The week ahead – Black oil

The Senate Committee on Petroleum Downstream said the country spent over ₦11 trillion as payment for outstanding subsidy claims in the last six years. The committee’s chairman, Kabir Marafa announced this following the adoption of the report of the committee the Promissory Note Programme and a Bond Issuance for Oil Marketers Outstanding Claims and the approval of the payment of ₦129 billion as outstanding subsidy claims to 67 petroleum marketers. However, the committee did not give details of how the ₦11 trillion was spent on subsidy claims. The Senate had on Tuesday, 4 June approved the sum of ₦69 billion as oil subsidy claim for Premium Motor Spirit for 19 oil marketers. Marafa observed that there were differences in submissions made by the Federal Ministry of Finance, PPPRA, and oil marketers. The report pointed out that all the subsidy arrears claims were based on three interrelated elements: subsidy, forex differentials and bank interests on unpaid claims.

The Presidential Panel on Special Anti-Robbery Squad (SARS) Reform has recommended the establishment of state and local government police forces. The recommendation among others was contained in a report submitted by the Executive Secretary, National Human Rights Commission (NHRC) and Chairman of the Panel, Anthony Ojukwu to President Muhammadu Buhari. The panel also suggested various reforms, including renaming the SARS as Anti-Robbery Section, which will operate under the Intelligence Unit of the Nigeria Police as it was hitherto and be more citizen-friendly. It also recommended the dismissal of 37 police accused of violating the rights of Nigerians from service and the prosecution of 24 others for abuses. According to Ojukwu, the panel received 113 complaints on alleged human rights violations from across the country and 22 memoranda on suggestions on how to reform and restructure SARS and the Nigeria Police in general. The panel also directed the Inspector General of Police to unravel the identity of 22 officers involved in the violation of the human rights of innocent Citizens and pay compensation of various sums in 45 complaints and tender public apologies in five complaints and directed to obey court orders in five matters. President Buhari on Monday, 3 June, ordered the Inspector-General of Police, Ministry of Justice and National Human Rights Commission to work out modalities for the implementation of the report of the panel on SARS reform within three months.

On Sunday, 2 June, Boko Haram captured Marte, headquarters of Marte Local Government Area in Borno. According to the Daily Trust, the insurgents stormed the Marte military base of the 153 Task Force Battalion, shooting sporadically and, in the process, “razed everything.” The paper cites a source as saying that the insurgents specifically captured the town without any intent to harm civilians. The soldiers were said to have been overpowered and fled in different directions, with some fleeing to Maiduguri. Casualty figures are unknown, and the Nigerian Army is yet to confirm the incident.

No fewer than 13 people were killed as security forces opened fire in an attempt to break a sit-in staged by democracy protesters in Khartoum, the Sudanese capital. According to the Central Committee of Sudan Doctors, security forces used live ammunition inside East Nile Hospital in Khartoum where some of the wounded were being treated. Troops from Rapid Support Forces had tried to use sound grenades to disperse the protesters, but soldiers resorted to live ammunition to disperse the remaining protesters. Protesters also said that the soldiers burnt the tents used at the sit-ins, blocked the entrance to the site and fired live ammunition randomly at the protesters.

Commentary

• If the figures are correct, then Nigeria’s average annual spend on petrol subsidies comes to ₦1.83 trillion. To put this in context, this represents 20.5% of Nigeria’s recently approved 2019 budget of ₦8.92 trillion (the government had budgeted only ₦304 billion for petrol subsidies), of which ₦1.60 trillion is expected to be funded through new borrowing whilst ₦2.14 trillion was pencilled for debt servicing. Still, this does not paint the whole picture, because whilst the expenditure side of the budget is likely to be exceeded, the revenue targets are unlikely to be met as the budget was conceived with benchmark oil production of 2.3 million barrels per day at a price benchmark of $60. At present, the country’s oil production barely exceeds 1.9 million barrels per day and oil prices currently hover just around $60 per barrel. In addition, there are reports that the Federal Inland Revenue Service will miss revenue targets, again. In previous years, the Central Bank of Nigeria stepped in to fund the FG largely through spreads made from its multiple foreign exchange rates, but with reports that the CBN’s own balance sheet has a gaping hole (which has forced the regulator to stop publishing its annual reports), it is hard to see how this year’s budget will be implemented.
• Nigeria’s security architecture, including its policing, is severely broken, and change is well past its due date. State policing was a core part of the APC’s campaign promises in the lead up to the 2015 elections. While this was not achieved in President Buhari’s first term, we want to believe these are the first steps towards achieving it. While we, however, do not agree with the prospect of handing over 36 dysfunctional police forces to 36 potential abusers, the conversation about at least more community based policing must happen and must be followed through. The means, of course, remains via a constitutional amendment which will involve a super-majority in the National Assembly as well as majorities in two-thirds of the country’s 36 state assemblies – a tall order. It would be interesting to see if other salient issues around structural political and economic reform are incorporated into the constitutional reform process. We will keenly observe this process and urge stakeholders to do the same to ensure that the right framework to achieve this while safeguarding it against potential abuse at the state and local government level are put in place.
• As we pointed out in our 2018 report, The Road to Maiduguri, there would be a continuation of attacks by ISWAP/Boko Haram in the general direction of Maiduguri. This attack, if confirmed, is yet another representation of that thrust, and for the insurgents, the clear target is the military, both to increase their territory, and to acquire weapons and ammunition. The mounting military losses is worrisome, as well as the lack of a statement as of the time of writing this editorial. There is a need for the military to acknowledge its weaknesses, and review its war strategy in order to reverse the trend of losses. Failure to do so will see ISWAP start to control ever increasing tracts of territory, and place both Maiduguri and Damaturu within striking distance of the groups.
• The pro-democracy protesters are clearly trying to avoid an Egypt-like situation where the military takes advantage of the unseating of an autocrat to assume the reins of power. Despite its heavy crackdown on dissenting voices, the military still capitulated to the protesters and scheduled elections nine months away rather than an initially proposed three-year period. It remains to be seen if the protesters will keep up the pressure to ensure the military fulfils its commitments. A curious situation also appears to be developing on the diplomatic front. Although the African Union has suspended Sudan, there has been no effort by regional African powers – especially Nigeria and South Africa – to exert any form of influence in shaping the facts on the ground. It appears they have ceded area of influence to Arab countries such as Saudi Arabia, Egypt and the United Arab Emirates. While this is altogether unsurprising given the strong cultural, religious and economic links between North African countries and Middle East, this interference by non-African countries is perhaps the most poignant commentary on the current state and strength of pan-African diplomacy.