The naira finally strengthened against the dollar, notching up its first gain less than a week after starting to trade without a peg, as the Central Bank of Nigeria seeks to stabilise the market by selling dollars. The naira rose 0.7 percent to ₦282.5 per dollar in Lagos on Wednesday, after dropping as much as 0.5 percent during the week. The CBN had intervened in the market by selling foreign exchange since it ended the currency’s 16-month fix of ₦197-₦199 per dollar on June 20. Stocks have been rising for much of the week, advancing to their highest close since October 21, as local investors buy stocks anticipating a return by foreigners, who fled when capital controls were imposed to defend the naira’s peg.
According to finance minister, Kemi Adeosun, militant activities in the Niger Delta region cut government revenue by ₦16.2 billion in May. The Federal Accounts Allocation Committee on 22 June, distributed a total sum of ₦305.12 billion to the three tiers of government as statutory allocation for the month of May. Despite expected increases in non-oil revenue, the agency expects overall general government revenue to drop to just 5.5% of GDP, from an average of 12% in 2011-15. The move to a Treasury Single Account and the implementation of information systems that have reduced the number of ghost workers are seen as important reforms that may positively affect government finances in the mid to long term.
The Niger Delta Avengers have denied any intention of reaching a ceasefire with the government. Speaking via their Twitter account, the militant group insisted that it never had an agreement on a ceasefire with the Nigeria Government. In a related development, Operation Pulo Shield, a military joint force whose aim was to curb security threats in the Niger Delta region has been discontinued and immediately replaced with Operation Delta Safe. The move was made to streamline the Joint Task Force in order to improve its ability to deliver services and effectively contain security threats in the region.
Meanwhile, a new militant group in Imo state styled the Niger Delta Red Squad has claimed responsibility for blowing up two Shell pipelines in the Asa/Awarra axis of Ohaji Egbema Council Area in the state. The group has also threatened to attack major oil pipelines in Oguta Council Area and ultimately shutdown all oil wells in the state. And in a sign that the security situation may be deteriorating in other parts of the South-South geopolitical region, at least two Nigerians and five foreigners were kidnapped at the Idundu axis of the Calabar-Oban road in Cross River State. The kidnapped men were in the employ of Australian-based MacMahon Construction Company, a major contracting firms to Lafarge Holcim, owners of UniCem, a major employer in the state.
The security challenges in the North are not going away. A few days after Benue Governor Samuel Ortom met with stakeholders from Katsina-Ala, Ukum and Logo local government areas to deliberate on ways to tackle the incessant Fulani attacks, gunmen suspected to be Fulani herdsmen raided four villages and killed 13 persons in Logo and Ukum local government areas. This was the third attack in that part of Benue since the weekend of 18-19 June, killing a total of 59 persons. The Benue State Police Command’s spokesman, ASP Moses Yamu, confirmed that four people were killed in the Vaase community of Ukum while three corpses were recovered in Anyiin and one in Uzer, both in Logo LGA of the state.
Officials of the Department of State Services have arrested a former Chief of Army Staff, Lt. General Azubuike Ihejirika. Ihejirika was arrested over his alleged sponsorship of the Independent People of Biafra agitators. Meanwhile, IPOB has challenged the Federal Government and its security agencies to show evidence of violence or crimes committed by IPOB members justifying the gruesome killings of its members and sympathisers who had shown them solidarity by coming out to watch, each time they were marching on the streets.
The firepower of Operation Lafiya Dole by the Multi-National Joint Task Force for the Lake Chad Basin Commission, comprising troops from Nigeria and its North East neighbours has caused massive movement of Boko Haram terrorists escaping from Sambisa forest into northern Borno State’s border with Niger Republic and the Lake Chad islands.
- We reiterate our position that the new foreign exchange policy is a step in the right direction. However, it is only a step and must be backed up with appropriate fiscal policy support from the Ministry of Finance. It is almost certain now that Nigeria will enter a recession formally and it will take a sustained fiscal policy and maintaining the market driven monetary policy for Nigeria to turn the corner. The CBN’s dramatic market intervention to clear the backlog of foreign exchange demand was also necessary. It should allow the market in the coming weeks to help investor appetite to put their money in the Nigerian economy in part by sticking to its word and allowing the markets determine a fair value for the naira. On fiscal policy, the government should continue to implement reforms that aim at cutting down the size of the public sector and ramping up productivity in the economy. It should not be deterred by the range and pangs of discontent that these reforms will inevitably cause as it looks to pivot the economy away from the vagaries of a volatile crude market. We also call for other artificial price pegs on essential commodities, especially fuel, to be discontinued.
- It is clear from the stated intentions of the Niger Delta Avengers that it may not necessarily seek rapprochement with the government in Abuja. A comprehensive and detailed economic and security plan should be drawn up for the Niger Delta region as the routine interruptions to the nation’s oil production are negatively impacting the overall macroeconomic during a time of increasing uncertainty. The government should consider all necessary measures – including military – in neutralising this new militant threat. This should however, be conducted in a responsible and measured manner, sensitive to the unique challenges of residents of the region who harbour historic and valid grievances with the central government.
- The security agencies are clearly at a loss when it comes to addressing the incidences of settler/herdsmen violence that has till date occurred in at least nine Nigerian states this year. The federal and state governments need to address what is clearly rising to be one of the nation’s emerging threats at the highest level possible. A comprehensive, nationwide security plan needs to be created to address this issue in a holistic manner as against the patchwork of politically motivated statements and half measures by affected states that characterises the current approach. The Benue State government is doing through legal means what the Ekiti governor did through cruder methods by forwarding a bill to its State Assembly to outlaw grazing in the state. It remains to be seen how moves like this will increase or douse tensions. The federal government, which has a remit of all security agencies, must either step up, or drive reforms to localise law enforcement.
- The handling of the rising agitation from IPOB for Biafra has done nothing to calm the nerves in the region. We counsel that while the Nigerian state is within its right to question Ihejirika on involvement with IPOB, it must do so within the limits of the law and must be seen to be fair in order to avoid further fuelling sentiments of alienating the region.
- As long as Niger’s Diffa region remains a haven that Boko Haram can fall to, the insurgency will never be fully defeated. The region serves as both a retreat point and a forward base from which it launches attacks. Securing and pacifying the region must become a top priority of the MNJTF going forward.