24 Nov

The week ahead – It is chaotic

Nigeria’s economy grew 1.4 per cent year-on-year in the third quarter, the statistics office said on Monday, extending its slow climb out of its first recession in a generation. Africa’s largest economy returned to growth in the second quarter of 2017 but the recovery has been fragile due to depressed oil revenues and a shortage of hard currency. The NBS said oil production stood at 2.03 million barrels per day in the third quarter. Agriculture grew by 3.06 per cent in Q3 compared with 3.01 per cent recorded in Q2; Q2 GDP growth was revised to 0.72 per cent from 0.55 following oil output revisions by the Nigerian National Petroleum Corporation; Q/q real GDP growth was 8.97 per cent. Telecommunications & information services contracted further by 5.68 per cent in Q3 2017 after shrinking 1.92 per cent in Q2.

At least 16 companies have withdrawn their operations from the Onne Free Trade Zone following a controversial decision by the Oil and Gas Free Zones Authority (OGFZA) to revoke the expatriate resident permits of a few companies. The federal government, through the Nigeria Immigration Service and the OGFZA, had revoked permits of staff of six companies including Intels Nigeria (co-founded by former Vice-President Atiku Abubakar), Prodeco International, West Africa Machinery Services, Net Global System International, MGM Logistics Solutions and Oriean Investment Ltd. The FG says the revocation of residence permits of expatriate workers in Integrated Logistic Facilities & Services (Intels) was not politically motivated. OGFZA managing director, Umana Umana said the affected companies failed in their requirements to renew the 2017 operational license, as stipulated by OGFZA laws.

The Chief Justice of Nigeria, Justice Walter Onnoghen has said the independence of the judiciary can only be sustained and guaranteed when there is no interference by the other arms of government, in what observers see as a subtle dig at the Muhammadu Buhari administration. Speaking at the All Nigerian Judges’ conference organised by the National Judicial Institute in Abuja, he said, closely linked to the independence of the judiciary was the need for governments and institutions to always obey court orders and judgements.

A suicide bomber killed at least 50 people at a mosque in northeastern Nigeria on Tuesday, the biggest mass killing this year in a region facing an insurgency by Militant group Boko Haram. “Some of the dead were in pieces beyond recognition,” Bayi Muhammad, a worshipper at the mosque in Mubi who escaped the blast because he was late for early morning prayers told Reuters. Adamawa police spokesman Abubakar Othman said the death toll is at least 50 but “there could be more as those seriously injured could add to the figure.” Mubi is in Adamawa where Boko Haram held territory in 2014. Troops pushed them out in early 2015. Tuesday’s attack was the biggest in Nigeria’s northeast since two schoolgirl suicide bombers killed 56 people and wounded dozens more at a market in Michika, also in Adamawa, last December.

Suggestions

  • The real story of the GDP growth figures is found in the details. The growth is driven by recoveries in oil price and oil production levels. Non-oil GDP contracted, especially a key sector like manufacturing. The indicates that none of the structural changes that countries like Russia and Egypt managed during the oil price crisis of the last two years was carried out by Nigeria. We remain supremely vulnerable to shocks to either global oil prices or any distortion in production levels, two events that the Nigerian state has scarce control over. The submission therefore is this – we have let the fine opportunity presented by the crisis go to waste.
  • Whenever a government needs to explicitly state that a move is not politically motivated, the discerning public is generally inclined to believe the opposite. All the actions of government around the Intels saga do not point to economic motivations. Attempting to widen the companies impacted by this latest move does little to mask the primary target. The government will do well to be reminded that Nigeria is unable to meet the funding requirements for most of the crucial developmental needs of the country. It will rely on partnering with the private sector to achieve even the baseline goals. And signals such as this will be interpreted in only one way.
  • The Chief Justice made a fine point of noting that the litmus test to find out how free and democratic any nation is, is to take a cursory look at its judiciary to find out what powers the nation is prepared to concede to this vital partner in governance. On that test, the federal executive scores very poorly. Buhari’s ministries, departments and agencies, particularly those with crucial enforcement and prosecutorial roles like the Economic and Financial Crimes Commission and the Department of State Services show little respect for orders and judgements issued against them while conveniently enforcing favourable ones. If Nigeria is to experience a seminal moment in its judicial annals like Kenya’s recent judicial annulment, it would start with a government leading the way.
  • Boko Haram might not be holding territories anymore but their guerrilla tactics of suicide bombing sadly seem effective. This Mubi attack, the first in three years there, could be indicative of their desire to push back into areas they used to be very active. It is also indicative of an escalation in the faction fight within Boko Haram, as the Shekau faction had labelled certain mosques in the Mubi area as “Mosques of Dissent.” This implies that more attacks on mosques may be in the offing. As a result, the security agencies must intensify intelligence gathering to forestall further attacks.