The week ahead – No silver bullets

28th February 2020

The first case of coronavirus was confirmed in Nigeria on Thursday, the country’s health minister announced — marking the first confirmed case in sub-Saharan Africa. Health Minister, Osagie Ehanire, said the case is an Italian citizen who works in Nigeria and returned to Lagos on Tuesday from Milan. He said the patient is being treated at an infectious disease hospital in Yaba. On its part, the Lagos State Government said it had activated the State Emergency Operations Centre to respond to the case and implement firm control measures.

The Ogun State Police Command has recommended that the policeman allegedly involved in the killing of the Assistant Captain of Remo Stars Football Club, Tiamiyu Kazeem, be dismissed. The command said the operative acted unprofessionally. The Inspector-General of Police, Mohammed Adamu, had on Monday asked the Deputy Inspector General in charge of the Force Criminal Investigation and Intelligence Department, Anthony Ogbizi, to investigate the matter. The late Tiamiyu’s family on Monday insisted that he was murdered and thereby called for justice on the matter. There were protests in parts of the state on Monday as residents took to the streets to show their displeasures over the matter. State’s Police Public Relations Officer, Abimbola Oyeyemi said the police management team paid a condolence visit to the family of the deceased on Monday, promising the protesters that justice would be done on the matter. Oyeyemi said the officer had been recommended for dismissal, adding that the police were awaiting approval from the Assistant Inspector General of Police zone 11, Ahmed Iliyasu, to carry out further action on the matter.

Borno state governor, Babagana Zulum, Wednesday advised the federal government to recruit an additional hundred thousand soldiers if Nigeria wants to defeat Boko Haram. He said the country cannot win the war with less manpower and inadequate funding. Zulum who spoke in Maiduguri when some members of the House of Representatives visited him, opined that the least FG could recruit to fight Boko Haram to a reasonable extent was 50,000 men from Borno. His words, “You cannot fight this insurgency to an end without technology and without manpower and without funding. “Take my words, they (the military) don’t have the manpower, they don’t have the equipment. Kindly advise the speaker and the senate president to tell Mr President to approve the massive recruitment of soldiers. We need about 100,000 more to be recruited into the Nigerian army. They should come and employ the locals whether they have western education or not.”

There are indications that the congestion at Nigeria’s major seaports; Apapa and Tin-Can in Lagos, is not ending anytime soon because of the growing number of overtime and abandoned cargoes, clearing bottlenecks and border closure. German shipping line, Hapag-Lloyd said shipping liners have to spend more than 25 days in Apapa Container Terminal before accessing the port to discharge their cargo. This is against the 20-day process recorded earlier in the year. Data from the shipping line on its January operational report also showed that the waiting time at Tin-Can Island Container Terminal, however, has remained at over 10 days, same as last month’s figure. Shipping liners waited an average of 10-15 days in the last quarter of 2019 to access the ports and discharge their cargo, as against the seamless process obtained at the ports before the congestion began. The Nigerian Ports Authority had reported that as of October last year, APM Terminals had overtime containers numbering 2,259 boxes, equal to 3,000 TEUs. According to BusinessDay, at Ports and Terminal Multiservices Limited in Tin-Can Island, overtime cargo occupies more than 30 percent of the commercial space, which analysts in the industry said is as a result of the failed management of Nigeria Customs Service to auction such containers. Among other situations, the border closure and the recent Lagos State policy on motorcycle movement in and out of ports, are making the situation unbearable, the Managing director, Gold-Link Investment, Tony Anakebe added. Since Nigeria closed its borders with the Benin Republic in August last year, most ships with Nigerian-bound cargoes that previously berthed in ports in neighbouring countries and their cargoes subsequently smuggled into the country now come through Nigerian ports, Anakebe said.

Nigeria’s power minister, Sale Mamman, has announced that the country will build the Mambila hydroelectric plant in Taraba state after the government settled the major problem; a legal dispute that was delaying the project. Attorney General, Abubakar Malami, is finalising the terms of the settlement, Mamman said. The contract for the Mambila project, which was initially estimated to cost $5.79 billion, was signed in November 2017 by Mamman’s predecessor, Babatunde Fashola, who said that the project would give Nigeria an opportunity to comply with the Paris climate change agreement as it would be delivering renewable energy and same time giving the country opportunity to unlock the gift of nature to Nigeria in Taraba. The project was first conceived in the 1970s and is expected to produce 3,050 megawatts of electricity, which is about a quarter of Nigeria’s current installed capacity. In another development, electricity distribution companies in the country said they have offered to return their licences to the FG on two different occasions. In reaction to a statement credited to power minister Saleh Mamman that DisCos should either show they have enough capacity to distribute electricity or step aside for other investors, the executive director of research and advocacy of the Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan said the FG refused the offer on both occasions. He added that as long as the regulator does the right thing that is consistent with the tenets of the agreement signed with the private investors, the FG is free to take any action as long as the rule of law is observed. There have been calls from various quarters for the FG to review the privatisation process that was held in 2013 resulting in the unbundling of the power sector.

Commentary

  • As estimated by the World Health Organisation (WHO), the coronavirus has a fatality rate of between 1 and 3%, meaning it far is less deadly than the Ebola Virus which has a fatality rate of between 50 and 80%. Nigeria handled the Ebola outbreak of 2014 very effectively, and those systems are largely still in place. The real concerns about consequences of the coronavirus outbreak include political and economic instability. On Monday, we published a report on the potential impact of the coronavirus on Nigeria’s economy, and the scenario we modelled appears to be playing out. The price of oil in the OPEC Basket was $55.88 as of 0300 WAT on Friday. This is below Nigeria’s budget benchmark. Nigeria’s weak economic growth since the recession ended has been largely driven by oil. If this global epidemic persists, or worse, escalates, Nigeria’s economy will face a major risk of losing momentum.
  • The people of Sagamu stood up for Tiamiyu Kazeem and forced the action of the police, amidst further bloodshed by trigger happy policemen in response to their protests. Are the policemen that shot protesters with live bullets in Sagamu being brought to book as well? The more fundamental problem is of rogue police departments rising – from the Kill and Go mobile policemen squads in the 1980s to the F-SARS of today. It is important to point out that Tiamiyu Kazeem was not killed by the notorious Special Anti-Robbery Squad (F-SARS), but by men attached to the Zonal Intervention Squad (ZIS). Having said that, the same thing applies. The lack of a system of consequences is responsible for the almost systematic killing and extortion of Nigerians run by police departments such as F-SARS, the anti-cultism unit, and the ZIS. While the recommendation to dismiss the police officer is a good one, it still does not get to the core of the issue which is how to disband such units and then reform the wider police force. We recall that the Vice President previously ordered the reorganisation of F-SARS, to no effect. It has become a well-worn cycle where the wider police force or specifically a member of the F-SARS unit kills an innocent civilian, spurring social media and offline outrage, followed by “disciplinary action” on the police officer. In the midst of all this, there are still very few ideas on police reform in Nigeria, especially with regards to increasing the size of the workforce, quality of training & improving the conditions of service. The biggest change in a long time was the passing into law of the Nigeria Police Trust Fund which will be funded by 0.005% of each company’s net profit. But this doesn’t touch wider issues around the accountability of previously allocated funds, the structure of the police that makes it bureaucratic and how to improve it beyond just funding. Even worse, rather than state governments using the political capital to push for police reforms, they are creating regional security agencies to “complement the police”. Until the police itself is reformed (including changing its structure such that it is more local than central) as well as improving the quality of training and conditions of service, we are afraid that any of the actions to reform F-SARS will not be fruitful.
  • While the governor is right that the military is overstretched in the state and will need a sort of troops surge, it is unlikely that simply increasing the troop numbers without addressing other issues (rotation of soldiers, quality of equipment and service conditions), will change the tide of the war in any significant way. Such a move will also continue to force the military to fight a conventional war against an asymmetrical enemy. The military is better off gathering human and electronic intelligence to identify high-value targets in the leadership of the terrorist group and eliminating them. A consistent application of this will put the terrorists on the back foot without having to massively increase troop numbers in the state.
  • A 2014 report by the American Journal of Industrial and Business Management on a Multi-Criteria Evaluation of Port Competitiveness amongst West Africa’s six largest ports placed Lagos port in fifth place behind Abidjan, Dakar, Lomé and Tema, with only Cotonou being behind Lagos. Positives for Lagos in the study were that the Lagos Port Complex has the longest berth and the largest terminal area. This would have been ideal for accommodating bigger ships and more containers but the port’s water depth was comparatively the worst at 9 metres (compared to Abidjan at 15 metres). Lagos, however, handled the most containers (1,623,141 TEUs) in the base year 2012; almost six times more than Lomé which handled the least (288,481 TEUs). Fast-forward just four years to 2018 and new data by Dynamar, a Dutch maritime intelligence and consulting firm shows that Lagos, having seen traffic dip by over 30% during the period, has been overtaken by the previous last-placed Lome. Nigeria’s loss has proven to be Togo’s gain as the country has persisted in transforming itself into a pivotal transit hub in the Gulf of Guinea, while things have stagnated at Lagos port due to a combination of decades of inefficiency and red-tape leaving room for corruption to thrive. It’s a lot of work to be done, but is the will to do it there?
  • The Mambila project is long overdue but successive governments have failed to make it a reality due to recurring problems of poor planning and corrupt self-interest. Presently, in a cash crunch period where even the rainy day Excess Crude Account has severely been depleted, Nigeria will be hard-pressed to provide its $1 billion counterpart funding for the $5.8 billion project. Due to the ongoing legal tussle, Nigeria risks a $2.3 billion fine over the proposed 3,050-megawatts facility, a similar figure to the ongoing P&ID scandal. This type of news is so commonplace in Nigeria that it is not even widely discussed anymore. But ignoring or not, the brutal fact is this: Nigeria does not have the ₦312 billion in cash required as counterpart funding for the project. We may have been able to borrow the money a few years ago. But given current macro conditions, it is unlikely Nigeria will be able to raise the money by borrowing. The most likely lender, the Chinese are already providing about ₦1,416 billion for the project and are unlikely to increase their exposure. This will require Nigeria to put up its counterpart funding in order for this project to survive. With regards to the distribution companies, their relationship with the government was doomed to breakdown once the Buhari administration signalled its unwillingness to follow through with its gradual tariff hike plan. The rhetoric that DisCos are to blame is simply unfortunate. Transmission bottlenecks, gas pricing, low investment in metering and the tariffs that do not incentivise distribution companies to make the requisite investments are the fundamental issues, in addition to consumer purchasing power problems that has kept Nigeria’s electricity industry remain in a dire state. These issues require decisive policy actions that the government is yet to untangle. There are no silver bullets.