03 Jun

The week ahead – It’s all about the delta

President Muhammadu Buhari on Thursday backed off a proposed trip to Rivers State for the kick-off of the cleanup of Ogoni, delegating Vice President Yemi Osinbajo for the exercise. The President cancelled the event even after his advanced team had already arrived Ogoni. The Presidency gave no reason for the last-minute cancellation of the trip, which was the second time in less than two weeks that Buhari would cancel a scheduled event outside Abuja. On the night before his scheduled visit to Lagos State of May 23, the President suspended his visit citing “scheduling difficulties” as reason. There is speculation that the reason for the cancellation of the trip by the President was because of ill-health, however, a security source informed SBM that the President’s visit was aborted because of a credible threat by militants in the region to cause damage to lives and property during the visit.

The Niger Delta Avengers attacked another pipeline belonging to Chevron midweek. In a tweet, the group claimed that it had blown up the pipeline connected to Chevron Oil Well RMP 23 and 24. The group claimed to have achieved this despite the heavy presence of the military in the area. In its reaction, the Nigerian Army said that the use of force will, for now, be the only available option until leaders of the militant groups such as the Niger Delta Avengers are apprehended. This followed an outcry that accompanied military operations in Gbaramatu, Delta state, where the army is currently in search of members of the NDA. Another attack in the region during the week, on a military house boat near Omadino, an Itsekiri community in Warri South, Delta state, killed seven people, including two soldiers. This escalation marked the first time in this new uprising that people were killed. A new group, calling itself Joint Niger Delta Liberation Force, claimed responsibility for the attack.

Eighty-eight members of the Movement for the Actualisation of Sovereign State of Biafra (MASSOB) who were arrested in Abakaliki, Ebonyi State, during the “Biafra day” celebration early this week were granted bail. The arrests happened on the same day as an alleged massacre of members of IPOB and MASSOB by security agents in Onitsha, Anambra State. The 82nd Division of the Nigerian Army has justified their attack on the group as an act of self-defence and a “needed” protection of the strategic Niger Bridge. Also on Monday, across the Niger Bridge in Asaba, Delta State, pro-Biafra demonstrators killed two policemen, and made away with a Kalashnikov belonging to the police. Later on in the week, militant groups in the Niger Delta lent their support to the pro-Biafra agitators, giving the Federal Government until today to release the bodies of ten people killed in Onitsha on Monday.

Two persons were killed in Ninte, in Jema’a local government area, Kaduna State by herdsmen on Tuesday. The attack happened in the early hours when the assailants stormed the village and started shooting sporadically. Most of the villagers had deserted to the neighbouring Zankan village for safety before security personnel arrived.

During the week, banking stocks saw their biggest drop in forty-two months as investors showed their displeasure at the lack of clarity from policymakers since they announced a change in foreign-exchange policy more than a week ago. The Stock Exchange Banking 10 Index fell 13 percent, the biggest retreat since November 2012 on a closing basis, extending a 6.6 percent slump Tuesday. Guaranty Trust Bank, the country’s biggest lender by market value, declined 9.6 percent, while Zenith Bank dropped 8.9 percent. UBA retreated 9.5 percent. The NSE All Share Index fell 2.75 percent to 26,678.01 after it rose the highest last week for the first time in five months reached on May 27 after the CBN announced plans for a more flexible currency regime. This happened as job cuts continued in the banks. Following last week’s job cuts by Diamond Bank, Ecobank fired over 1,000 employees this week, and First Bank is set to follow as it has announced that it would reduce its workforce by “about 1,000.”

Suggestions

  • The launch of the Ogoniland clean up by the President, is to be applauded. Unfortunately, the President failed to appear in person, which would have been hugely symbolic, bearing in mind that he was the person who made the promise to implement the UNEP report during his campaign visit to Ogoni. It must be pointed out that the President’s absence does not in any way belittle the significance of the ceremony as some people would like to point out. What is important to the Ogoni people is that a step has been taken on a journey that is expected to take about three decades. Whoever cuts the tape, does not matter.
  • The major economic implication of the rising insurgency in the Niger Delta is that oil production, officially down to 1.1 million barrels per day will slump further, affecting other sectors as well. We are concerned about the already epileptic power sector, and the resultant hike in the prices of goods and services. Gas production, and export may also be affected, leading to Nigeria reneging on already signed agreements, and aiding the perception that Nigeria cannot honour agreements. However, we worry about the bravado emanating from the military. We again warn that this is a war that cannot be won. Nigeria must find a way to settle this option at the negotiating table, and this can only be done with genuine representatives of the communities in the Delta, not by alienating them with heavy handed tactics.
  • Some of the so-called pro-Biafra agitators are Nigerians pointing out the structural incongruities stalling the proper functioning of the Nigerian state. If they are not granted proper audience to air their grievances, they might soonest be forced into the arms of extremists such as IPOB, and start attacks on the country’s public facilities, using military weapons. Given the spread of the Igbo people across the country, an uptick in protests, and the resultant backlash will hamper business activities all over Nigeria. It is important that the more moderate protesters are engaged rather than antagonised, as research carried out by SBM Intelligence earlier this year suggests that an economic improvement will push the extremists to the fringes, where they belong.
  • We are coming to a point where drastic measures may have to be taken by the government to put an end to the activities of these gunmen who have been identified as Fulani herdsmen. People in affected communities are coming to a point where they will take laws into their hands by carrying out reprisal attacks on any Fulani herdsmen seen, one such incident happened a few weeks ago in Nasarawa State. The ongoing crisis is a big part of the drop in agricultural output, and if the security challenge is left unattended to, the country at some point be hit by shortage supply of beef for consumption and other use.
  • Finally, with more layoffs looming in the banking industry, the repercussions will be widespread. The underlying is that banks are struggling and the future does not look bright. Lending to the real sector will shrink and more graduates will be thrown to the streets. These challenges were forecast months ago by the monetary policy committee but the government took no meaningful steps to avoid the situation. It needs to act now.