27 Jan

The week ahead – We need a ladder not a spade

Nigeria has endured a week of rumours surrounding the health of President Muhammadu Buhari. “News” of his purported death in London had gone viral on social media on January 20, forcing the President’s media aide, Garba Shehu, to deny the speculation on his Twitter handle. Transport minister, Rotimi Amaechi, told Arise TV on January 23 that “the president stood for one hour and if he is not fit he would have collapsed. I do not think we should discuss president’s medical history. The rumour about his death or he is alive, is all nonsense.” Information minister, Lai Mohammed, on his part said the government was investigating and will prosecute the authors of the rumours. “The source/sources of the fabricated messages are already being investigated and the authors should prepare to face the consequences of their actions,’’ Mohammed said on January 25.

Yesterday soldiers took over security at the main gate of the National Assembly complex in Abuja following a clash between the police and followers of the leader of the Islamic Movement of Nigeria, Sheikh Ibraheem El-Zakzaky. The media reported that the police blocked the roads leading to the National Assembly through the Federal Secretariat buildings to prevent the protesters from gaining entrance, while personnel from the Presidential Guard were drafted in to provide cover. During the fracas that ensued, some policemen and journalists were beaten up while a photojournalist had his camera impounded. The Nigerian Tribune quoted an unnamed senior police officer as telling reporters that they were under strict instructions not to allow the sect to carry out any protest close to the National Assembly. The IMN, the umbrella body of Nigerian Shi’ite Muslims were protesting the continued detention of their leader. El-Zakzaky and his wife were arrested by the military on December 14, 2015, after a clash between the movement and officers of the Nigerian army in Kaduna left at least 347 members of the group dead. He has not been formally charged with any offence. A Federal High Court had on December 2, 2016 ordered the government to release El-Zakzaky within 45 days, an ultimatum which lapsed last week without a response from the government.

President Muhammadu Buhari has written the Senate in response to the lawmakers’ indictment of the Secretary to the Government of the Federation, Babachir Lawal, and consequent calls for his removal, and prosecution. Buhari, in his letter, defended Lawal and gave reasons he could not act as demanded by the Senate. The Senate had in December last year asked the President to suspend Lawal and ensure his prosecution over an alleged breach of federal laws in handling contracts awarded by the Presidential Initiative for the North East. The Senate’s call followed the interim report of its ad-hoc committee on “mounting humanitarian crisis in the North East” led by Shehu Sani which indicted Lawal for receiving ₦200 million contract to clear “invasive plant species” in Yobe State through a company, Rholavision Nigeria Limited. The Senate said Lawal had remained a director of the company till September 2016, over a year after his appointment, in breach of the code of conduct for public officials. Lawal denied the allegations, dismissed the Senate as saying “balderdash”, and accused the lawmakers of attempting “to bring him him down at all cost”.

General Electric Co has proposed investing in Nigeria’s oil refineries, potentially convening a consortium of companies to improve capacity at the run-down facilities. GE’s plan and similar promises from companies like Italy’s Eni to work to rehabilitate the country’s three oil refineries could help the government as it tries to reduce costly imported oil products.The work was raised during a meeting with the Nigerian National Petroleum Corporation, a GE spokeswoman told Reuters on January 24. “We propose that work commences either with the Warri or Port Harcourt refinery as a pilot, as we set a target to improve the refinery capacity before the end of 2017,” GE told the NNPC, according to a statement from the state oil firm. The Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu has said that Chevron and Total were also interested in working on the refineries.

Fitch Ratings revised the outlook on Nigeria to negative from stable over concerns that a lack of foreign exchange will hamper the economy and affirmed the west African nation’s rating at B+, four steps below investment grade. While Nigeria’s economy will probably grow at 1.5 percent this year, after contracting by an estimated 1.5 percent in 2016, the non-oil sector will continue to be constrained by foreign currency shortages, the ratings agency said in an e-mailed statement on Wednesday. “Access to foreign exchange will remain severely restricted until the Central Bank of Nigeria can establish the credibility of the interbank foreign exchange market and bring down the spread between the official rate and the parallel market rates,” Fitch said. While government debt remains low at 17 percent of GDP, the shortage of state revenues “poses a risk to debt sustainability,” according to Fitch. The government’s debt stood at 281 percent of revenue as of end 2016, and while 77 percent of that is domestic, foreign currency borrowings are increasing, the agency said.

Suggestions

  • We have been here before. For three years between 2007 and 2010, the health of President Umaru Yar’Adua dominated headlines in Nigeria, and created a lot of uncertainty, especially after it became clear to all that there was a lot of daedal politics going on behind the scenes. One of the newspaper headlines this week, Information Minister, Lai Mohammed telling Nigerians that President Buhari is “hale and hearty”, is an exact copy – minus the name of course – of a newspaper headline from May 2008. Whole cargoes of Nigerian functionaries boarded flights to a foreign country to “greet” the President then, whole cargoes of Nigerian functionaries are boarding flights to “greet” the President now. This is utterly absurd. Nigeria was not in a debilitating recession under Umaru Yar’Adua. It is important that President Buhari allays fears about his health. His long overdue second media chat, will be a prudent way to do that. It is the least he can do, to prevent a totally avoidable crisis.
  • In many respects on the treatment of IMN, we are watching a replay of the Boko Haram DVD. Religious sect allowed to grow big? Check. Leaders of sect courted by establishment figures? Check. Sect begins to act as “state within a state”? Check. The Nigerian state attempts to use brutal force to stop the sect? Check. Nigerian state botches the job of suppressing the sect? Check. Following this trajectory, what comes next is not too difficult to project. Factions of the Islamic Movement of Nigeria will at some point lose patience with the legal approach, and explore other ways of driving home their point. The trade-off, which many do not seem to be asking is, can Nigeria afford for that to happen?
  • Away from Shehu Sani’s sure-to-be-famous quote about Buhari using deodorants to tackle graft at the highest levels in the Presidency while using insecticides to fight corruption everywhere else, Sani’s withering comments speak to a larger perception deficit with the administration’s clean government drive – it appears to disproportionately target either members of the opposition or political adversaries of the President’s circle within his own party. The government has to address that deficit and recognise that the only way to truly get Nigerians onside in its anti-corruption crusade is to guarantee the democratic principle of sameness before the law and institutions of the state. Clapbacks to the Senate, refusing to cooperate with the legislature’s investigative organs, and character references from the President’s desk just won’t cut it. Here’s another already famous quote as a guide: Justice must not only be done, it must be seen to be done.
  • On the refineries, the government’s hands has been directly involved in too many pies as far as economic matters are concerned and its shrinking pockets, unforgiving market realities and plain economic sense have put the writing firmly on the wall: that era is over. Nowhere is this illustration more apt than in the track record of Nigeria’s refineries. Their problems, are well documented; their track record, spotty; and the political hangover from their demise, toxic. Like a mother watching her child go off to the university, it is time to let go. Nigeria’s energy security and the harassed pockets of millions of Nigerians are riding on Abuja and the NNPC’s next move.
  • The Fitch downgrade is a sad but not-unexpected development. More worrying is that the government’s economic team appears to be unsure what steps to take to move the economy forward. In the short term, the Fitch downgrade would make borrowing – a cornerstone of the government’s budget strategy more expensive as it will dampen foreign investor appetite in Nigerian debt and continue a rise in yields for those who do buy government paper. Furthermore, it will mean more pressure on local banks debt and their balance sheets and local manufacturers and importers who will continue to labour under an unkind forex environment. Since there’ll be little shift in the policies which got us in this mess in the first place, in the first two quarters of 2017, things will get worse before they get better. Analysts expectations are that the rise in revenues from improved oil production and prices will be enough to halt the negative growth for the full year, however, failure to take further initiatives may hamper Nigeria’s efforts to climb out of this recession.