Inevitably, politics has taken over where governance is badly needed – from an inability to grapple with a fuel crisis, probes into two big-ticket oil projects and monetary policy paralysis mixing up with a major critique of the incumbent’s governing record. It was not all doom and gloom though, with a revised election timetable holding some hope for greater political clarity and a northern state doing something serious about pastoralism.
Obasanjo gives voice to growing Aso Rock discontent
Olusegun Obasanjo, Nigeria’s military chief of state from 1976 to 1979 and its civilian president from 1999 to 2007, published a thirteen-page statement, “The Way Out: A Clarion Call for Coalition for Nigeria Movement” on 23 January in which he sharply criticised Nigerian politics, comparing the country’s state to that of lice-infested clothes. Specifically, he identified “poor performance in government—poverty, insecurity, poor economic management, nepotism, gross dereliction of duty, condoning of misdeed—if not outright encouragement of it, lack of progress and hope for the future, lack of national cohesion and poor management of internal political dynamics and widening inequality.” These, according to the former president, “are very much with us today.” In the note, Obasanjo recalled his earlier criticism of former President Goodluck Jonathan and scored current president, Muhammadu Buhari poorly, urging him not to run for re-election in 2019. He is also critical of Nigeria’s two principal parties, the Peoples Democratic Party and the All Progressives Congress, contending that neither “is a worthy horse to ride to lead Nigeria at this crucial and critical time.”
President Obasanjo’s letter has thrown the cat among the pigeons as far as President Buhari’s second term ambitions are concerned. Obasanjo is a man that while controversial, retains undeniable influence in and outside Nigeria. For some, his letter has sounded the death knell for the Buhari administration. What remains to be seen, however, is how effective the new movement, Coalition for Nigeria, will be, especially as Obasanjo insists that it will not be a party. We expect that following Obasanjo’s letter, more people will break cover and join the ranks of critical voices. On his part, Obasanjo will back a different presidential candidate in the coming months.
A subtle message to Buhari hidden in a timetable
The House of Representatives on 23 January amended the Electoral Act to change the order of 2019 general elections’ timetable. This came barely a month after the Independent National Electoral Commission released the timetable for the general elections. With the amendment, the National Assembly election is to hold first, followed by gubernatorial and state assembly polls and the presidential election to be conducted last. The amendment was made at the Committee of the whole House, presided by the Deputy Speaker, Yussuff Lasun. The lawmakers amended the Act while considering the report of the House Committee on Electoral Matters which proposed amendment of the Electoral Act 2010 (as amended). Under the INEC timetable, Presidential and National Assembly elections were to hold first, while governorship and state assembly polls are to follow. The House also made an increment in campaign spending limits to be incurred by candidates for presidential candidates from ₦1 billion to ₦5 billion. It raised the governorship bill from ₦200 million to ₦1 billion, while Senatorial and Representative’s candidates’ expenses are not to exceed ₦100 million and ₦70 million, respectively. The President is yet to sign the bill into law.
The effect of the new election timetable, if passed, is that politicians must run on their merit and not benefit from the wave of support a presidential candidate will receive in their constituencies. It is also a warning to President Buhari that support for him has waned and he cannot be fully assured of backing by his own party members. It also means that the electorate will have to pay closer attention to lower-level elections. This is good news for Nigeria’s democracy.
Nigeria still stuck in the fuel scarcity rut
Long queues of motorists and other users of petrol returned to many petrol stations in Lagos and Ogun states after a brief respite from the scarcity that rocked the country from December to early January. Many stations in both states were shut on Sunday, while some dispensed the product above the official ₦145 per liter price. Some stations in the Ikotun, Ejigbo, Isolo, Idimu, and Igando districts of Lagos were selling at between ₦160 and ₦180 per litre, while others only sold to motorcycle riders and other petrol seekers with Jerry cans, who were charged at least ₦200 extra by petrol attendants, and as high as ₦1000 in Surulere. NNPC spokesman, Ndu Ughamadu told the Punch that the situation in Lagos and its environs were a result of technical hitches. “At the weekend, there was a technical hitch in ships berthing and discharging. But this has been rectified. So, today [Sunday] alone, 250 trucks have been pumped into Lagos compared with when we had the hitch and we supplied [less than] 200 trucks. So, normalcy will return in a matter of hours in Lagos,” he said.
The NNPC and the government can do all the stopgaps they want, but the point is this – they have wasted a crisis. We are now back to square one, with ballooning subsidy payments, diversion of petrol, escalating daily consumption numbers that do not correlate with our population’s demands, and rampant scarcity. All because Nigeria insists on keeping price controls for petrol. We had advised before at the height of the oil crash that Nigeria needs to scrap the PPPRA template that institutes the price controls and let the price of petrol be market determined. Until that is done, Nigeria will continue in this disastrous cycle that does no one any good.
Two impending probes highlight well documented Nigerian O&G problems
The Senate Ad Hoc Committee on Investigation of the Local Content Elements and Cost Variations of the $16 billion Egina Offshore Oil Project has ordered that the accounts of the project be audited. The committee said the audit was to ensure that the country was not trapped in perpetual debt without any benefits from the project. The project, which commenced in 2013 and is being undertaken by Total Upstream Nigeria, is almost 90 percent completed. The Egina FPSO vessel, built and transported by Samsung Heavy Industries, arrived Nigeria from South Korea to commence oil production on 23 January. In a similar vein, the Senate voted on 24 January to launch an investigation of the NNPC’s state long-awaited Brass LNG and its banking records. According to the Senate motion, while Brass LNG’s bank account was intended to be held by the CBN, corporate records show it is with Keystone Bank. The Senate documents said that the most recent deposit into the account was $648 million in September 2016 and that it currently holds $137 million. It did not provide detail on the discrepancy between the September 2016 deposit and the current balance. It is due to report back in four weeks.
It is not news that Nigeria’s petroleum sector is a maze of stained glass. Indeed the more you look the less you see. Over the years Nigeria’s economic segments have been dominated by government-sponsored institutions, with sad consequences. As of today some of them have either been knocked down or stripped of relevance, e.g. NITEL, PHCN, NIPOST, while the biggest of them all – NNPC continues to reign supreme. The tale of the Egina Offshore Oil Project is all too familiar. Case in point is the long-delayed 33,000-barrel-per-day Chevron GTL project designed to process 325 million cubic feet per day of natural gas from the Escravos Gas Plant expansion. Initially budgeted to cost $3 billion dollars, the plant eventually cost $9.5 billion and was inaugurated in 2014 whereas the Oryx GTL project in Qatar, a similar project in terms of technology and capacity, cost $1.5 billion and was inaugurated in 2006. It is within the Senate’s mandate to ask questions about the irregularities that prevail in the petroleum sector and hope that eventually robust oversight and eventual passage of the remaining elements of the PIB will cut this behemoth to size.
MPC gridlock latest example of small-mind politics
The Central Bank of Nigeria missed a key interest rate setting meeting intended for 22-23 January due to an inability to form a quorum. It did say in a statement that the benchmark rate will be maintained at 14 percent. The decision comes because there are not enough members of the CBN’s Monetary Policy Committee to form a quorum, the lender said in a statement. “Under these circumstances, and in the absence of a meeting of the MPC, the CBN shall continue to maintain key monetary policy variables as decided by the last MPC meeting,” the CBN said. On 19 January, multiple news organizations reported that the interest rate meeting was unlikely to be held because several new members of the MPC have yet to be approved by lawmakers, citing central bank sources. At least five of the MPC’s 12 members are due to be replaced after retiring last year. At the heart of the matter is a stand-off between the presidency and legislature over the latter’s powers to confirm – or deny – executive nominees to key posts within the government. A presidency official said he did not know when the stand-off would be resolved but it was being addressed by Muhammadu Buhari’s office.
This is a classic example of how politics can stifle economic development. In July 2017, the Senate said it would suspend all executive confirmation requests until Ibrahim Magu was removed as the acting chairman of the EFCC. This was as a result of the President’s refusal to nominate a different candidate for screening after the Senate had refused to confirm Magu over allegations of corruption. Magu has remained in an acting capacity for the past two years. Impasses are not uncommon in democracy though. We are of the opinion that the Nigerian government needs to recognize that in the current federal system, the Senate has a constitutional right to decline confirmation of its nominees to certain posts. There are other Nigerians who can lead the EFCC so this grandstanding is uncalled for. Perhaps in future, the government should confirm if it can gather enough votes in the National Assembly before sending its candidates or bills for consideration to avoid unnecessary standoffs.
Sokoto shows the way on revamping pastoral economy
The Sokoto State Cattle Breeding Project will be inaugurated in May, Commissioner for Animal Health and Fisheries Development, Tukur Alkali announced to journalists on a project site visit to Sokoto and Rabah LGAs. Alkali said the project will improve the genetics of local cattle breeds by ensuring higher milk and beef production while at the same time empowering farmers with modern techniques of livestock production. According to him, the project, which has cost ₦2.8 billion including on such things as the supply of Argentinian cattle to be used for crossbreeding, construction, training of personnel, security and other logistics inputs, “is the most definite long-term strategy to end farmers-herdsmen clashes as is being experienced across the federation, and in some neighbouring West African countries.” The project will involve 13 cluster farms which would be run by private entities and a research center and veterinary services will be provided. Sokoto had in 2010 signed a ₦2 billion contract with an Argentine firm, South American Breeding Technologies (SABT) for the establishment of a cattle breeding, milk and beef production factory.
This project said to the largest of its kind in West Africa according to its promoters, is indicative of the kind of practical solutions that could significantly address some of the economic fallout from a sensible resolution to the pastoral conflict. One thing this year’s violence has made clear is that Nigeria needs to transition its chronically under-invested pastoral economy into the modern era and leverage on its potential to deliver value for its practitioners in particular, and consumers at large. Nonetheless, the knotty political and social complications arising from the current pastoral conflict remain, and those can only be addressed through the sheer force of political will and skill. Sokoto seems to be leading the way in this regard.
SOURCE: SBM Intel
