Data from the National Bureau of Statistics showed that Nigeria’s inflation increased by 11.98 percent in December 2019 due to the rise in the composite food index which rose by 14.67 percent in December. This is higher than the 11.85 percent recorded in November. The consumer price index, which measures inflation, witnessed a 0.05 percentage change for the twelve months period which ended in December 2019. The report said that the urban inflation rate increased by 12.62 percent year-on-year in December 2019 from 12.47 percent recorded in November 2019, while the rural inflation rate increased by 11.41 percent in December 2019 from 11.30 percent in November 2019. The rise in the food index was caused by increases in prices of Bread and cereals, Meat, Fish, Oils and fats, Potatoes, yam, and other tubers. The average annual rate of change of the Food sub-index for the twelve-month period ending December 2019 over the previous twelve-month average, the NBS said, was 13.74 percent, 0.09 percent points from the average annual rate of change recorded in November 2019 13.65 percent. The breakdown according to states showed that food inflation on a year on year basis in Sokoto was 17.75 percent, Ogun 17.37 percent and Plateau 16.75 percent. Bayelsa 13.26 percent, Delta 12.72 percent and Bauchi 12.19 percent recorded the slowest rise in the period.

The National Bureau of Statistics’ data showed that Nigeria’s state governors shared the sum of ₦2.53 trillion in gross allocations from January – November 2019. The report indicated that the revenue crisis the country faced in 2019 took its toll on the federal allocation pot, as the allocated funds to states for the period under review dropped by ₦49.56 billion. Specifically, federal allocation disbursed to states dropped to ₦2.53 trillion in 2019, from ₦2.58 trillion allocated within the period in 2018. The breakdown of allocation disbursed showed that Delta, Akwa Ibom, Rivers, Lagos, Bayelsa, Kano, Kaduna, Edo, Katsina, and Imo were the top 10 states that received the largest portion of the federal allocation. Major oil-producing states suffered a decline in the allocation even though Delta remains the biggest recipient with a paycheck of ₦214.4 billion. But the allocation to the state dropped by ₦1.05 billion when compared to ₦215.4 billion received in 2018. Akwa Ibom maintained the second spot with a total sum of ₦169.79 billion but also saw a ₦27.8 billion drop in its allocation compared to 2018. Rivers ranks third on the list with a gross allocation of ₦154.5 billion, a ₦15.3 billion decline from the ₦169.8 billion received in 2018. Lagos, bucking a general trend, witnessed a rise in its federal allocations from ₦143.9 billion in 2018 to ₦152.4 billion. Other states among the top 10 recipients are Kano (₦82.3 billion), Kaduna (₦66.9 billion), Edo (₦66.5 billion), Katsina (₦62.5 billion) and Imo (₦62.1 billion).

Policemen, on Tuesday, barricaded the venue of a protest against the FG’s position declaring the establishment of Operation Amotekun as illegal. The South-West regional security outfit had been described by the justice minister, Abubakar Malami, as illegal. In a related development, the northern herders’ group, the Miyetti Allah Kautal Hore said the support for Amotekun showed how “primitive” people of the Yoruba ethnic group are in politics. Its National Secretary, Alhassan Saleh told Channels Television on Monday that the security effort by the state governments of South-West Nigeria amounted to an “ethnic army” and showed the Yoruba people as “not tolerant to opposition.” When asked if he told a national newspaper last week that support for Amotekun could cost the South-West the Presidency in 2023, Saleh confirmed but said the comment did not amount to blackmail.

The Transmission Company of Nigeria restored power to Maiduguri and its environs in Borno on Tuesday after they were left in darkness over damage to electricity transmission networks by Boko Haram insurgents. A TCN spokesperson, Ndidi Mbah, had said that Maiduguri and its environs were cut off from the National Grid. Mbah said that the 330kv transmission line between Maiduguri and Damaturu was badly affected, adding that the Damboa-Maiduguri 132kv transmission line was been disconnected from the grid for the same reason. “TCN has located the fault on the Maiduguri-Damaturu line and has arranged to repair the line. Consequently, bulk electricity would be restored to Maiduguri on or before January 20, 2020,” she said. The attack on transmission lines came as the UN confirmed that heavily armed jihadists carried out an “extremely violent” attack on a vital aid facility housing United Nations workers in Ngala, a border town in Borno. No aid workers were harmed in the assault, but according to a military source, a soldier and four assailants died in the ensuing gunfight. The Islamists group in several trucks fitted with machine guns stormed the humanitarian hub near a camp holding 55,000 displaced people in the remote town, humanitarian and military sources said.

Commentary

  • The March 2019 interest rate cut to 13.5% by the CBN Monetary Policy Committee signalled a fundamental shift in focus of monetary policymakers from inflation control to growth. This shift, along with Mr Buhari’s successful reelection campaign, appears to have given the government more room to impose the President’s economic stance, hence the border closure to deal with smuggling and thus eliminate fake demand of refined petrol rather than deregulating the sector and eliminating subsidies. Thus, despite rising food inflation caused by the border closure, Mr Buhari recently stated in the UK that Nigerian farmers have been celebrating the closure which has drastically reduced smuggling of agricultural produce as well as arms and ammunition, and attributed the country’s food security position to the “very good last three rainy seasons;” the FG’s reduction in the price of fertilisers by 50 percent and the presidential directive to the CBN not to give foreign exchange for food imports thereby saving the nations billions of naira. Clearly, there is no end in sight to the border closure policy, and Nigerians will have to continue to endure high inflation, especially in food prices while grappling with the reduced quality in what is available in the market at these elevated prices.
  • Most of the variables – the foreign exchange rate, oil production and global crude prices – that impact on government revenue remained relatively stable between 2018 and 2019, unlike in the preceding years when one or more of these variables saw significant change. The last two years, therefore, provide perhaps the most suitable year-on-year basis for comparing government revenues we have had in a long time. A review of FAAC allocation data over 2018 and 2019 reveals that only in four months of 2019 did total derived revenue exceed that of the corresponding month in 2018, and in each of those cases bar July, the difference did not exceed ₦100 billion. In all the months in 2018 that exceeded their 2019 equivalents, the difference was a lot more significant – in November alone, the gap was ₦153 billion. Added to this mix is that last Friday, the DMO said that the total debt owed by the FG and the states rose by 2.02 percent to a total of ₦26.22 trillion in 12 months ending 30 September 2019, compared to ₦25.7 trillion owed in the same period in 2018. Essentially, the Nigerian state is borrowing more, but it has less to share. It is not a good recipe for sustainable governance.
  • The FG cannot continue to use force to attempt to whip all the states into line – it simply does not have the capacity to, as events in the North have shown. It also does not have the overwhelming monopoly of force that it once enjoyed, making a more dialogue-led approach the workable option. Operation Amotekun has in many ways, become a rallying point for the South-West, and has to be seen from the angle of the rights of states and regions within Nigeria’s ‘federal’ structure. It is not surprising that it has taken an ethnic slant, going by the war of words between the prominent voices in the SW and the Miyetti Allah Kautal Hore association – this is an evidence of how far trust between the social groupings that make up the country has broken down. As Nigeria’s democracy matures, it is inevitable that Nigeria’s constituent units will begin to question the rights that the 1999 Constitution bars them from exercising, many of these rights crucial to fulfilling their responsibilities to their people. Amotekun is only a manifestation of one such right – the right to secure life and property, and it speaks to a clear failure of the current system that concentrates policing in the hands of the FG. The security project is bringing up discussions that have persisted in the Nigerian political space for decades due to the unwillingness of politicians to confront them. One school of thought fears that the success of Amotekun will be a litmus test for cooperation and agitation for more rights amongst southern states; another school of thought is of the opinion that it will spur the creation of similar outfits across the country, which in itself is a slippery slope down into anarchy. We expect more of such expressions to come up over the coming years, as states assert themselves more and more. Nigeria will be forced to renegotiate its constitution. It is no longer an if, but when and how soon the FG will succumb to the inevitable. Under the current dispensation, the distrust that has led to self-help is a natural direction. It is inevitable that for Nigeria to be assured of its long-term existence, its federal structure has to be reviewed to be more reflective with its intent by devolving more power for the centre to the states. These issues need to be addressed and quickly, at the negotiating table.
  • The attack on the power lines comes at a time that there are increasing attacks on the Maiduguri-Damaturu Road, which is the safest access point into Maiduguri (Maiduguri-Damboa-Biu Highway is completely closed down while the Maiduguri-Bama Road through Gwoza to Yola is only passable with military escort). If the Maiduguri-Damaturu Road becomes more insecure, it risks cutting Maiduguri off entirely from the world with the city being completely encircled by the terrorists, which will embolden them to either attempt reentry into the city or at least, intensify attacks on the outlying neighbourhoods. It is very important to restate the need for the military to revise its COIN strategy, with a focus on increasing troop numbers & redeploying fatigued troops, with supplying working equipment in order to effectively battle the terrorists.