Daily Watch – ECA dwindles to lowest point, Borno asks for 100k extra troops to end Boko Haram

The Nigeria Customs Service, in Kano and Jigawa states, has warned that it will shut down supermarkets and shops found patronising foreign rice and other prohibited items. This is contained in a letter dated 17 February 2020 to all supermarkets and shops in the state. The decision, the agency said, was meant to suppress the smuggling of prohibited items in the interest of the nation’s economy and security. However, the NCS did not indicate when the operation will take effect. The Customs officials and other security agencies in the Jigawa border, since the border closure, have been having a running battle with suspected smugglers who have been devising other means in smuggling prohibited items.

Figures from the Federation Account Allocation Committee have shown that the balance of Nigeria’s excess crude account dropped by $253 million between January and February this year to $71.81 million. As at the end of the FAAC meeting on 16 January, the amount in the ECA was put at $324.96 million. The ECA, created by former President Olusegun Obasanjo in 2004 for the purpose of saving oil revenue in excess of the budgeted benchmark, had a balance of $20 billion in January 2009. However, persistent demands by states to fund various programmes and the inability of the FG to generate adequate revenue to fund its operation had put pressure on the FG to deplete the account. Various administrations have also used funds from the ECA for petrol subsidy payments and distributed among the three tiers of government to augment revenue shortfalls. A report released by the IMF in April 2019 had ranked Nigeria the second-worst in the world in the use of sovereign wealth funds. The development on the ECA flies in the face of a warning by the Monetary Policy Committee of the CBN on 24 January that the government should build fiscal buffers to cushion the economy from volatility.

Trading on the Nigeria Stock Exchange Thursday recorded its first gain for the week with the market indices improving by 0.17 percent. The All-Share Index rose by 45.83 points or 0.17 percent to close at 27,568.91. This is compared with 27,523.08 recorded the previous day. The market capitalisation improved by ₦24 billion to ₦14.362 trillion against ₦14.338 trillion on Wednesday. The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; BUA Cement, C & I Leasing, United Capital, Africa Prudential and Ikeja Hotels. Analysts at Afrinvest said that there remain opportunities for bargain hunting, however, it is expected that the equities market to close the week in the red. AIICo Insurance and Ikeja Hotels led the gainers’ chart in percentage terms, gaining 10 percent each, to close at 99k and ₦1.21 per share, respectively. United Capital followed with a gain of 9.94 percent to close at ₦3.54 per share. Wapic Insurance improved by 9.68 percent to close at 34k, while the Associated Bus Company appreciated by 9.38 percent to close at 35k per share. Law Union and Rock Insurance and SFS Real Estate Investment Trust (SFSREIT), on the other hand, led the losers’ chart in percentage terms with a loss of 10 percent each, to close at 81k and ₦76.95, per share. In all, investors traded 484.99 million shares worth ₦3.59 billion in 4,187 deals.

The Borno state governor, Babagana Zulum, has suggested the recruitment of 100,000 additional soldiers to end the long-running insurgency by the Islamist Boko Haram group. As the governor of the state at the epicentre of the violence said the insurgent group has inflicted “horrific and simultaneous attacks” in the state since March 2019, adding that the Nigeria military does not have the manpower and the equipment to fight the group which has birthed other factions of insurgents unleashing violence of various degrees on people and the northeast. Despite efforts by the FG to end the insurgency that is estimated to have killed more than 30,000 people in 10 years, the violence keeps increasing. Some of the gains from a 2015 surge have been reversed as the militants reportedly benefit from a steady flow of arms from Libya across the Sahara Desert and an alliance with Islamic State. Government troops, meanwhile, complain of poor equipment and low morale. The Nigerian army is currently 200,000-strong, with troops deployed in 35 of the country’s 36 states to contain various levels of unrest.