21 Oct

The week ahead – Bold and responsible steps have to be taken

The CPI maintained its upward streak at the weekend, rising to 17.9 percent in September from 17.6 percent in the previous month. The NBS attributed the 0.24 percent rise in the headline number to increases in the food index as well as energy prices. Increases were recorded in all subdivisions, with, Communication and Restaurants and Hotels reported to have recorded the lowest rates of increase of the 12 divisions, growing by 5.6 percent and 9.6 percent respectively. According to the NBS, “Energy and energy-related prices continue to be the largest increases reflected in the core sub-index. In September, the core sub-index increased by 17.7 percent during the month, up by 0.5 percent points from rates recorded in August (17.2 per cent). During the month, the highest increases were seen in the Electricity, Liquid Fuel (kerosene), Solid Fuels, and Fuels and Lubricants for personal transport equipment groups.”

Nigeria could sign a cash-raising oil deal with India for $15 billion by the end of this year. This deal comes as Nigeria’s oil production is expected to rise by 22 percent to 2.2 million barrels per day when oil companies lift the force majeure on fields that were shut down as a result of militancy in the Niger Delta. The Minister of State for Petroleum, Ibe Kachikwu, and his team negotiated the $15 billion investment with terms to be agreed, where the Indian government would make an upfront payment to Nigeria for crude purchases. It stated it would be repaid on the basis of firm term crude contracts over some years and in consideration for Indian public sector (PSU) companies collaborating in the refining sector as well as exploration and production activities on a government-to-government basis by Indian PSU companies, long-term contracts for supply of crude to Indian PSU companies from Nigeria, and also possibilities of executing CGD and LPG infrastructure projects by Indian PSU companies in Nigeria.

A mob has attacked Fulani herdsmen in Nigeria’s restive middle-belt with an eyewitness saying Monday that fourteen people were “hacked and burnt” to death over the weekend. Kaduna state police spokesman, Aliyu Usman acknowledged the Godogodo attack and the riot and added that only two people had died in the unrest. Clashes over grazing rights have grown increasingly common between Fulani herders and farmers in the religiously mixed central states of the country in the face of a lack of political will to get a handle on the situation.

President Muhammadu Buhari has invited the Pan-Niger Delta Forum, established by Niger Delta leaders, to a meeting on October 29, in Abuja, for opening talks before commencing an acceptable dialogue with stakeholders and representatives of militant groups in the region. The Vanguard reported that President Buhari’s invitation was conveyed to the PNDF, led by Edwin Clark, over the weekend.

The federal government will only continue negotiations with Boko Haram if “they agree to involve international agencies like the Red Cross,” President Muhammadu Buhari has said. Buhari, who met with the president of the Red Cross, Peter Maurer, thanked the agency for its role in the discussions that led to the release of 21 of the kidnapped Chibok girls. Nigeria’s government is negotiating the release of another 83 of the Chibok schoolgirls taken in a mass abduction two-and-a-half years ago, but more than a hundred others appear unwilling to leave their Islamist extremist captors, a community leader said on Tuesday.

The Bauchi State Command of the Nigeria Police has rescued 100 hostages and arrested ‎88 suspected criminals in some forests. The Commissioner of Police, Zaki Mohammed Ahmed stated that those arrested included 59 suspected kidnappers and 14 armed robbery suspects.

Suggestions:

  • The continuing rise in headline inflation coupled with reducing purchasing power in the economy is worrying. The increases were across all the divisions, and the highest driver of these is energy, essential to power commerce. It also speaks to the current policy of managing the exchange rates to hover close to the rate used to calculate the PPRA’s pricing template for fuel. Clearly, this management is not sustainable and the exchange rate will eventually respond to the market which will force either an upward movement of energy costs causing a further upward spike in CPI, or a return of explicit fuel subsidies to keep energy costs down.
  • The deal with India looks very refreshing in terms of shoring up the FG’s dwindling foreign reserves, but we are also mindful of the dynamics that come with a Forward contract like this, because of price upticks and downsides. It is important that the details of this agreement be made public and debated appropriately to ensure that Nigeria is getting the best deal possible within the context of the current and future needs. It is also important to show a utilisation plan put against whatever payment plan is agreed to ensure that such funds realised go into infrastructure and other investments that will move the country further away from oil dependency.
  • The long-running battle between the nomadic Fulani herdsmen and farmers for land represents a major battleground often overlooked, but no less violent than the Boko Haram insurgency or the low-level Niger Delta uprising. SBM has consistently called for a coherent, comprehensive and coordinated national response to this threat, and have more than once highlighted the fact that states are already filling the vacuum left by the federal government’s lack of movement on this issue. The sight of ordinary people taking matters into their own hands has to represent a worrying escalation in this regard and we foresee more retributive attacks in the future – especially as gunmen believed to be Fulani herdsmen continue to wreak havoc on parts of the country – the latest being a weekend attack on Godogodo and neighbouring villages in Jama’a LGA, Kaduna State that claimed at least 20 lives.
  • The President’s invitation is a welcome step towards the restoration of peace and civility to the delta region and frankly, one that is long overdue. We expect that the meeting if it holds, will lead to the agreement of a set of base principles which will form the groundwork for wide-ranging and holistic negotiations with all disaffected and interested elements. The government has to work closely with the elders that comprise the cultural and political leadership of the region as symbolised in the PNDF in order to gain any credibility in a region where trust in its leaders is at an all-time low. A lot will be riding on it; the death of footballer Izu Joseph, allegedly at the hands of the military in Okaki, Ahoada West LGA, Rivers has stoked renewed distrust in a government that preaches peace and dialogue on the one hand and wages an unpopular military offensive on the other.
  • The government seems to be showing signs that it will utilise every means possible, peaceful and diplomatic, as well as military and confrontational to not only to ensure the release of the Chibok girls, but also reclaim territory from Boko Haram, a welcome development in many respects. However, it must take steps to be measured in its promises to what are still terrorists who have potentially committed war crimes, as well as ensure that military officers and soldiers still act in a responsible manner – reports having emerged this week of disaffection in the military’s ranks over the government’s diplomatic overtures to the Islamist group. We are concerned by reports that dozens of the girls may have been indoctrinated and does not wish to return to Chibok. We are optimistic the second batch of the release would provide more intelligence about the condition of the remaining girls.
  • Bauchi is the location of the Balmo forest, which hosts a wide range of criminals including Boko Haram members. The current attempt by the police to rid the state of crime is quite commendable and should be supported to get the job done. Again, we call on both the NSA and the Interior minister to collaborate on providing and implementing a comprehensive internal security strategy to tackle crimes such as kidnapping.