By SBM Intelligence
It is often a struggle to keep track of the superlatives one has used to describe Nigeria over the years but in a week in which its army got caught in a thicket of its own lies, its investment environment was panned, its political elite felt the cold hands of death while running from justice, a second recession in a half-decade got confirmed, an emerging superpower committed to playing in its neck of the woods as another world power called out its leaders, it is really not a stretch to imagine the Nigerian ship slowly listing on its side.
Nigeria has slipped into a recession after its gross domestic product contracted for the second consecutive quarter, according to data released on Saturday which showed the impact of the COVID-19 pandemic and low oil prices. Africa’s biggest economy was last in recession in 2016, its first in a generation, and emerged the following year. But growth has been fragile and the pandemic has hit the economy hard, amid low oil prices. The continent’s top oil exporter relies on crude sales for 90% of foreign exchange earnings. “Q3 2020 Real GDP contracted for the second consecutive quarter by -3.62%,” Yemi Kale, the statistician general, said on Twitter. “Cumulative GDP for the first 9 months of 2020, therefore, stood at -2.48%,” he added. The oil sector contracted by 13.89% in the third quarter against growth of 6.49% in the same period a year earlier, according to data cited by Dr Kale, while the non-oil sector shrunk by 2.51% in the three months to September. The last time Nigeria recorded such a cumulative GDP decline was in 1987 when GDP declined by 10.8 percent. This is also the second recession under President Muhamadu Buhari’s democratic reign — and his third as head of state. The Bill and Melinda Gates Foundation, in its annual Goalkeepers report, said the last time these many countries were in a recession at once was in 1870.
The black swan event of 2020, the COVID-19 pandemic and its economic impact have been severe on the global economy, which is the key trigger for the similarly rare incidence of many countries in simultaneous recession globally. How severe that recession is, however, will be largely determined by a country’s economic preconditions – a scenario due largely to policy making, similar to the way preconditions make the ravages of the coronavirus more severe on the human body. Nigeria is the classic case of how debilitating preconditions from a previous recession, a slow recovery, ill-thought out policies around trade and foreign exchange and a government committed to continued resource wastage have set the stage for economic carnage in the era of COVID-19. It is possible that the country will return to anaemic growth from Q4 2020, but continue to remain vulnerable to any and every shock until these debilitating policy preconditions are reversed.
The Chairman of the Board of the Nigerian Economic Summit Group, Mr Asue Ighodalo, has said Nigeria is missing out on the $19 trillion invested in negative-yielding assets globally because the country’s investment climate is seen as “unwelcoming, unsafe, and unpredictable”. Ighodalo said this on Monday in his welcome speech at the 26th Nigerian Economic Summit. He said for a country in desperate need of development momentum and capital, the events of last month, including the #EndSARS protests, the debilitating riots, and all of the issues that emerged, were bad for morale, confidence, and business. “Of the $19 trillion invested in negative-yielding assets globally, none of it has been invested in Nigeria, regardless of what it can earn, because our investment environment has been tagged ‘unwelcoming, unsafe, and unpredictable’,” he said. According to Ighodalo, at a time when the country’s fiscal space is constrained by low revenues and high debt, the need to strengthen the attractiveness of the investment climate to encourage local and foreign investments is of utmost importance. He said, “The world does not trust our commitment to the rule of law and the impartiality and efficiency of our dispute resolution processes. “Our multiple exchange rates, policy flip-flops and perception of how we react to investors, confuses the investing world. These are not labels we can afford particularly now.”
Since the oil boom of the 1970s, Nigeria has become a largely oil revenue dependent economy, despite the fact that the oil sector constitutes, as at last Friday’s GDP report, a mere 8.76% of GDP. This anomaly, along with a huge population, signals a huge untapped economy, hence the latent attractiveness of the Nigerian market to foreign investors. Unfortunately, over the last few decades, the promise of improvements to governance, infrastructure and conducting business has faltered. According to the UNCTAD 2020 World Investment Report, FDI flows to Nigeria wilted to US$3.3 billion in 2019, a 48.5% plunge compared to 2018 (US$6.4 billion) as investors laboured under the effects of austerity measures and exchange rate volatility. What these numbers ultimately indicate is that foreign investors do not believe taking a risk on the Nigerian market is worth their while in spite of return potential. For a country looking to grow its way out of a dire situation, there couldn’t be a worse economic statement to make.
From Westminster with love
Members of the United Kingdom’s Parliament on Monday called for sanctions against the Nigerian government and military officials over human rights abuses during the #EndSARS protests. The calls for sanctions were made on Monday evening when the Petitions Committee of the UK Parliament held a debate in Westminster Hall on the motion “That this House has considered e-petition 554150, relating to Nigeria and the sanctions regime”. Citing the shootings at Lekki, Oyigbo, Delta as well as the unjust victimisation of protesters after the protests and the freezing of protesters’ accounts, parliamentarians described President Buhari’s government as a dictatorship. A member of the Petitions Committee, Theresa Villiers MP, opened the debate, while the Foreign, Commonwealth and Development Office sent a minister to respond. Petition debates are general debates which allow members of parliament from all parties to discuss the important issues raised by one or more petitions and put their concerns to government ministers. More than 200,000 people had signed a petition asking the UK to sanction the FG for clamping down on the rights of members of the #EndSARS movement. The petitioners had accused the Nigerian government and the police of violating the rights of agitators protesting against police brutality, while also calling on the UK to implement sanctions that would “provide accountability for and be a deterrent to anyone involved in violations of human rights”.
The debate in the UK Parliament is the result of tireless activism by Nigerians in the diaspora, and is likely a sign of things to come for the Buhari administration regarding its abysmal human rights record. Pressuring the government from abroad could be particularly effective, given that many of the country’s leaders have assets in the developed world and those assets could easily be targeted for sanctions. All eyes now turn to the United States where the matter could be taken up by the incoming Biden administration and a new Congress. The US boasts the largest and wealthiest Nigerian diaspora in the world and organised political pressure by an energised, enraged and engaged group could be the tipping point for Washington to take more than a passing interest in Abuja’s behaviour. In the end, the threat of international ostracisation against key administration officials might be the path for victims of the Lekki Massacre to get justice.
Web of lies
The Nigerian Army admitted on 21 November that soldiers were given both live and blank bullets when they were deployed to protests at Lekki toll gate on October 20. The admission seems to confirm a key finding of a CNN investigation into the shooting. “The soldiers were both given live and blank bullets. In this particular case, we saw that these protests had been infiltrated by some hoodlums,” Brig. Gen. Ahmed Taiwo said in his testimony to the Lagos judicial panel of inquiry into the incident. “You had peaceful protesters no doubt. But there were also hoodlums who sought to take advantage. That is why they were armed (with) blank bullets in addition to the live (bullets) they were carrying.” While the government has dismissed critical reporting by Nigerian and international media as “fake news” and “irresponsible, the Federal Ministry of Information and Culture has budgeted ₦250 million in the 2021 budget proposal for ‘engagements with foreign media, influencers, bloggers, local media practitioners and public relations.’ According to the budget proposal, ₦79.2 million will be spent on “quarterly interaction with foreign media and PR lobby”. About ₦70.3 million was also earmarked for the facilitation of ministerial media appearances for the “36 ministers, influencers and analysts on radio and television as well as social media and print media.” The ministry also set aside ₦94.4 million for institutional interactions with stakeholders such as Nigeria Union of Journalists, Nigeria Guild of Editors, bloggers, online publishers and weekly ministerial briefings. In another shooting incident, the Speaker of the House of Representatives, Femi Gbajabiamila, met with newspaper distributors and vendors in Abuja over the killing of a colleague of theirs, Ifeanyi Okereke. Okereke was allegedly killed by one of Gbajabiamila’s security aides on 19 November. The Speaker had visited the family of the slain newspaper vendor at Okereke’s family home in Kwata village in the Madalla/Suleja area of Niger State. The incident occurred at the Federal Secretariat, Abuja when Mr Okereke and other street vendors flocked around the convoy of the Speaker, who was said to be in the habit of giving out money anytime he was in the area. Mr Gbajabiamila had later confirmed that the security aide is an operative of the Department of State Services.
The sustained public pressure on the Nigerian Army has seen it recanting and recasting its claims around its involvement in the Lekki toll gate shooting, with each new claim further robbing it of credibility and the public’s trust. The saga playing out is also an excellent case study on the Nigerian government and its institutions wilfully participating in the spread of fake news. The claims of Lai Mohammed that private individuals and bodies are responsible for the trend of fake news must be seen for what they really are: a less-than-subtle attempt to shrink the public space for freedom of expression in order to muzzle critical perspectives of the government’s actions. Considering the repeated denials and retractions by the army, it is unlikely any soldier or officer will be punished for their role in the shooting. This lack of accountability is also what might play out with the security aide of Speaker Femi Gbajabiamila who shot a newspaper vendor dead last week. This lack of accountability is what emboldens soldiers and policemen to act with impunity towards citizens, as they know there are no real repercussions for their behaviour. Nigeria can hardly claim to be a democracy if it continues down this path.
The Federal High Court (FHC) in Abuja on Monday ordered the remand of Senator Ali Ndume over his inability to produce the former Chairman of the defunct Pension Reform Task Team, Abdulrasheed Maina, who has jumped bail in respect of his ongoing ₦2 billion money laundering trial. Justice Okon Abang ordered that the senior lawmaker representing Borno South in the Senate, who stood surety for the defendant in May 202,0 would only be released from prison until he either produces Maina in court or sells off the ₦500 million worth of property located in Asokoro, Abuja, which was used as the guarantee for the bail bond and tenders the evidence of the payment of the proceeds of the sale into the Federation Account. The judge ordered that his remand in Kuje Prison pending his satisfaction of the conditions for release.
The recent order by the FHC is the latest intrigue in the Maina saga that has been going on for a little over eight years now. The absence of Maina from the trial raises questions as to how he was able to ‘jump bail’ and if he is even in the country (he was once able to escape arrest and move to Dubai). It also lends credence to Maina’s long-held claims that he is a scapegoat for powerful interests who are also involved in the pension scam. It also suggests that Maina enjoys the protection of persons in government, and that protection enables him to keep escaping arrest and jumping bail. We do not believe that Senator Ndume will be able to produce Maina, so he is likely to lose his surety. But it is important to point out that the turn of events in this case and the likely remand of a sitting Senator may not be unconnected with Mr Ndume’s recent criticism of key players of the Buhari administration. In a recent interview with Nigerian broadcaster, Channels TV, Mr Ndume accused “kleptocrats in government for betraying President Buhari’s policies”. He has also criticised the FG’s handling of the insurgency in the North East. In summary, following the political levers that underpin one of the biggest cases of public sector fraud in Nigerian history will provide a far more illuminating perspective on the state of governance in Africa’s largest economy than anything that might come out of the courts.
One too many
Philip Shekwo, the chairman of the All Progressives Congress (APC) in Nasarawa has been found dead. Armed men abducted Mr Shekwo from his residence in Lafia, the state capital, on Saturday night. They were said to have exchanged gunfire with the security detail attached to the APC chairman before whisking him away. The state police commissioner, Bola Longe, who confirmed the incident, had said his men were combing forests and flashpoints to ensure that Mr Shekwo is rescued. On Sunday, however, the state police spokesman, Raman Nansel said Mr Shekwo had been killed and an investigation had commenced. In a similar development, Alhaji Lawal Dako, the Chairman of the Peoples Democratic Party (PDP) in Sabuwa Local Government Area, Katsina, who was shot by bandits on 8 November has died. According to media reports. Dako died on 20 November 20 at the Ahmadu Bello University Teaching Hospital, Zaria as a result of his injuries. According to the Katsina PDP chairman, Alhaji Salisu Majigiri, the bandits also killed Dako’s granddaughter. On 21 November, a military convoy was ambushed by Islamic State West Africa Province in Kwayamti village, about 15 kilometres from Gajiram, Borno. According to reporting by security website Humangle, the attack on troops in Gajiram, near the state capital Maiduguri, resulted in five casualties – four soldiers and a member of the Civilian Joint Task Force (CJTF). The insurgents also seized military equipment during the attack.
While the attacks on political leaders could be seen as cases of their being the unfortunate victims of a perennial crime, it could also be that they were victims of targeted assassinations borrowing from the playbook of bandits and kidnappers. Unfortunately, the police’s inability to isolate and investigate each crime on its merit means that these crimes are often grouped with similar ones, fuelling the impression of a wave of insecurity composed of many faceless incidents and victims. What is undeniable, however, is the rising levels of insecurity – banditry and kidnapping chief among them – in the North-West and North-Central. In the North-East, the super camp strategy of the army has failed to yield the required results. While it has increased the safety of the military bases, it has increased the risks of military convoys being ambushed by terrorists as the soldiers commute on exposed transport corridors and are basically sitting ducks for attacks. 18 months ago we warned that the strategy would not achieve the desired results. We are apoplectic at the prospect of being proved right. The army has to swallow its pride, revisit the super camp strategy and properly equip its soldiers to be able to take the fight to the terrorists.
China is expected to take a bigger role in the peace and stability of the Sahel region of West Africa after pledging to boost funding and troop numbers for United Nations missions. Dai Bing, China’s deputy permanent representative to the UN, has said Beijing would continue working with the international community for long-term peace in the Sahel. Dai told a UN Security Council briefing that China would provide 300 million yuan (US$45.7 million) to the Joint Force of the Group of Five (G5) for the Sahel – a security and counter-terrorism initiative covering Burkina Faso, Chad, Mali, Mauritania and Niger. He called on the Security Council to give priority to those G5 nations and provide more stable financial support to the joint force. Dai also said China supported efforts to find African solutions to African issues and a greater role for the Economic Community of West African States (ECOWAS) and the African Union in regional affairs. The unstable Sahel region is meanwhile a strategic point for Beijing’s trade ambitions in Africa. Chinese investments in the region are vast – spanning Senegal, Niger, Chad, Nigeria and Sudan, with recent advances in Burkina Faso after it switched diplomatic allegiance from Taipei to Beijing.
After more than a year of espousing vocal support for the G5, China has finally put some money where its mouth is with this funding support for the regional force. Its approach, however, buttresses its preferred approach of countries building local security capacity and fostering regional cooperation rather than an interventionist approach that will put its soldiers on the ground. As such, France will remain the largest contributor of manpower to the force with its 5,000 soldiers spread across the region. Although the US has 1,200 soldiers in the region, they are mostly based in the Republic of Niger, have their mandate restricted to training the host military and are thus not part of the G5. From a geopolitical perspective, the new funding, while easing the burden on France, is unlikely to increase overall Chinese influence on regional security without Chinese boots on the ground. Then there is the US. Whether the US will increase its military footprint under an expanded regional mandate will largely depend on the Biden administration’s foreign policy priorities, but greater Chinese involvement is likely to make that happen. The end product might be the opening of yet another arena of geopolitical competition between Beijing and Washington. How long China would keep its soldiers away from the region remains unknown. It will likely scale up its security involvement as its investment in the region increases. In this sense, its West Africa play is sure to incorporate lessons from its East Africa experience, where a military support base in Djibouti represents an attempt not only to participate in the anti-piracy operations in the Gulf of Aden but more importantly to protect its security and economic interests. However the calculus plays out, one thing is clear: China has firmly planted a flag in these parts.