Nigeria’s secret police stopped lawmakers entering parliament on Tuesday in a blockade seen by the opposition as a bid to intimidate its leaders, but the presidency condemned the move and the acting president fired the head of the secret police. While not the first such incident since Nigeria became a democracy in 1999, it coincides with increased tension between the National Assembly and the Executive ahead of an election in February 2019 when President Muhammadu Buhari will seek a second term. The motive for the blockade was not immediately clear, but a spokesman for Vice President Yemi Osinbajo said in a statement that the DSS director general, Lawal Musa Daura, had been fired. Osinbajo is acting president for Buhari, who last week left for a 10-day holiday in Britain.

The Central Bank of Nigeria may increase the monetary policy rate (MPR) if inflationary pressures do not abate, Deputy Governor Joseph Nnanna, has told Bloomberg. Nnanna said although the monetary policy committee (MPC) wants to keep the major determinant of interest rate positive, the anticipation of increased spending ahead of the 2019 elections could slant some members’ votes toward a rate hike. At the end of its July meeting in Abuja, members of the MPC voted to retain the MPR at 14 per cent for the 10th consecutive time. The CBN deputy governor said the committee has witnessed a “shift” such that three out of 10 members voted for higher rates at the July meeting.

New data from the statistics agency indicate that the compensation of Nigerian employees grew by 11.14 per cent in real terms, the first positive annual growth recorded on that metric since 2015. In its GDP by Income and Expenditure Approach report for 2017, the NBS said the combined data for all the four quarters showed that workers remuneration rose nominally to ₦29.9 trillion from ₦25.8 trillion in 2016. Employee compensation was ₦24.7 trillion in 2015 in nominal terms. Labour force participation at the end of Q2 2017 was 85 million out of which about 51 million were categorised as being fully employed. In 2016, participation was 81 million with those in full employment standing at 52.5 million. Despite the rise in salaries and wages, a 48 per cent decline in the exchange rate between 2014 and 2017 essentially halved the purchasing power of Nigerians.

The ruling party in the Democratic of Congo on 8 August named a candidate for long-delayed elections due to hold in December this year, narrowly beating a deadline set by the elections body for the submission of candidature. The candidate, Emmanuel Ramazani Shadary is a former interior minister. His nomination was confirmed by information minister Lambert Mende. The 57-year-old parliamentarian and former governor of the Maniema Province is expected to replace President Joseph Kabila if the ruling party wins the upcoming polls. The current move indicates that Joseph Kabila, in power since 2001, will be stepping down as president. The constitution barred him from a third term after having served two terms.

Suggestions:

  • Tuesday’s blockade on parliament by the secret police is the latest in a series of attempts to oust the leadership of the Senate. These attempts are widely believed to have the backing of the executive branch. In a matter of hours, however, it became clear that the optics of the incident had added to the administration’s negative PR index. The spectacle of masked men surrounding parliament lent itself easily to narratives of a coup. It could also easily have created sufficient political uncertainty to enable an unconstitutional political intervention by anti-democratic forces. This surely also alarmed foreign observers. The firing of Daura represented the presidency’s attempt to hurriedly reassert control over a volatile situation and also decommission the increasingly widespread belief that security agencies have been given a broad license to engage in a war of attrition against political enemies. While Daura’s sack was greeted by widespread approval, whether it represents a change in the behaviour of security agencies remains to be seen. The details of the drama, as well as the motive for the blockade, have yet to be fully disclosed. With elections impending, the conduct of security agencies will come more into focus. If there was a winner from the episode, it was surely the Senate President who continues to elicit public sympathy and position himself as a defender of democratic institutions. Saraki’s press conference further cast him as an accessible leader in contrast to the President who is widely seen as aloof, tone-deaf and uninterested in talking directly to Nigerians.
  • In a recent BusinessDay summary of Q2 2018 financials released so far, Sterling was the only one to have bucked the trend, growing its loan book by an anaemic ₦628 billion, less than 1 per cent. Tier-one giants, Zenith and First, as well as tier-two lenders FCMB and Diamond posted negative loan growth. The statement by Mr. Nnanna is indicative of the divergence in the FG’s view which controls the fiscal policy and the CBN which is in charge of monetary policy. Many analysts believe there was a window in the last quarter of 2017 to crash the policy rate and give banks an indication to expand credit to the real sector. Unfortunately, not only was that opportunity not taken, the CBN is now signifying a stance to increase rates at the slightest indication of inflation growth. The regulator just skipped over one potential banana skin only to land on another. It would be hoped that it does not slip on this one.
  • In 2016, compensation of employees, in real terms, had declined by –9.68% year on year. This component expanded steadily throughout 2017, with year-on-year growth rate reaching double-digit from the second through fourth quarters of the year. This is indicative of two things. The first is that perhaps employment is beginning to expand again as the economy returns to growth. Second is that employers are adjusting remuneration upwards in order to compensate for the loss of purchasing power due to inflation over the past two years. Both are welcome developments.
  • Having repeatedly refused to commit publicly to not standing as a candidate, Kabila’s tacit acceptance of Shadary – notwithstanding the dozens of protesters killed since Kabila refused to quit power at the end of his mandate in December 2016 – has to be seen as a major step towards bringing stability to one of the world’s most resource-rich but bitingly poor countries. The journey, however, remains fraught with challenges. For one, the playing field is a wide one – CENI, the elections body, received twenty-six potential presidential aspirant filings. Furthermore, one of Kabila’s major opponents, former Katanga governor Moise Katumbi, remains locked out of the country, marooned in neighbouring Zambia after about two years of a self imposed exile, blocked from entering the DR Congo by air or land and was unable to file to contest for the presidency, raising questions about the robustness of the political process. The most vital point to note is that it is unclear if Shadary can defeat the opposition in a free and fair vote, raising the prospects that a competitive election could lead to an outbreak of fresh violence. If a peaceful election occurs, unlikely given the circumstances, Kabila will hand over political power to a new president, gifting the DR Congo the opportunity to join an unfortunately short list of African countries where a peaceful transfer of power has occurred.