The Week Ahead – The Fog Is Slowly Settling In…


With the FG stumbling over rice, Intel’s making the news again, MTN rocketing back to the green, the military raided a hideout it raided aeons ago, a major airline bungling a lucrative route and a potentially game-changing coalition facing a credibility hiccup, the road ahead is as obscure as a foggy Harmattan drive.

OBJ’s coalition could upend 2019 calculus

Former Cross River governor and a leader of the Coalition for Nigeria, Donald Duke, dismissed concerns that the newly-formed political movement proposed by former President Olusegun Obasanjo could ultimately benefit President Muhammadu Buhari in 2019. “I don’t see how this would favor him, Premium Times quotes Duke as saying on the sidelines of the formal launch of Coalition for Nigeria Movement in Abuja. Duke’s comment was aimed at debunking claims that the group might end up achieving the opposite of what it was founded to do by unwittingly returning Buhari to power in 2019. Some political commentators have accused the group of lacking that basic fundamental of politics that could portray its members as persons with clear and fresh ideas about Nigeria’s political future. It is not a spoiler, Duke said. We’re not here to help anybody.” Duke said the coalition’s anger is directed more at the incumbent Buhari than any other political force in the country.

President Obasanjo’s coalition is an interesting entrant into Nigeria’s political space. Critics say the group, which has yet to be formally registered as a political party, might end up playing a spoiler role in the 2019 elections by spreading the votes of the major opposition parties. Having said that, it will be interesting to see exactly how the Coalition for Nigeria movement will function, given that it draws membership from both major political parties and some other, smaller, parties. We believe that the coalition is trying to amass the kind of influence that will make it attractive to likely candidates looking to unseat President Buhari. These candidates will then make overtures to the movement and give them concessions in exchange for their support.

Aso Rock’s backward progression summed up by a fuss over rice

The Federal Executive Council (FEC) has approved the sum of ₦1.128 billion for the purchase of 50 operational vehicles to be deployed towards the purchase of vehicles for an anti-rice smuggling task force. The approval was made on Wednesday during the FEC meeting presided over by President Muhammadu Buhari. Finance minister, Kemi Adeosun, while journalists said the contractor for the project was Elizade and the FG was taking the measure in order to stop Customs officials from going to the markets to seize imported rice. The task force, already operational since July 2017, will be a multi-agency effort which includes Customs, NAFDAC, the Consumer Protection Council, the Ministry of Finance, the Trademark Practices Bureau and will focus on gathering information on how rice comes into the country, its key entry points and mapping out an effective strategy to stop it.

This is worrisome on three levels. First, the Buhari administration explicitly promised during its campaigns that the FEC would not be the contract approving body that it had become in previous administrations. This promise can be counted as broken. Second, by bringing the smuggling issue to the level of the FEC, the administration is tacitly admitting that its trumpeting Nigeria as becoming self-sufficient in rice production may not be accurate. Third, and perhaps most important, is the question of why a rice smuggling task force is required in a country that has to import rice to meet its consumption needs, and where domestic production is clearly insufficient. It appears that this administration’s obsession with being seen as making Nigeria self-sufficient in rice production has clouded better judgment. It is willing to spend unjustifiable sums to procure vehicles for a task force that has no business being in existence and which will bring hardship to Nigerians.

The NPA-Intels saga rolls on

The NPA has given Intels Nigeria a two-week ultimatum to remit an outstanding $48 million that ought to have been paid into the maritime agency’s treasury single account in 2017. Speaking during an interview with CNBC Africa, Hadiza Bala Usman, the agency’s managing director, said Intels’ notice of termination will stand if the company failed to settle its debt. I am giving Intels a possible two-week window to provide payment, two weeks from now, following which the notice of termination will not be withdrawn, she said. One of the issues we have had with Intels is their non-compliance with the TSA. As you are aware, the Nigerian government instituted the treasury single account which is the account that all revenues of government need to be paid into,  she added. In September, justice minister Abubakar Malami asked the NPA to void the boat pilotage agreement it has with Intels. Intels, a logistics and facilities services provider in the maritime and oil and gas sectors, was co-founded by Gabriele Volpi, an Italian national, and former Vice-President Atiku Abubakar. Malami said the agreement, which has allowed Intels to receive revenue on behalf of NPA for 17 years, violates sections 80(1) and 162(1) and (10) of the Constitution.

After last year’s incident where the NPA pronounced the Intels contract void, Intels reached out to the NPA, and, we assume, that negotiation led to an agreement on how it would comply with the TSA and settle whatever backlog existed. The public is not privy to such an agreement if it exists. However, as the management of the NPA has come out to request a final settlement of outstanding amounts, Intels will have to comply or produce counter facts that will show that the agreement was different from this settlement option. It is advisable for all interested parties to await this before making further comments and decisions on the issue.

MTN gets its mojo back

The MTN Group says it is anticipating a profit in its 2017 financial statement, adding that it has recovered from a $1 billion fine it paid for its Nigerian unit. In a statement, the company, Nigeria’s largest telecommunications network, said the financial statement would cover 12 months for the period ended 31 December 2017. The company announced that it lost $200 million in 2016 the first full-year loss of the company in its 22-year existence, blaming it on the fine imposed on it by the NCC. In 2016, NCC imposed a fine on the telco over its failure to disconnect 5.1 million unregistered SIM cards. The fine was reduced to ₦780 billion in December 2015 and was further reduced in June 2016 to ₦330 billion, with payment spread over three years. As of March 2017, the company had paid a total of ₦110 billion. The remaining payments to be made in tranches of ₦55 billion by March 31, 2018; ₦55 billion by December 31, 2018; another ₦55 billion by 31 March 2019 and a balance of ₦55 billion by 31 May 2019.

This will not come as a surprise to telecoms industry observers. While the fine impacted on profitability on the year it hit initially, MTN’s business remains fundamentally sound, hence the quick return to profitability. This is particularly good news as MTN inches towards its listing on the Nigerian stock exchange.

Nigerian aviation has some way to go

Medview Airline says it has suspended its Lagos to Dubai operations, almost two months after its inaugural flight took off on 7 December 2017. The airline said Dubai bound flights will resume operations on 24 March 2018. Muneer Bankole, managing director of the airline, told journalists on Monday that the operations were suspended because there was no ready aircraft to service the route until the given date. Bankole said the airline would use the opportunity to sort things out with Euro Atlantic, its lessor, and partner for 12 years. “While we want to leave the past behind us, it is imperative to say we have issues with our European partners over aircraft we leased from them, he said.

This was a busy week in Nigerian aviation. First, Nigeria and 22 other African countries launched an open air policy, the Single African Air Transport Market that will relax aviation regulations to create a free market environment for eligible commercial airlines. Then the junior aviation minister, Hadi Sirika said the government was unhappy with the pace of the remodelling of the Port Harcourt International Airport, Nigeria’s fourth largest and second worst in the world according to The Guide to Sleeping in Airports 2017 Survey for its unwelcoming ambience, a situation partly informed by the snarly remodelling work which has been on since 2011. Industry bodies say heavy taxation and poor infrastructure, and in Medview’s case, inadequate structural agreements, prevent African carriers from taking advantage of expected rapid growth. On the bright side, fellow Nigerian carrier Air Peace has announced plans to commence services to Kano and Yola in February as part of an ambitious route expansion programme that includes such destinations as Mumbai and Guangzhou. They might want to look at Medview’s travails as a cautionary tale.

The military huffs and puffs in dealing with its remit

The Nigerian Army on 31 January said its troops destroyed Boko Haram’s tactical ground, Camp Zero, in an ongoing clearance operation to dislodge remnants of Boko Haram insurgents in Sambisa Forest. Army spokesman, Sani Usman, a brigadier general, said troops of Operation Lafiya Dole under the operation DEEP PUNCH II, “recorded tremendous success in its ongoing military offensive against the insurgents. He said the military recovered a battle tank, guns, ammunition, religious scriptures, gas cylinders and assorted fertilisers, ostensibly for making IEDs. The troops also destroyed seven gun trucks, several vehicles, motorcycles and makeshift shelters tents and household items used by the insurgents. In an unrelated development, Amnesty International accused Nigerian security agencies of killing dozens of villagers in air attacks it deployed to quell communal violence in parts of the country. According to its country director, Osai Ojigho, the Nigerian Air Force often sent fighter jets to fire rockets at the affected villages as a warning to curb clashes. It described Nigerian authorities’ response to communal violence as “totally inadequate, too slow and ineffective, and in some cases unlawful.

In the past three years, the Nigerian Army has destroyed at least 30 Boko Haram camps within the Sambisa Forest, including Camp Zero, the insurgents’ erstwhile base. That Camp Zero is being destroyed again raises questions about the accuracy of the information relayed by the Army; the accuracy of their intelligence about the locations of the terrorist camps; the impact of the destruction on the terrorists’ camps; and the ability of the terrorists to regroup. Meanwhile, the Amnesty International report on the Air Force is an indictment of Nigeria’s security apparatus. The main effect of the bombings, so soon after the bombing of a refugee camp at Rann in Borno state, is the weakening of already low levels of trust between Nigeria’s military, and the population it is meant to protect.


SBM Intel