Nigeria’s unemployment rate rose from 27.1% in the second quarter of 2020 to 33.3% in the fourth quarter of 2020, the latest figures from the National Bureau of Statistics said on Monday. A third of the 69.7 million-strong labour force in Africa’s most-populous country either did nothing or worked for less than 20 hours a week, making them unemployed, according to the Nigerian definition. Another 15.9 million worked less than 40 hours a week, making them underemployed. The combined unemployment and underemployment rate for the period was 56.1%. In other economic news, Nigerian inflation hit a four-year peak in February as food prices jumped more than 20 percent, heaping financial pressure on households already faced with a shrinking labour market and a stagnant economy at a time of mounting insecurity. Inflation, in double digits since 2016, reached 17.33 percent, driven by the impact of a coronavirus epidemic that has also induced a drop in the price of oil, Nigeria’s main export, and weakened the naira. Nigeria’s finances were knocked by last year’s drop in the price of oil, which accounts for 90% of foreign-exchange earnings and about half of the government’s income. More than 60% of Nigeria’s working-age population is younger than 34. Unemployment for people aged 15 to 24 stood at 53.4% in the fourth quarter, and at 37.2% for people aged 25 to 34. The jobless rate for women was 35.2% compared with 31.8% for men.

Six state governments: Akwa Ibom, Anambra, Cross River, Delta, Edo and Oyo have said they will not donate any land to be used as grazing reserves for herdsmen under the National Livestock Transformation Programme (NLTP). They said they did not have any land to donate to the initiative. They stressed that any individual who wanted to go into ranching should rather look for land to buy. 17 Northern states and the Federal Capital Territory (FCT), as well as three southern states, Ebonyi, Ekiti and Ondo, have signed up for the programme. Ondo Governor Oluwarotimi Akeredolu, issued a caveat to his state’s participation in the NLTP; telling a delegation of Food and Agriculture Organisation (FAO) in Akure that his administration will not give land to herders across the 18 local councils of the state. The Federal Government in February said it had mapped out 30 grazing reserves across the country for the planned implementation of the NLTP. The government said the implementation of the programme would result in a lasting solution to the farmer-herder crisis in the country. The Senior Special Assistant to the President on Agriculture, Dr Andrew Kwasari, said in a statement, “And every state that adopts the NLTP, it is to its own reality. It is not conscription, but if they do it this way, it will modernise livestock and crop production, remove conflict, create dialogue, and create cohesion in communities.” In 2018, the Vice President, Prof. Yemi Osinbajo, had inaugurated the NLTP at the Gongoshi Grazing Reserve in the Mayo-Belwa Local Government Area of Adamawa State. He said the plan was designed to run from 2019 to 2028 as a collaborative project among the federal and state governments, farmers, pastoralists and private investors. This comes as the European Union has written a letter to the World Trade Organisation to complain about Nigeria’s milk and dairy restriction policy. Ngozi Okonjo-Iweala, the WTO’s Director-General told the Central Bank of Nigeria during a visit there on Tuesday. The CBN had in July 2019 included milk and dairy products on its list of items not eligible for foreign exchange. This led to restrictions in the importation of milk into Nigeria, as the commodity was classed among such agro-products as tomatoes, rice and others.

Eni SpA, Royal Dutch Shell and several of their current and former executives were acquitted of corruption charges related to a Nigerian oil deal by a court in Milan. The verdict ends a three-year legal saga that loomed large over the tenure of Eni Chief Executive Officer, Claudio Descalzi, who was among those found not guilty on Wednesday. Italian prosecutors had sought an eight-year jail term for him. Several former executives of the companies were also cleared of wrongdoing, including Malcolm Brinded, who ran Shell’s exploration and production division at the time, and Paolo Scaroni, who was Eni CEO before Descalzi. The ruling is a blow for Nigeria’s government, which joined the case as a civil party in 2018 and was seeking compensation. Prosecutors had charged that executives involved in the 2011 deal to secure Offshore Oil Prospecting License 245 knew that much of the $1.1 billion they deposited into an escrow account controlled by the Nigerian government would be disbursed as bribes. Yet several of their key witnesses failed to back up those allegations when called to testify. The companies and executives accused have consistently denied any wrongdoing. In 2018, two middlemen were found guilty of corruption in a separate trial. A representative of the Federal Republic of Nigeria said the country will wait to review the Italian court’s written judgement before considering its position. In Italy, sentences aren’t definitive until appeals are exhausted. It could take years before there’s a final decision. The verdict is also a setback for Global Witness, the non-governmental that seeks to expose corruption and human-rights abuses around the world. The group uncovered documents that informed the Italian prosecutor’s decision to take up the case. The verdict doesn’t end the legal woes for Shell related to its Nigerian operations. In January a court in the Netherlands ruled that the Anglo-Dutch major was liable for damages from pipeline leaks in Africa’s most populous country. A few weeks later, the U.K.’s Supreme Court ruled that thousands of Nigerians can sue Shell in London over pollution.

Kenya withdrew from an International Court of Justice (ICJ) case on a maritime-border dispute with neighbouring Somalia and is seeking for the matter to be resolved by the African Union. “We withdrew,” Kenya’s Solicitor General Ken Ogeto told journalists by phone. “We don’t want to appear symbolically. You appear because you think you’ll have justice.” Kenya announced its withdrawal on Monday as proceedings got underway about who owns an area off the two countries’ Indian Ocean coastline. Both countries plan to explore the area for oil, gas and fish. The issue “belongs in the African border dispute mechanism system,” Foreign Affairs Principal Secretary, Macharia Kamau, said in an interview earlier. Kenya favours “bilateral negotiations and continental negotiations in the context of facilitation by the African Union,” rather than seeking a settlement at the court, he said. In 2014, Somalia went to court to challenge a 2009 agreement that set its maritime border along latitudinal lines extending 450 nautical miles into the sea. The matter relating to a 150,000 square-kilometre (58,000 square-mile) off the coastline was postponed at the ICJ for a third time last May due to the coronavirus pandemic. Kenya’s request for further delays was unsuccessful. Somalia is “deeply concerned that Kenya has decided not to appear at these hearings,” Somali Deputy Prime Minister, Mahdi Gulaid, said at the ICJ. “In Somalia’s view, this is inconsistent with Kenya’s obligations under the charter, the statutes and rules of the court.”

Commentary

  • Nigeria’s unemployment rate has more than quadrupled since 2015. Inflation, which stood at single digits in 2015 has risen to, and remained at double digit since then, with the latest figures breaching an 11-year record for food inflation. What is more, food inflation is almost 500 basis points above headline inflation. Historically, and even during the 2016 recession, this gap was never more than 200 basis points. In the recession’s aftermath, this gap has only grown and looks set to continue from all indications. These datasets point to a fundamental shift in policy making which has altered the country’s economics significantly over the last six years. The result of this shift is a scenario where all indices – GDP growth, per capita income, unemployment, inflation, exchange rate and debt – are worsening. It is time for a critical reassessment of the present policy track of the Buhari administration with a view to pulling the country back from the brink. These numbers have real human costs. SBM researchers have repeatedly observed larger numbers of young people on the streets of Nigeria’s cities, towns and rural communities simply doing nothing. Our security trackers are seeing an uptick in social problems, and these can be linked to the large numbers of idle hands. Surveys have shown that even those who are employed now have to support more people even as their purchasing power continues to shrink. As more people become unemployed and inflation soars, even this safety net of familial support will no longer be able to hold back the tide.
  • The protest by these six dissenting states and an ambivalent Ondo about donating land to the NLTP seems to suggest that the programme is beset by the same problem at the heart of the farmers-herders crisis and the now shelved Ruga plan: conflict over land and water, and specifically, who is responsible for providing the land for the grazing reserves and the ranches. The conundrum arises from the fact that the FG does not own any land apart from the FCT (under Nigerian law, land ownership is vested in state governors), and as such, has to get states on board to provide land for any of its projects. But also, it does appear that the NLTP (full details of which are not yet in the public domain) seems to be relying on land donated by governments for the ranches rather than encouraging commercial interests to acquire and develop lands into ranches. This means that the donation of such lands by state governments is bound to be an explosive issue, especially in southern states where herding is not a traditional industry and where heightened tensions between indigenous people and nomadic herders who are predominantly Fulani are likely to boil over. For the NLTP to be successful, the underlying strategy needs to be recalibrated to one which encourages ranchers to acquire and develop landed property through commercial transactions. In other words, a middle ground plan that assuages the anxieties of states in the south of a backdoor northern takeover should be the ideal approach. Furthermore, it bears pointing out that the gains of the NLTP will not be visible in the short-term; as such, the current policy of restricting the importation of milk and dairy products is counter-productive, especially to the country’s food security goals. As noted before by this publication, Nigerians, on average, consume only 10% of the recommended 267 litres of milk yearly, which has an impact on citizens, particularly children and their cognitive development. The petition by the EU to the WTO will be the first big test for Dr Okonjo-Iweala and its decision will be eagerly anticipated, as it concerns her country on one hand, and a major trading bloc as the EU on the other.
  • This ruling in Milan is important for a few reasons. First, it may slow down the exit of oil majors from the country, since the court has ruled that the case is essentially between present and former Nigerian government officials and a guilty verdict would have made the Nigerian business of these oil companies untenable. In practical terms, the best path for the current government would be to take the matter up with officials of the Jonathan administration. That course of action, however, is unlikely to be on the table as it would open this administration to similar actions after 2023. The next best course of action would be to drop all legal claims and ask Shell and Eni to proceed with the Final Investment Decision (FID) for the Zabazaba/Etan field (OPL 245), a mammoth deal which was due to be signed in Q2 2017, with an original timeline for first production in 2020. This field is believed to be the largest oil block in Africa, with an estimated hold of nine billion barrels of crude oil. Estimated to cost about $13.5 billion to develop, it could be producing oil in as little as two years, and – subject to other factors such as passing oil sector reform, the current oil price environment and the aggressive push by major economies to build renewable energy economies – should give the government a needed revenue boost at a time it desperately needs it. Both majors will be waiting for Abuja to move speedily on this issue. Eni has already said that it and Shell would end up as losers from the deal since they never received production rights to start extracting oil and the licenses expire in May. If Nigeria’s sticks to its promise to review the verdict and consider its appeal options, this would not only elongate the kick off of this critical investment but also further deepen the country’s reputation as an unwholesome place to do business.
  • Kenya’s withdrawal from the ICJ case further prolongs an almost decade-long dispute with huge implications for the region’s political dynamics. Although Kenya and Somalia are security partners (Kenyan soldiers have been serving in peacekeeping missions in Somalia since at least 2013) and there is a large, vibrant Somalian community in Kenya, this dispute could harm the relationship between the countries albeit in nonviolent ways. At the heart of the conflict is potential hydrocarbon resources which has drawn the interest of international players: Norway and the United Kingdom support Somalia’s claims (officially motivated by different reasons but) with the hope of securing oil blocks. On the other hand, France and the United States are backing Kenya’s claims as French oil company Total has won a contract in the disputed zone; while the US, which views Kenya as a vital security partner in the region, has signed trade deals worth $100 million. Considering the interests of international players, this brings to the fore a major critique of the ICJ, which is that its members often vote along the interests of the states that appoint them – a factor which appears to be the prime motivation behind Kenya’s latest move. In addition, Kenya’s withdrawal buttresses the claim of the perceived inability for the ICJ to firmly control state behaviour. The African Union also suffers from that handicap and it is unclear if it has enough leverage to resolve this dispute. This observation is all the more germane considering the fact that the AU has been dismal in resolving territorial disputes; recent ones include the thorny dispute between Morocco and the Polisario Front over Western Sahara, the Grand Renaissance Dam project among Ethiopia, Egypt and Sudan, three of the continent’s primary military powers or the intractable crisis in the Democratic Republic of the Congo. While Kenya might be venue-shopping for a more friendly arbitration process in view of its substantial influence within the AU as one of the continent’s bigger economic powers, there is no guarantee that it will have its way within an unproven system that lends itself to political conciliation rather than to bold actions on pressing issues. In other words, this dispute will go on for a while longer.