President Muhammadu Buhari has ordered that all loans received from government institutions be given a three-month moratorium. The president announced the directive during his state broadcast on Sunday. The moratorium is applicable to loans issued by the Bank of Industry, Bank of Agriculture, Nigeria Export-Import Bank, TraderMoni, MarketMoni and FarmerMoni. “For on-lending facilities using capital from international and multilateral development partners, I have directed our development partners and negotiated concessions to ease the pain of the borrowers,” the president said. “For the most vulnerable in our society, I have directed that the conditional cash transfers for the next two months be paid immediately. Our internally displaced persons will also receive two months of food rations in the coming weeks.” Buhari also urged Nigerians to support the vulnerable in their communities with “whatever they may need”. Zainab Ahmed, the minister of finance, budget and national planning, had earlier said the government was working to identify vulnerable people in the society to whom stipends would be given. As at last night, Nigeria had recorded a total of 184 confirmed cases of the disease.
Nigeria’s central bank has suspended foreign exchange sales to retail currency traders, a senior bureau de change (BDC) official said, to help protect the naira after a devaluation following the coronavirus outbreak and a fall in oil prices. The central bank last week moved the currency rate for BDC to ₦380 to the U.S. dollar from the previous ₦360. It subsequently adjusted the naira’s official rate to ₦360, weaker than its previous peg of ₦306, implying a 15% devaluation. Since the currency adjustment, the naira has weakened further. It fell to a new low of ₦361 to the dollar on the official market and hit ₦383.25 on the over-the-counter spot market on Thursday. Nigeria, which is Africa’s biggest economy and its largest oil exporter, has confirmed 46 coronavirus cases, with one death. It has banned entry to arrivals from countries that have reported more than 1,000 coronavirus cases. “Until borders are opened, there is no way anyone can provide genuine travel documents we can rely on,” the BDC official said on Thursday, adding that some of the countries visited by Nigerians were in lockdown. “The implication is that the currency could weaken on the black market. If you stop the official source then the black market would thrive.” The naira came under pressure after oil prices fell following a disagreement between Russia and Saudi Arabia over a deeper production cut. The coronavirus outbreak has also hit global demand for oil.
Nigeria’s federal government has declared as illegal the lockdown of some states and the closure of their borders by their respective governors in an effort to curtail the spread of coronavirus pandemic in the country. Reacting to the reports of Nigerians being trapped in the border communities of some states as a result of the various governors’ directives, the secretary to the Government of the Federation, Boss Mustapha said that the lockdown announced by President Buhari on Sunday to stop the escalation of the coronavirus pandemic only affected the Federal Capital Territory, Lagos and Ogun States. This is coming after the disclosure of the Ogun governor Dapo Abiodun that the state government had obtained permission from the presidency to begin the lockdown of the state on Friday instead of 11 pm on Tuesday as ordered by President Muhammadu Buhari. Mustapha, who is the chairman of the Presidential Task Force for the Control of the Coronavirus-19 Disease, at a press conference in Abuja said the lockdown by Anambra, Bayelsa, Benue, Delta, Ekiti, and Osun that has left travellers in agony was illegal.
At least 18 Boko Haram commanders have been killed in airstrikes around the Lake Chad area by the Nigerian Air Force, according to reports. Ahmed Salkida, a journalist with strong intelligence on terror groups in West Africa, made the disclosure on HumAngle.ng, an online news publication. HumAngle reported that airforce bombardments of insurgents between January and March 2020 have led to the death 18 of ISWAP’s prime war commanders, a group Boko Haram pays allegiance to. The publication highlighted the fact that the military has carried out a series of sustained targeted airstrikes of the positions of ISWAP and Boko Haram following a return of the dry season. It claims that a further 25 leaders have lost their lives between October 2019 and March 2020, with an additional 13 ISWAP leaders between January and March 2020 as a result of a sustained internal feud. This comes as the Army redeployed General Olusegun Adeniyi, who appeared in a viral video urging military authorities to supply them with weapons and accurate intelligence to combat Boko Haram terrorists in the North-East region. Adeniyi, who is Theatre Commander of Operation Lafiya Dole said his men were outgunned and ambushed while on an operation in Borno. A massive shake-up within the army has led to the redeployment of over 50 senior officers.
- All of these are welcome palliative measures to ease the suffering of those who need them the most in this period when they are most vulnerable. The devil, of course, is in the implementation detail as we have seen from various other such palliative measures during trying times. In a country where most people earn a daily income, the biggest worry of the majority of those who are affected by the stay-at-home directive is how they will eat during this period. Already, food prices have doubled in many parts of Nigeria, increasing pressure on whatever reserves people may want to draw on to buy food. If people have to make the choice between certain hunger and possible COVID-19 infection, the choice will be clear, and this showed in the fact that less than 48 hours into the lockdown, a government official announced the loosening of the lockdown. In the formal sector, Nigerian stocks wobbled to an eight-year low during the week as the lockdown of the country’s two main cities continues to bite. While it is not a good look for a lower-level official to appear to countermand the President’s nationally televised order, the truth is that the easing of restrictions is simply the authorities coming to terms with the fact that only 63% of Nigerians have any discretionary income. Unfortunately, the forced hand of the government also means that we have increased the scope for the markets, which are already unsafe from a health perspective, to become super incubation centres for COVID-19 and other opportunistic infections as social distancing is impossible in those places. In that regard, this qualifies as a setback.
- The CBN’s default reaction to weakening Naira to USD rates has always been demand management. The reality is that Nigeria runs a dual currency economy – one on the Nigerian Naira and the other on US Dollars. New CBN data shows that Nigerians spent $12 billion on personal and business travel allowances in 2019, up from $7.6 billion the previous year. Nigerians also spent another $6 billion on education-related expenditure in 2018. A move like this by the CBN, therefore, is no surprise. After years of refusal to devalue the Naira, the CBN has been forced into taking this decision after a crash in oil prices and depletion of the foreign exchange reserves. This week, Bonny Light reached an 18 year low of $18.50 per barrel and in spite of offering significant discounts, Nigeria is still unable to find buyers. To compound this, the world is nearing storage capacity for unsold oil cargoes, and there are stakeholders that believe that if this persists, oil may well enter negative trading territory. All of these mean one thing – the slump in oil prices is likely to persist and Nigeria’s foreign exchange earning capacity will continue to be diminished. On the back of weak foreign reserves, a low Excess Crude Account and tepid domestic growth, these demand management measures are insufficient, and we expect the Naira to weaken significantly further and fall below ₦400 to the dollar. However, with the issues around COVID-19 expected to linger for months, it is unlikely that usual travellers will be taking summer vacations in Europe this year. The chickens of Nigeria’s bad policy choices over the years are coming home to roost and the waste of the crisis that led to the 2016 recession will now come back to haunt us.
- On the legality of state lockdowns, the Federal Government is spot on. Nigerian states do not have borders – they have boundaries, and even the determination of those boundaries is not within the states’ powers – a federal agency exists to take care of such matters. Furthermore, none of the states that declared border closures have the control of security forces that are needed to enforce such orders. The pronouncements by state governments to close down state boundaries and international borders around their states were largely attributable to the slow pace of decision-making from the Federal Government in restricting movements in order to contain the spread of the virus. While the states acted at the time due to the perceived inaction of the Federal Government in a situation that required decisive action, this action by the states, Ondo being the latest after the FG had already declared such actions illegal, could establish a dangerous precedent in how states encroach on powers exclusive to the Federal Government. We cannot but use this to highlight the need for states to become more strategic in their demands for the devolution of powers, whittling down the Executive Legislative List and long-term restructuring. Until then, moves like this will be illegal and will be rightly declared so.
- The Nigerian Air Force is increasing aerial bombardments on ISWAP positions, and this coincides with a surge in attacks on the terrorists by the Chadian military from its sector in fulfillment of President Idriss Débys promise that the recent killings of 100 Chadian soldiers will not go unpunished. However, the ground offensive on the Nigerian side against the terrorists still leaves a lot to be desired, especially in the aftermath of the recent ambush on the Nigerian Army that left many soldiers dead. This ambush has been blamed on perennial problems such as the poor state of weapons and equipment used by the military (such as adequate armored transport rather than transporting them in soft skin vehicles) and faulty intelligence. It was these problems that led to the viral video by the immediate past sector commander, Major General Olusegun Adeniyi who appealed for better equipment in order to take the fight to the terrorists. We cannot conclude that the redeployment of General Adeniyi is a response by the military high command to the video which was said to have leaked, and has severely embarrassed the military. They may as well have been routine deployments which had been planned even before the leak. In any case, unless the army is better armed and equipped, the appointment of yet another new sector commander alone will hardly change the fortunes of the army against the terrorists. Although aerial bombardments are effective, they can only work to a certain degree; a ground offensive against the terrorists is an operational imperative. A final word on General Adeniyi: under his command, the Army has recorded significant casualties in the northeast over the last few months and he was obstructive of humanitarian operations. We hope that General Faruk Yahaya, his replacement, will pursue a new tack.