The week ahead – Here and present

The Economic and Financial Crimes Commission is investigating MTN Nigeria over the listing of its shares on the Nigerian Stock Exchange. According to a statement on the NSE’s website, MTN’s Company Secretary, Uto Ukpanah said the firm received a letter on 23 May, from the financial watchdog requesting information and documentation related to the listing of its shares. This is the latest in a series of disputes in the African wireless carrier’s largest market. While MTN has not been accused of any wrongdoing by the financial crime agency as the firm received all regulatory approvals required to the listing, the company’s Lagos head office was raided by the crime agency on Friday in connection with the probe. The listing was itself a condition of a settlement reached with the telecommunications regulator in 2016 over the handling of customers without proper documentation, while MTN is also fighting a claim that it owes $2 billion in back taxes. MTN Nigeria’s stock has slowed after initially jumped 41 per cent in its first six days of trading. The company is the second largest listed company in the country after Dangote Cement.

The investment of Chinese companies in Nigeria’s economy has increased to $20 billion, according to the President of the China Chambers of Commerce in Nigeria (CCCN), Ye Shuijin. There are 160 Chinese firms operating in the country, Shuijin said, which employed over 200,000 Nigerians and promoting the ‘people to people’ cultural diplomacy of the Chinese Belt and Road Initiative in Nigeria. Shuijin said the CCCN has also worked with the Industrial Training Fund to train over a thousand Nigerians last year and have similarly trained 350 more in agriculture export, including sponsorship of 30 students to China on scholarship as part of the advanced capacity building for Nigerians. Noting the difficulties the firms experienced during the 2015 recession, Shuijin said they could not pay their workers because they were owed by the FG, which is yet to clear the debts for various projects. He said that the FG still owe the firms that constructed the Murtala Muhammed expressway project in Abuja, which was completed in 2010.

Premium Times reported that at least 11 villagers died after they were forced out of their homes last week by Nigerian soldiers to makeshift homes in Damboa village of Borno State. Last week, the Nigerian military ordered the residents of Sabongari, a community 150 km west of Maiduguri, to evacuate the agrarian village ahead of “a special military” operation. The army said the operation was targeted at Boko Haram insurgents in the neighbourhood. The evacuation led to an outcry by the residents who complained that they were not given time to gather their belongings and prepare for life in an IDP camp. The evacuated residents said that they were taken in 15 buses to Damboa and dumped in an abandoned primary school. The dead were mostly children as up to 10 died from exposure following heavy rainfall on Saturday night. Another person died when soldiers began shooting in celebration of arresting two Boko Haram fighters, one of whom was an amir (commander). The displaced persons said neither the Borno State Government nor their local government council had offered any assistance since their arrival.

Theresa May announced her decision to resign as the British Prime Minister last Friday. Ms May announced that she will quit as the leader of the ruling Conservative Party and Prime Minister on 7 June. She had been battling hard to get the British parliament to agree to her Brexit deal for the UK to quit the European Union, and said she had “done my best” to honour the 2016 EU referendum result where Britons voted to leave the EU. Ms. May said it would remain a matter of “deep regret” that she had been unable to deliver Brexit. Her exit paves the way for the ruling Conservative Party to choose a new leader who would assume office as prime minister, and 11 people have publicly declared their intention to stand for the party leadership.

Commentary

• The salient question is this – all the documentation that the EFCC may require about this listing will already be in possession of the regulatory bodies that assented to the listing – the NSE as well as the Securities and Exchange Commission. It is, therefore, mind-boggling that the EFCC will not only write MTN with its request but will go as far as raiding their offices. The optics of this needless saga is incompatible with the government’s rhetoric commitment to promoting the ease of doing business. Nigerian regulators and government agencies simply cannot continue to make life unnecessarily difficult for successful Nigerian enterprises, especially in a period when foreign equity investment in the country is at a decades-long low.
• Chinese investments in Africa divide opinions as those on either side of the divide have strong arguments. The proponents can point to access to cheap credit, foreign direct investment and manpower development without preconditions, something that Western countries do not provide (China pledged an additional $60 billion last year). In return, China gains access to natural resources and vast markets to dump cheap (and sometimes low quality) goods – both of which keep China’s huge manufacturing sector busy and its people employed. Critics of China’s investment plan state that such funds could burden developing nations with unsustainable levels of debt and allege that a new colonialism is taking hold on the continent – a claim that has been strongly refuted by African leaders. For Nigeria, which currently enjoys about 17% of all Chinese investment on the continent, the government sees China as the only means of delivering expensive infrastructure projects like airports and railways particularly as its revenue is tied down to paying salaries, subsidies and existing debt. Thus, it is likely that China’s influence on the continent will continue to grow.
• In theory, it is understandable that the situation necessitated the evacuation of the villagers, the execution left a lot to be desired. This is coming at a time when the army plans to launch a renewed offensive against Boko Haram, and as a result, needs the support of the local populace if it is to succeed. Moves like this present the image of an army which is insensitive to the people it is pledged to serve, making their support less likely. Botching a routine logistics operation, and the rather callous aftermath calls into question the level of commitment to relief operations by various arms of the government. There is an excessive reliance on non-governmental organisations to provide relief and perform the functional role of the government in Borno, and we fear for the future when those NGOs leave. We urge the government and the army leadership not to sweep this incident under the rug but to investigate it thoroughly and bring all those within its ranks who are responsible for these needless deaths to book. In a related development, the arrest of the amir, while commendable, shows a gaping hole in the military’s strategy. It appears that there is no operational emphasis on the capture or killing of those in the leadership of Boko Haram, a strategy which will do more damage to the organisation than the random killing and capture of all BHT members. The recent efforts of the group in demoralising the military with the recent release of pictures and videos showing the execution of captured Nigerian soldiers makes this an absolute imperative.
• The resignation of Ms. May was long expected as her Brexit proposals continued to suffer defeat in the Parliament. It shows the schism within her party and the British public on how best to achieve the exit of the United Kingdom from the European Union. It remains to be seen who will succeed her, although former Foreign Secretary and prominent Brexiter, Boris Johnson appears to be in pole position. If he succeeds her, it is likely that his Brexit proposals will be radically different from hers as compromise is not known to be his best suit. The current impasse over how to exit the European Union, however, has not yet impacted Nigerian-British trade as export flows from Nigeria, chiefly crude oil, remains at previous levels. While there is potential for increasing non-oil exports such as tropical agricultural produce, all that will have to wait for London and Brussels to ink a successful deal.