02 Jun

The week ahead – We need relationship counselling

The presidency and lawmakers are still in talks over the 2017 budget nearly three weeks after the spending plans were passed by the Senate. Both chambers of parliament agreed to a bigger budget than the ₦7.298 trillion draft spending plan submitted by President Muhammadu Buhari in December. “There are ongoing consultations between the executive and the legislature over the budget. Consultations have not been concluded,” said Ita Enang, senior special assistant to the president on Senate matters, without giving details. The Senate passed the budget on May 11. Last year’s budget, which was passed in May 2016, was delayed for months due to disagreements between lawmakers and the presidency over spending plans which cut the supply of government money and deepened the economic crisis.

Acting President Yemi Osinbajo has signed two new laws that would help facilitate access to more affordable credit facilities for businesses in the country. The acts include the Secured Transactions in Movable Assets Act, 2017 (otherwise known a Collateral Registry Act) and the Credit Reporting Act, 2017. The new laws are part of the FG’s reforms aimed at easing business operations in the country. While the Collateral Registry Act ensures that Micro, Small and Medium Enterprises can register their movable assets and use same as collateral for accessing loans, the Credit Reporting Act provides for credit information sharing between Credit Bureaus and lenders and other institutions that provide services on credit.

The Senate has halted a concession agreement with the local division of Italian oil company Eni to repair, operate and maintain Port Harcourt refinery, saying the deal lacks transparency. Nigeria has been seeking investment in its energy sector to reduce reliance on imported oil products that consume a large part of the country’s foreign currency reserves. It has a refining capacity on paper of 445,000 barrels per day, but imports most of its gasoline needs because its refineries have been shut or running at reduced capacity for years due to neglect. Eni said in May it was in talks to work with Nigerian energy company Oando on the deal as part of an effort to increase refining levels. Members of the Senate voted to back the motion brought by Senator Sabo Mohammed. The motion was titled: “Non-transparent transaction relating to the planned concession of the Port Harcourt refinery to Agip and Oando by the Ministry of Petroleum Resources.” Agip is a subsidiary of Eni. The Senate will now set up an ad hoc committee to investigate the concession award.

Cross River governor, Ben Ayade, on 31 May hastily convened a meeting with representatives of the Nigerian Navy and police to address a deadly clash between both security agencies which left at least three police officers dead the previous day. Two police officers and a naval officer who were injured in the clash are recuperating at separate medical facilities in Calabar, the state capital where the incident occurred, according to Premium Times. The clash was sparked by a disagreement between a police traffic officer and a naval officer at a traffic stop in the Akim neighbourhood of downtown Calabar, around 4:00 p.m. By 8:00 p.m, it had developed into a deadly riot, with suspected naval officers attacking a police divisional headquarters, killing three and injuring others after setting the facility alight. A naval officer sustained gunshot wounds from suspected police fire. The police said that no detainees escaped during the melee. At the emergency meeting, Ayade confirmed that the violence had ended by Wednesday morning, condoled with both agencies, and promised adequate compensation for victims. Salihu Jubril, Commander of NNS Victory, docked in Calabar Port, expressed regret over the incident and vowed tough sanctions on the erring officers. Hafiz Inuwa, the state police commissioner said the development, while unfortunate, would not affect the Navy-Police relationship.

Suggestions

  • The postponement of the budget signing is perhaps the most powerful signal from the Federal Government that 2017 will go the way of 2016 and not much will get done in the country. It is totally unacceptable that in June, the last month of the first half of the year, the budget has yet to be signed into law. Even more jarring is the unnecessary drama around whether the Acting President, who is constitutionally empowered to do so, should sign the budget into law. We urge all the actors in this horror movie to respect the rule of law and show the necessary will to pass the budget.
  • One of the indicators that Nigeria consistently under-performs on Ease of Doing Business rankings is on access to credit. According to the Centre for International Private Enterprise, and the International Real Property Foundation’s International Property Markets Scorecard, the country is classed overall as ‘Weak’ on access to credit. The individual scores are even more damning. On ease of obtaining a bank loan, Nigeria ranks 121st out of 144 countries; on ease of finding venture capital, the country is 72nd; on freedom to raise capital outside the banking system, it is classed as ‘Weak’; on the extent of public credit registry coverage, only 0.1% of Nigerian adults are covered. These are the awful numbers the government seeks to overturn with these new laws. The devil as always with government-led initiatives is in the detail and implementation. Nevertheless, it has taken an important first step.
  • We cannot fault the Senate’s position on the Port Harcourt refinery. Dr. Kachikwu had said a week before the announcement of the deal that details of who was selected should be expected in September, after due process was followed. It was therefore totally unexpected when the deal was announced as a fait accompli a week later. While we think a private sector arrangement such the one announced is the correct approach to take for the refineries, we agree with the senate that such deals must be transparent and follow due process. Finally, we reiterate that better coordination is expected between the APC executive and the APC dominated senate. It is a failure on both parts that agenda such as this cannot be driven in sync.
  • We have in the past shone a spotlight on the generally poor state of inter-agency cooperation among Nigeria’s security agencies. An outright confrontation however, is a rare occurrence, mostly dating back to the years of military rule where mutual suspicion between the various arms of the military and paramilitary organisations was actively cultivated by a succession of military leaders in order to ensure absolute loyalty. It does not help that Akim, with its reputation for intra-community clashes, crime and the occasional ritual beheadings, ranks as one of the most violent neighbourhoods in one of Nigeria’s premier tourist destinations. The state government’s quick action is to be commended, however, keeping the peace, preventing a recurrence of this week’s incident and mending a sullied professional relationship should be the imperatives going forward.