The week ahead – Blurred lines
31st August 2018
The EFCC questioned the chief executive of Zenith Bank, Peter Amangbo last week over transactions done for the oil-rich Rivers State. According to Victor Adoji, a spokesman for the lender, Amangbo was invited by the anti-graft agency “to clarify certain aspects of our relationship with the Rivers State government,” Bloomberg reports. He was not detained and was allowed to leave after making a statement, Adoji said, without being able to give more details of the case. The EFCC is alleging that Zenith failed to report suspicious transactions amounting to at least ₦117 billion ($323 million) executed on behalf of Rivers State over a three-year period, Premium Times reports.
President Muhammadu Buhari on 26 August has controversially indicated that his administration may suspend the rule of law under certain circumstances. Mr Buhari told the opening ceremony of the annual conference of the Nigerian Bar Association that the “rule of law must be subject to the supremacy of the nation’s security and national interest.” In his prepared remarks, he said the Supreme Court “has had cause to adopt a position on this issue in this regard and it is now a matter of judicial recognition that; where national security and public interest are threatened or there is a likelihood of their being threatened, the individual rights of those allegedly responsible must take second place, in favour of the greater good of society.”
At least 30,000 metric tons of cocoa are trapped on their way to Lagos’ two ports as roads in a state of disrepair delay access to ships, the cocoa exporters body said. Travel to the Apapa and Tin Can Island ports that previously took hours, now takes as much as four weeks as trucks struggle through cratered and water-logged roads to get there, Pius Ayodele, president of the Cocoa Exporters Association of Nigeria, told Bloomberg. The affected cargoes are either in traffic jams or stored in transit warehouses in Lagos. “A greater part of this travel time is spent at the epicentre of the congestion which is just 6 kilometres (3.7 miles) to the ports,” Ayodele said.
British Prime Minister Theresa May urged Nigeria on 29 August to tap into the City of London’s financial expertise as she sought to build a new trading relationship with Africa’s biggest economy and most populous nation. “We offer… the important capacity to bring access to capital markets of the City of London, together with professional services expertise,” May told reporters at Abuja airport after a meeting with President Muhammadu Buhari before heading to Lagos. Earlier, May and Buhari signed agreements on economic and defence cooperation. In a related diplomatic development, German Chancellor Angela Merkel visited Nigeria on 30 August along with a delegation of business leaders. Illegal migration and continued economic cooperation were on the agenda in talks with President Buhari.
Suggestions
- The EFCC’s interest in Zenith Bank’s transactions involving Rivers State signals a willingness on the part of the Buhari administration to focus on the latter given its pre-eminence in the political architecture of the opposition PDP. Rivers State has emerged as the hub and financial nerve centre of the PDP – a position that has seen its governor, Nyesom Wike, as one of the most important figures within the party’s ranks, if not its most influential kingmaker. Allegations of malfeasance involving the Rivers State government could very well be seized upon as a pretext for freezing the state’s accounts ahead of an election year during which resource mobilisation for political campaigns will become more significant. A ruling party that has hinged its re-election bid on the need to consolidate on its “war against corruption” is likely to double down on such rhetoric in 2019 as it seeks to supply a useful narrative for justifying actions targeted at the opposition. Concerned actors may mount legal challenges seeking judicial clarification of the executive order which empowers the President to freeze the bank accounts of institutions and individuals being investigated for corruption.
- Although the President did not specify current court cases for which his administration views the need to uphold the “national interest” above the rule of law, the attorney general, Abubakar Malami, used the national security argument to explain the government’s refusal to comply with repeated court orders for the release of a former National Security Adviser (NSA), Sambo Dasuki who was arrested in 2015 for alleged possession of firearms and diverting $2.1 billion. The administration has, in the past, made the same argument to justify the continued detention of the leader of the Shi’a Islamic Movement of Nigeria, Ibrahim El Zakzaky. This cannot be an acceptable argument for a democratically elected government in the middle of asking voters to exercise their franchise in its favour. The critical context to highlight here is that the only institution that is permitted to derogate any Nigerian’s civil rights is the judiciary – one whose independence has been consistently undermined by the current administration – including a crackdown on some senior judges in 2016. With these latest remarks, the government’s convenient extra-legal justifications for worrisome behaviour has thrown out the door its rule of law pretensions.
- Nigeria currently ranks a joint fifth with neighbouring Cameroon among the world’s biggest cocoa producers, with the International Cocoa Organisation estimating its 2017-18 output at 240,000 metric tons. The Lagos Chamber of Commerce and Industry says that the slow down from the continued decay of access roads to the ports has led to escalating costs and is taking such a significant toll on economic activity that haulage costs have gone up about 400 per cent. The fact is that the incentive that is measured is the one that is optimised for. In Nigeria, the main incentive the ports are measured on is revenue generated for the government only, and this has created the situation where there is no concerted effort to drive down the time it takes to do actual business at the ports. Coupled with bad roads, it is clear that Nigeria as a place ready to do business with the world is mere lip service. The ripple effect is clear – exponential cost increase, waste and lost business. Ultimately, the farmers who have worked so hard are left poorer.
- It is clear that the British are attempting to create new opportunities as the fallout from Brexit intensifies. The UK might be desperate because of its internal political realities, but Nigeria will do well to realise that the European Union (of which Germany is its biggest economy and chief proponent) will be a bigger and more profitable trading partner – we are Germany’s second biggest market in sub-Saharan Africa, for instance. Britain is a service-based economy with a relatively limited demand for Nigerian exports, still largely raw commodities. Furthermore, this demand is unlikely to rise to fill any gaps created if the negotiations lead to the UK receiving some preferential concessions from a whittled down EU. The EU is also driving its own agenda of supporting the kind of economic development that will curb the tide of African migration – legal and illegal – hence Merkel’s visit to the country (as well as Senegal and Ghana). Thus, Nigeria will do well to take advantage of this situation and obtain the most favourable terms of trade possible.