The week ahead – Deep impact

Widespread voter apathy marred the local government elections held in Lagos and Ogun states on 24 July. Reports from different parts of the states showed that many voters shunned the polls for lack of interest in the exercise, fear of electoral violence, and lack of faith in the outcome of the election. In Lagos, the state independent electoral commission conducted the polls across the 20 local government areas and 37 local council development areas of the state. A presiding officer (PO) at Ojodu Grammar School 1, Polling Unit 017, Abel Obina, said only seven persons had cast their votes as of 11.15 am out of 150 registered voters. “The turnout is not good as expected. A lot of people are still at home,” Obina added. The agents of the All Progressives Congress and Peoples Democratic Party at the polling units confirmed Obina’s account. Another PO at Polling Unit 006, Dairyfarm Nursery and Primary School, Agege; Nobei Austin told reporters that only 15 out of 99 registered voters had voted. The situation was the same in the Itire/Ikate LCDA of the Surulere Local Government Area where most of the eligible voters in the various councils chose to spend the day relaxing or indulging in recreational activities. There was mild drama at Unit 008, Ojodu Primary School, as some youths were seen entangled in a quarrel over sharing of cash given to them by a politician who visited the polling unit to cast his vote. The spokesperson for Lagos State Independent Electoral Commission (LASIEC), Mr Tope Stephen, said that while voting was successful in most areas, there were reports of violence in some areas. In Ogun, Governor Dapo Abiodun and the PDP on Saturday traded words over the conduct of the poll, which was also marred by alleged rigging. Abiodun, who cast his vote at the Ward 3, Unit 2, in his hometown of Iperu, Ikenne Local Government Area, mocked the PDP for withdrawing from the election. Reacting, state PDP chairman, Sikirulahi Ogundele, claimed responsibility for what it described as “the unimpressive turnout” of the poll in the state. The state chapter of the APC said it was satisfied with the conduct of the election. Voter disenchantment with governance at the local government level runs deep; as a councillorship candidate of the Youth Party (YP) in Ajao Estate, Ward G, Isolo, Lagos Okikiola Taiwo Jalupon put it: “the low turnout is because people are tired of how the country is being run.”

The Central Bank of Nigeria has banned the sale of dollars to Bureau De Change operators (BDCs). Governor Godwin Emefiele announced the ban at a press briefing which was held after a meeting of the Monetary Policy Committee of the bank on Tuesday. He said the ₦5.7 billion allocated to BDCs had become unsustainable as $20,000 is allocated to over 5,500 BDCs, amounting to $110 million per week. Emefiele said BDC operators have become a conduit for illegal financial flows. He also said the Cbillion will no longer continue registration of new BDCs and current allocation will be channelled to commercial banks. All commercial bank branches will create a separate desk for sales of forex. `The monetary policy committee of the Central Bank of Nigeria (Cbillion) has announced its decision to retain the monetary policy rate (MPR) at 11.5 percent. At its last meeting, the committee members also voted to retain MPR at 11.5 percent – the rate it had been since September 2020. Godwin Emefiele, governor of the apex bank, announced the committee’s decision on Tuesday at the end of a two-day meeting at the Cbillion headquarters in Abuja. “The MPC decided to hold all policy parameters constant. Committee thus decided by a unanimous vote to retain the monetary policy rate at 11.5%,” Emefiele said. “MPC voted to retain an asymmetric corridor +100 -700 basis points. It also voted to retain cash reserve ratio at 27.5% and retain liquidity ratio at 30%.”

Ten Nigerian athletes have been disqualified from participating in the ongoing Tokyo 2020 Olympics. This was contained in a statement in a statement from the Athletics Integrity Unit on Wednesday. The Athletics Integrity Unit is an independent body created by World Athletics that manages all integrity issues – both doping and non-doping. The statement showed that a total of 20 athletes were ineligible with Nigeria being the most affected. Other countries affected are Belarus, Ethiopia, Kenya, Morocco, and Ukraine. The athletes were disqualified for not meeting the minimum testing requirements under Rule 15 which applies to all national anti-doping organisations, including Nigeria’s National Anti-Doping Federation. The statement titled, “20 athletes not eligible for Tokyo 2020 as minimum testing requirements not met by ‘category a’ federations”, read in part, “Despite significant improvements in the domestic testing programmes in countries categorised as being the highest doping risk to the sport under the World Athletics Anti-Doping Rules (Anti-Doping Rules), 18 athletes from the final entries for the Tokyo Olympic Games are not eligible to compete because the minimum testing requirements under Rule 15 of the Anti-Doping Rules were not met by ‘Category A’ Federations. “Nigeria is the most affected country, not meeting the minimum testing requirements under Rule 15 for 10 athletes. Nigeria was included in Category A at the start of 2020 following a continued period of weak domestic testing levels. The key requirement in Rule 15 is that an athlete from a ‘Category A’ country must undergo at least three no-notice out-of-competition tests (urine and blood) conducted no less than 3 weeks apart in the 10 months leading up to a major event. Only then do they become eligible to represent their national team at the World Athletics Championships or the Olympic Games. In the lead-up to the Tokyo Olympic Games, the ‘Category A’ Federations, in partnership with their respective National Anti-Doping Organisations (NADOs), generally made significant progress with respect to their domestic testing programmes.”

The Biden administration on Tuesday will announce a new push to expand business ties between U.S. companies and Africa, with a focus on building needed digital, health and physical infrastructure on the continent, a senior U.S. official said. U.S. industry executives welcome the interest but say dollar flows will lag until the Biden administration wraps up its lengthy review of Trump administration trade measures and sets a clear policy on investments in liquefied natural gas. Dana Banks, Senior Director for Africa at the White House National Security Council, will kick off a U.S.-Africa business summit, with a pledge to “re-imagine” and revive Prosper Africa, an initiative unveiled by the Trump administration in 2018. President Joe Biden, who requested nearly $80 million for the initiative in his budget proposal in May, aims to focus the initiative on women and equity, with an expanded role for small- and medium-sized businesses, she said. Banks said the administration’s goal was to “reinvigorate Prosper Africa as the centrepiece of U.S. economic and commercial engagement with Africa,” with more details to be released soon on a companion initiative called Digital Africa. “This is an area that is a priority both at home and abroad,” Banks said, adding that African countries were eager to expand their cooperation with the United States and its companies. U.S. business executives warn the United States is in danger of being overtaken by China and Europe, which are already investing and concluding trade agreements across the continent.

Commentary

• Historically, local elections in Nigeria suffer low turnouts. This is a result of numerous factors: the country’s overly centralised governance structure which makes voters focus most of their energies on the Office of the President as well as the governorship seats; the vesting in states of the legal responsibility for conducting local elections which have incentivised such abuses as the irregular conduct of elections, LG elections are meant to take place every three years, which leads to appointing caretaker councils once the tenure of an elected council has lapsed. The rise of caretaker councils is particularly galling because it has become the instrument of choice for governors to entrench their cronies in power while robbing the electorate of their franchise. Local elections, on the off chance that they are conducted, are rife with irregularities. It is common practice for members of the ruling party to be appointed to run state independent electoral commissions (SIECs). As a result, it is not unheard of that ruling parties in the states sweep every available office even in known opposition strongholds. These have combined to strip these elections of every ounce of integrity and depress voter confidence. Then the elephant in the room: although local governments have core constitutional functions in Nigeria such as primary health care; pre-primary, primary, and adult education, town planning, establishing and managing markets, motor parks and cemeteries; and waste disposal, they lack the requisite autonomy from the state governments, who control their federal allocations, to be useful. As such, the bulk of local government areas are ineffective in performing their duties and their impact is not felt by citizens. Finally, there is a glaring absence of robust checks at the local levels, either in the form of active citizen groups, civil society organisations, community-based organisations, media and opposition parties – effectively allowing the state ruling parties and the SIECs to act with impunity. Although the winners of the Lagos LG polls have already been sworn in (all from the ruling APC of course), not all the results have been made public, calling the vote’s credibility into question. We expect some of the parties to sue, but there is no precedent of state election tribunals overturning local results. Put another way, Saturday was yet another business-as-usual day in Nigeria’s local government electoral history.
• Each time the question is posed as to whether Nigeria is a dollar economy, one receives differing opinions. One thing that is clear is that CBN executives spend a lot of time trying to figure out why there is so much demand for FX and why the value of the foreign reserves and the naira seem to be continuously sliding. It does appear that doing nothing is not a strategy the CBN tolerates, thus it is willing to try different things. Its favourite tool of choice is the ban. When the Central Bank last banned the sale of dollars to BDCs abruptly in 2016, the impact was an 85% increase in the parallel market exchange rate by the end of that year. If a similar trend occurs this time around, we can expect the dollar to trade at ₦950 by the end of the year. This is while moving the supply to the more connected members of society and maintaining the preferential supply of forex to favoured persons and firms. Immediately after announcing the ban, the CBN released up to $200 million to banks to quell demand but this quickfire move is unlikely to solve the dollar illiquidity issue. There is a considerable backlog of valid and unmet requests for foreign currency by companies and foreign portfolio managers at the official Importers & Exporters Window. In addition, we are approaching the peak summer season where the demand for forex spikes. This is not how to engender what is perhaps the cornerstone of the CBN’s mandate – exchange rate and price stability. Coming at a time when Nigerians are already groaning under the weight of crippling food inflation and record unemployment, this is yet another powder keg that can be easily ignited by Nigeria’s political class as the country moves towards electioneering next year.
• It is difficult to quantify how damaging the news of the athletes’ dismissal is, not just for Nigeria’s participation in the Tokyo Olympics, but for the morale of athletes aiming to represent Nigeria in future competitions. This disqualification is the latest in a comedy of errors that has characterised Nigeria’s preparation for the Tokyo Games. During the trials, a faulty timer denied Tobi Amusan a potential national and African record in the 100-metre hurdles. Even worse, the female 400-metre relay team who had qualified for the games in June was disqualified for a technical error concerning the placement of cones on the track. These events signify a new low for Nigerian sports under sports minister, Sunday Dare. Back in 2016 under his predecessor, Solomon Dalung, athletes representing the country resorted to raising funds in order to pay for flights and accommodation to the Rio Games. A last-minute augmentation drive by some corporate bodies ensured the country had representation. Furthermore, the disqualification of Nigerian athletes for violating doping rules was coming as the country was already in the highest risk band for doping by the Athletics Integrity Unit due to a weak domestic testing regime. The Sports Ministry and the Athletics Federation of Nigeria should have exhibited the required attention to detail to ensure that whoever qualified did not fall foul of the rules. Rather, the last few years have been dominated by a faction riddled AFN aided and abetted by the sports minister. Mr Dare must be held accountable for this avoidable embarrassment and steps must be taken to ensure compliance with all international sporting regulations in order to avoid a repeat over the next three years. Ultimately, this show of incompetence is one that affects not only sports, but the wider economy as well.
• Although the Trump administration had started Prosper Africa as far back as 2018, it debuted to little fanfare and did not receive the hype of Power Africa – the Obama administration’s initiative to invest more in increasing access to electricity on a continent where a majority have little to none of it. This has been mostly due to the fact that Africa was not a priority for the Trump administration and has scarcely been for the US, perhaps with the exception of Clinton and Bush II. These days, America frames its interest in Africa mainly within the confines of geopolitical competition with China. This framing means that it does not have a clear strategy and this shows in the approach. In addition, while America seems to be content in moving slowly, China is aggressively growing its influence and deepening trade ties with African countries. It does appear that the new initiative will be integrated into the Build Back Better World (B3W) initiative launched by the G7 in June and driven by the Biden White House considering its shared emphasis on gender equality and digital technology; however, like with the B3W, it ignores key priority areas such as electricity access, transportation and primary education – themes which will provide the foundation for the achievement of digital technology and gender equality. It is also silent on free trade for the continent, which is sorely needed and in its absence, creates the impression that the African countries are only mere recipient countries for the citing of contracts awarded by Washington to American companies with an eye on resource control. Overall, the initiative will require a solid plan that provides details on how it will be run and funded. Unsurprisingly, Africans are inclining themselves towards the more active partner. America will need to back its words with actions quickly and ensure that said action is not funnelled through what America thinks Africa needs, but what Africa actually needs. This will mean working with partners on the ground who will provide as-is intelligence as well as the flexibility to incorporate their prescriptions into their interventions.