The week ahead – Backed into a corner…

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The President has seen better weeks than this, from the race to replace him entering a new gear up to the Senate President scoring a major judicial reprieve while he continued fielding questions about his administration’s opposition to an African free trade deal. At least, manufacturing is doing well with caveats and he signed a long overdue financial reporting bill. All of this must make the deteriorating situation on Nigeria’s eastern border all the more irritating.

Saraki becomes a political free bird

The Supreme Court on 6 July dismissed the trial of a Senate President, Dr. Bukola Saraki, on assets declaration and sundry charges instituted against him before the Code of Conduct Tribunal. A five-man panel of the court led by Justice Dattijo Muhammad unanimously upheld Saraki’s appeal, by dismissing the remnant three counts, declaring the evidence led by the prosecution as hearsay. The Danladi Umar-led CCT had, in June last year, terminated the trial upon an application by Saraki, by dismissing the entire 18 counts preferred against the Senate President. The CCT’s decision was based on the grounds that the prosecution, with its four witnesses and 49 exhibits tendered, only led hearsay evidence which could not be the basis to link Saraki to the 18 counts preferred against him. However, the Court of Appeal in Abuja ruling on December 12, 2017, in an appeal filed by the Federal Government against the decision of the CCT, restored three out of the dismissed 18 counts and ordered Saraki to return to the CCT to defend the three charges.

It is important to note that the Code of Conduct Tribunal, effectively Nigeria’s premier anti-corruption court, has failed to deliver convictions in high profile cases brought before it. Both the trials of Bola Tinubu and Bukola Saraki, which both came to naught, have exposed the Tribunal to charges of being used for political hatchet jobs. Measures will have to be taken to restore the institutional credibility of the CCT and to rebuild confidence in her. However, the most important implications of Saraki’s judicial victory are inevitably political. The Senate President can now focus on his ambitions with considerable single-mindedness. Judicial vindication by the country’s highest court constitutes some form of political capital which Mr. Saraki has already begun to spend in driving a realignment of the discontented elements within the APC with other opposition groups. Without the constraints necessarily imposed by having a corruption case hanging over his head, Mr. Saraki will feel liberated, and encouraged, to pursue his political path a course which is certainly divergent from that of the president and the ruling APC.

Buhari’s reelection path hardens

Nigeria’s main opposition parties have agreed on an alliance to select a joint candidate to contest next year’s presidential election, according to a memorandum issued by the alliance on 9 July. The ruling All Progressive Congress (APC) has split after one faction declared it no longer supported the government of President Muhammadu Buhari, threatening his hopes of securing a second term in elections due in February 2019. On July 4, a breakaway group of the ruling All Progressives Congress (APC) formed the Reformed APC (rAPC). Senate President Bukola Saraki is believed to be a key member of the new grouping.

The emergence of the Reformed APC (rAPC) and its split from the APC mirror the emergence of the PDP and its departure from the PDP four years ago. The new alliance should be seen for what it is – part of the usual pattern of realignments that occur during Nigeria’s election cycles. Typically, elite discontent with the ruling party crystallises into a schism and mass defections with breakaway factions forging alliances with opposition parties to create super coalitions. Whether the newfangled coalition is successful in attaining power, only time will tell. Much will depend on how it mediates the internal rivalries that will certainly ensue between the big egos of the A-list cast of politicians and presidential aspirants within its ranks. While Senate President Bukola Saraki is rumoured to be one of the prime movers of the rAPC, he is by no means the only influential politician in the mix and allying with other ambitious politicians and political groupings will most definitely generate new tensions as well as opportunities. What is also certain is that President Buhari has failed to keep together the coalition that brought him to power in 2015 and will face a far more difficult campaign for re-election that he did to win power.

Nigeria’s holding out on free trade pact untenable

President Muhammadu Buhari said on 11 July the country will soon sign up to a $3 trillion African free trade zone. Buhari’s government had refused to join a continental free-trade zone established in March, on the grounds that it wishes to defend its own businesses and industry. The administration later said it wanted more time to consult business leaders. In trying to guarantee employment, goods, and services in our country, we have to be careful with agreements that will compete, maybe successfully, against our upcoming industries, Buhari told a news conference during a visit by South African President Cyril Ramaphosa. I am a slow reader, maybe because I was an ex-soldier. I didn’t read it fast enough before my officials saw that it was all right for signature. I kept it on my table. I will soon sign it.

The continental free-trade zone, which encompasses 1.2 billion people, was initially joined by 44 countries in March. Nigeria should have been at the forefront of taking advantage of this but has lost time. However, we must move beyond merely signing the agreement now and to what policy measures we can institute in order to take full advantage of this new market opportunity. Nigeria must wean itself from the protectionist and isolationist tendencies which have limited the country thus far, and now encourage its producers to have export discipline.

NFIU bill becomes law as all sides lick political bruises

The Presidency announced on 11 July that President Muhammadu Buhari has signed the Nigerian Financial Intelligence Unit (NFIU) Bill into law. Senior Special Assistant to the President on National Assembly Matters, (Senate) Senator Ita Enang made the disclosure at the State House, Abuja, where he noted that Buhari appended his signature to boost Executive Order 6, also recently signed by the President to check illicit financial dealings in and out of the country. According to Enang, the NFIU which has now become an Act, will among other things, ensure compliance with international standards on matters bordering on money laundering and terrorist financing. It is also expected to check suspicious financial transactions, including receiving, requesting, analyzing, and disseminating financial intelligence to relevant agencies. The unit will henceforth be domiciled in the Central Bank of Nigeria, not the Economic and Financial Crimes Commission.

This was a long overdue assent to this bill. The undue drama that went into the signing process which endangered international transactions showed the levity with which the government took such an important compliance law. The new law was predicated on the requirements of Recommendation 29 of the Financial Action Task Force (FATF) Standards and Article 14 of United Nations Convention Against Corruption (UNCAC) NFIU had been admitted in 2007 into the Egmont Group, a global body responsible for setting standards on best practices for FIUs in over 131 FIUs from 131 jurisdictions. It is sad that the key driver of the delay was politicking between the presidency and the National Assembly over the EFCC director. We hope but are not confident, that the lessons from this will be learned and applied for the future.

PMI rise only half of Nigeria’s economic story

The Central Bank of Nigeria said the manufacturing sector expanded in June, a 15th straight month of expansion. The regulator, which released its PMI survey report, said the index stood at 57.0 index points. In a statement, the bank said that, of the 14 sub-sectors surveyed, 10 reported growth in the review month in the following order: paper products; furniture & related products; printing & related support activities; food, beverage & tobacco products; plastics & rubber products; electrical equipment; textile, apparel, leather & footwear; chemical & pharmaceutical products; petroleum & coal products and nonmetallic mineral products.” Transportation equipment, fabricated metal products, primary metal, and cement declined in the month. A separate CBN report, the Monthly Business Expectations Survey Report for May put business confidence index at 28.9 points, indicating its 650 respondents’ overall optimism on the economy, though it was unchanged from April.

The CBN’s Inflation Attitude Report suggests that Nigerians prefer higher interest rates to higher inflation. The report, published on the regulator’s website, also showed that Nigerians prefer lower interest rates if the conditions were right. The bank’s MPC has held rates at 14 per cent since 2016 to keep inflation in check. The annual contribution of the manufacturing sector to Nigeria’s GDP was recorded as 8.83 per cent in 2017, up slightly from 8.77 per cent in 2016. However, while the sector experienced an 0.2 per cent contraction in 2017 (albeit an improvement from -4.3 per cent in 2016), the numbers hardly paint the full picture. While BusinessDay reports that about 78 percent of new manufacturing investments in 2017 went to Lagos and Ogun, the past year has been filled with reports of manufacturing plants shutting down across the country, the latest being P&G’s Agbara plant. So whilst the PMI’s growth in 2018 is positive news, it basically correlates with the overall growth story of the Nigerian economy, one in which the much-touted economic diversification strategy remains a mirage.

A decree and more dark clouds gather over Cameroon

Cameroon’s president Paul Biya issued a decree on Monday saying a presidential election will be held on 7 October, amidst a worsening security situation in the Southwest and Northwest Anglophone regions. Biya, 85, who has been in power for close to 36 years has not announced whether he will run for a seventh re-election, but in May his party sais he is their “natural” candidate. The opposition has described Biya’s state record as chaotic. Among them, Joshua Osih, who was elected in February as candidate of the main opposition party, the Social Democratic Front (SDF, English-speaking). This 49-year-old businessman contest for the Cameroonian presidency, after Ni John Fru Ndi, leader of the SDF and historical opponent to Biya decided to give way to the young cadets of the party.

The political and social crisis in western Cameroon is likely to be compounded by the election announcement as the security situation continues to deteriorate. Buea, a city of 100,000 and capital of the Southwest region witnessed gunfire exchanges this week between soldiers and Ambazonian Anglophone separatists – the first time the city had witnessed an armed confrontation since the beginning of the English-speaking crisis in 2016, and despite the presence of a large military deployment. According to the government, more than 80 soldiers have been killed in renewed fighting; while large parts of both regions are cut off from the Internet and food prices skyrocketing. Furthermore, it remains unclear if elections will (or can) be conducted in parts of English-speaking Cameroon, especially in pockets of territory in Northwest region held by separatists. Biya is looking to cement his RDPC’s hold on a country buffeted by a host of security challenges – Boko Haram remains activities in the far north amid critics warning about the decree’s potentially explosive implications. The consequences might be damning.

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