karshi in Sanga Local Government Area, Kaduna State. The murdered District Head, Mr. Bala Madaki, 66, was killed alongside his nephew, Emmanuel Tanko. According to a community leader in the area, Pastor Mike Makarfi, the violence took place around 10:30pm Sunday night when the suspected gun men, stormed his compound and shot them to death. It has been reported that Fadan Karshi is deserted. Shops and service centres are shut. People are either staying indoors or are leaving town.

A hundred and five students of the College of Education (Technical), Gusau, Zamfara State, on Tuesday night at Bida in Niger State escaped being abducted by gunmen in police uniform. Three of the students were reportedly raped by the bandits while many of them, including their teachers sustained varying degrees of injuries. The students were riding in two buses on an educational excursion from Gusau to the Kainji Dam and were accompanied by four staff of the institution. There was no security escort with them when they ran into a gang of armed men in police uniform at about 1 in the morning.

The Senate has agreed to begin a process for the enactment of a law that would prescribe capital punishment for kidnappers across the country. The Senate also asked state governments to enact laws that would prosecute kidnappers and other crime-related offences in their jurisdiction and recommended that the Inspector General of Police and Director-General of the Department of State Services, DSS, in particular as well as other security agencies be encouraged to do more. These resolutions of the Senate were sequel to the consideration of a report of the Joint Committee on Police Affairs, National Security and Intelligence in respect of a motion on the unfortunate recurrence of kidnapping and hostage-taking in Nigeria, entitled, “A National Wake-Up Call.”

Oil, gas and power firms owe banks in the country about N3.931 trillion as at the end of December 2015, according to latest data released by the Central Bank of Nigeria. The CBN, in its Quarterly Statistical Bulletin for the Fourth Quarter, 2015, released recently, said the indebtedness represented a decline of 1.36 percent or N54 billion against N3.985 trillion recorded at the end of November 2015. A breakdown of the commercial banks’ sectoral credit allocation showed that the downstream, natural gas and crude oil refining segments owed banks up to N2.273 trillion as at year end. This was slightly higher than the N2.264 trillion recorded in November, while the upstream and oil and gas services sector owed N1.156 trillion against N1.192 trillion month on month. In the power sector, the banks are owed N340.31 billion by Independent Power Plants, and power generation companies, while power transmission and distribution companies owed N162.44 billion against N168.1 billion in the corresponding period. The report further said that the exposure of the banking sector to energy firms as at year end, increased by 10.02 percent or N358 billion in comparison to end-November’s N3.573 trillion.

Domestic investors continued to dominate transactions at the Nigerian Stock Exchange. According to the data for the month of March, domestic investors outperformed foreign investors by 28.48 percent. Although the total transactions in the month of March 2016 decreased by 17.87 percent from N117.27 billion recorded in February 2016 to N96.31 billon, domestic investors dominated the performance. Comparatively, the N96.31 billion recorded in 2016 is 47.66 percent lower than the N184.02 billion recorded in 2015. The bourse recorded N201.37 billion transactions. However, in the month of March 2016, domestic investors accounted for N61.87 billion, while foreign investors recorded N34.44 billion. But, monthly foreign outflows outpaced inflows, which was consistent with the same period in 2015. Foreign outflows decreased by 40.20 percent from N31.84 billion in February 2016 to N19.04 billion while foreign inflows increased by 40.77 percent from N10.94 billion in February 2016 to N15.40 billion in March 2016.

COUNSEL

  • While the situation in the Delta is still developing, it is clear that our security agencies are on the back foot. This morning, an SBM source informed us that a gas supply line to the Nigerian Gas Company was also blown up yesterday night. We repeat our previous advice that rather than approach every situation with a hammer, the FG should make an effort to give the communities on the ground a sense of ownership of the oil infrastructure, and integrate them into the intelligence gathering, and monitoring campaign. This must not be seen as an opportunity to make a few members of the community rich at the expense of the many.
  • We urge the Nigerian government to provide the military with all that is necessary to get rid of the Boko Haram terrorists in the Sambisa forest. Cases of equipment failure are still being reported, and without efficient logistics, the job won’t be successful. We commend the military for the ongoing counter insurgency operations.
  • We note the recent spate of kidnappings and assassinations in Kaduna and urge Governor El-Rufai to take advantage of the numerous military installations there. we also urge him to liaise with Kaduna’s representatives in the National Assembly, so as to amend existing laws and give state governments more control over the internal security apparatus in their states. Isolated villages need to be protected, and this, we are convinced, can only be done effectively by the states.
  • The authorities of the College of Education (Technical) Gusau, in Zamfara must be held accountable for the incident that happened to their students. Given the frankly appalling security situation in our country, they are culpable for not making adequate arrangements for a security escort. They are also culpable for the timing of the (mis)adventure which ran into the middle of the night.
  • We align our thoughts with the Senate on the proposal for the severe punishment of kidnappers, and urge for a quick passage into law and also for provision and funding of the police effectively.
  • The rising indebtedness of companies to banks is quite worrisome considering that many of these loans are not performing. The CBN should exercise round the clock due diligence on the banks in order not experience a systemic collapse of the sector as a result of these huge facilities. On their part, the banks share in the blame for focusing almost exclusively on the energy sector. The time has come for them to diversify their portfolios.
  • The reports from the NSE have validated those of the NBS regarding the sharp decline in foreign inflows to Nigeria. This is bothersome for the Buhari government. Though the domestic investment flows are good, the current foreign exchange crisis threatens the overall macro-economic outlook. An economic policy is desperately needed.