15 Sep

The week ahead – Playing with dangerous animals is a bad idea

The Nigerian Army surrounded the Afaraukwu country home of the leader of the Indigenous People of Biafra, Nnamdi Kanu on 11 September, causing panic in the area as shop owners were forced to close their businesses almost immediately. The detachment of soldiers, arrived in ten armoured personnel carriers and seven Toyota Hilux vehicles and it was not immediately clear what their objective was. Kanu’s lawyer, Ifeanyi Ejiofor, accused the Nigerian government of placing the separatist agitator under house arrest, an assertion the military has denied. Earlier in the week, a clash between the Army and IPOB members left at least three people injured according to the military, and some casualties according to the group and multiple other sources.The Abia State Governor, Okezie Ikpeazu in response, declared a three-day curfew in Aba, the state’s commercial hub. Eventually, he announced a withdrawal of soldiers, an announcement which the army denied. In neighbouring Rivers, the police said thirty-two suspected IPOB members had been arrested following clashes with the Hausa community in Oyigbo Local Government Area. The state police commissioner, Zaki Ahmed confirmed the death of one police officer, adding that many others sustained injuries.

The Federal Government on Tuesday said it would provide insurance cover and agro-rangers for ranch operators to curb cases of cattle rustling as well as clashes between farmers and herdsmen. Vice President Yemi Osinbajo said this in Abuja at a national conference on the transformation of the livestock industry. Osinbajo represented at the event by the agriculture minister, Audu Ogbeh explained that 3,000 agro-rangers had been adequately trained to protect animals and livestock from rustlers. The vice president added that the country had about 19 million cows, a lower figure than its neighbours.

With staple harvests due in October as a result of improved rains in the North-East, a new report by Renaissance Capital forecasts improved food prices that will ease headline inflation from the last quarter of 2017. Although there are concerns about the impact of the floods in Benue, the research firm said with the rainy season taking its toll within and outside the northeast, staple harvests that begin as late as October in northern areas are expected to be greater than last year, according to the Famine Early Warning Systems Network. “This is attributed to increased access to inputs as well as strong production incentives for farmers due to very high staple prices. Near-term harvests imply we could see food inflation begin to soften from 4Q 17, which is positive for headline inflation. However, when one strips out prices of farm produce – which monetary policy has no control over – core inflation is slowing nicely. Core inflation fell below the policy rate of 14.0 percent in May. This opens the prospect of a rate cut, in our view”, the report added.

The CBN will start issuing electronic certificates for capital imported into the country, in a bid to improve its currency transfer process, it said on 11 September. The new certificate will replace a hard copy now issued when capital is imported, according to a circular from the CBN. The bank said the move would enhance transparency and efficient processing of foreign investment. Investors or companies are required by a 1995 law to get certificates within 24 hours declaring they have invested foreign currency in Nigeria. They must have the certificates to repatriate returns on those investments. Under the old rule, investors struggled to meet the one-day deadline to get the certificates, bankers say.

Suggestions

  • On one hand, despite its stated objectives, Operation Python Dance II is clearly a move designed against IPOB, which, in an already volatile South East Nigeria, is both provocative, and ill-thought out in a region that largely sees the Federal Government as an occupying and intimidating force. On another hand, the reaction from IPOB in Rivers state has handed the government every justification to send in even more troops. A police report says the IPOB members took away the slain policeman’s gun, injured two other policemen and burned their patrol vehicle. The culprits behind that lawlessness must be found and punished. On a larger scale however, the situation has to be de-escalated, and the Army must restrict themselves to rules of engagement and respect for human rights. The attack on journalists by soldiers, gives an insight into the mindset of Nigeria’s troops. The real problem in the region, as we have pointed out in the past, is economic. Nigeria must find a way to create jobs for thousands of idle young people otherwise the conditions may become more intense and run out of hand.
  • There is still a need for more detail on how the FG will provide the proposed insurance cover. For now, we will assume it will be provided through the Nigerian Agricultural Insurance Corporation (NAIC), which is publicly owned. There is also a need to know who will pay the premiums for the insurance. Having said that, it will be a huge task to protect the animals considering that a large proportion of cattle rearing in Nigeria is nomadic. This nomadic farming and encroachment into farmlands is one of the reasons for conflict between nomadic herdsmen and agrarian communities. The mode of protection will also need to be specified, especially if the agro-rangers will be armed.
  • This news on food inflation is good news. A combination of factors contribute to this. Headline inflation is slowing and while food inflation remains high, it is also slowing as well. The government’s programmes providing access to capital and incentives to farmers also contribute to this. Lastly, the resumption of farming in the North East with the improved peace means greater harvests generally. However, ongoing threats in the Middle Belt from both violence and flooding will mean the full gains will not be realised. These have to be dealt with.
  • CCIs were established to provide statutory evidence of capital inflow or investment into a Nigerian entity and it legitimises the repatriation of dividends and capital to the foreign investor. The certificates were issued in hard copy by commercial banks. However, there have been some hiccups particularly regarding the difficulty in obtaining the document within the stipulated timelines and also in providing evidence of the importation where the original copy had been lost or destroyed. In fact only last year, the Senate accused MTN of unlawfully repatriating $13.92 billion between 2006 and 2016 as it could not provide evidence in the form of certificates declaring it had invested foreign currency within the statutory 24 hour deadline – an accusation which the company vehemently denied. The introduction of e-CCIs is therefore a welcome development which can to a large extent put the prevailing issues to bed since the onus now shift to the bank to issue the certificates in a timely manner.