Scorecard – assessing our 2022 predictions

At the end of every year, SBM makes projections of what we think will take place in Nigeria during the coming year. While the prophecy business is not an exact science, and our record thus far has been good.

Economy

• We project a 2.0% to 2.5% growth rate for the full year 2022. Nigeria’s 3.11% and 3.54% growth rates for Q1 and Q2 2022 made it look like the country could outperform the 3.1% projected for the year by the Central Bank of Nigeria and 2.5% projected by the World Bank; the Q3 rate of 2.25% brings us back within range. We got this correct.
  We forecast that oil prices will hover around $75 – $85 per barrel for much of 2022 despite the continued disruption of economic activities due to COVID-19. The average crude oil price for 2022 has been around $103 per barrel, mostly caused by the Russian invasion of Ukraine, which has drastically interrupted the oil supply, including sanctions against Russia. We got this wrong.
  Nigeria’s public debt and debt service ratio will continue to increase as the country will fail to meet its revenue targets for 2021 and 2022. To bridge the gap, the FG will continue on its borrowing binge. Nigeria’s public debt rose from 96 billion USD in January 2022 to 103 billion USD by July 2022. Also, the debt-service ratio increased from 72% to 102% while the federal government yet again missed its revenues target by close to 40% if the released figures from Q1 2022 are extrapolated to the whole year. We got this correct.
  Rising inflation in the US and other G20 markets due to stimulus spending will lead central banks to raise interest rates. Also, local investors will find the Nigerian stock market less appealing once the Q1 earnings/dividends season is over. Global inflation has been rising due to the effects of the Russian invasion of Ukraine. This has prompted most central banks to raise interest rates after the US Federal Reserve raised its rates. We got this correct.
  The foreign reserves will remain above $35 billion while the official exchange rate will be about $1/₦450. The foreign reserve is currently at its one-year low but at $37.5 billion, it is above the $35 billion prediction we set. The CBN also devalued the official exchange rate in January 2022 to bring it to ₦440/$1. We got this correct.
  We expect that states and the FG will reach a political settlement of the VAT impasse that will see the states receive more of what they generate, but the FG will continue to collect the tax. No such political agreement has been reached and the VAT case is still being heard at the Federal High Court and the Court of Appeal. We got this wrong.
  The inflation rate should continue to drop through Q1 2022 but rise again by Q3 2022 due to election spending and food inflation. The inflation rate did not drop in Q1 2022, but only rose slightly. However, since the start of Q2, it has been rising rapidly as a result of the impact of Russia’s invasion of Ukraine as well as local food insecurity. We got this partially correct.
  The expected fuel subsidy replacement with a direct transfer of ₦5,000 monthly to subsidise the poor on transport is unlikely to take off as Nigeria will be unable to afford this expense in its current fiscal trajectory. As predicted, the removal of the fuel subsidy was postponed until June 2023. We got this correct.
  We expect the passage of a Startup Bill which will be the omnibus regulation for the tech and digital innovation industry in the country. The bill was passed by the National Assembly in July 2022 and signed into law in October 2022. We got this correct.
  We expect an increase in regulatory and tax-based fines in 2022 as the government seeks to extract from the corporate sector to fill some of its fiscal shortfalls and fund spending. We got this partially correct. Most of the fines that were handed out in 2022 went to media organisations.
  Consumer spending power to remain subdued as there is no likely widespread increase in wages in sight. Due to rising inflation, consumer spending has reduced across the country in 2022. We got this correct.

Security

• There will be increased organising by groups into armed vigilante groups to defend themselves and communities against bandit, pastoralist and kidnapping attacks. The election year will see the flow of small arms into these groups, increasing clashes across the country. We got this correct.
  Terrorists will begin to strike more frequently in the bigger urban centres in the North, including the Federal Capital, Abuja. There have been increased attac
  ks in the North, including the attack on the Kaduna-Abuja train, a disputed bombing in Kano, and the attack on the Kuje prisons in the FCT. We got this correct.
  Terrorists will establish their own versions of states in rural ungoverned spaces as well as fight internal battles to consolidate control before taking on bigger targets. There have been reports of terrorist groups in the North-West and North-East doing this, as well as in-fighting over territory between them. We got this correct.
  The military will institute a garrison town strategy in the North-West which will secure specific urban centres and leave much of the surrounding countryside and roads to the control of terrorists. We got this wrong. The military has done the opposite and has started bombing the groups from the air, although the boots on the ground needed to secure the land have not been always available.
  The South-West of the country will see a ramp-up in gang activities, some of which will assume the toga of secessionist agitation. We got this partially correct. There has certainly been a rise in criminal activity in Nigeria’s richest region, but since Sunday Igboho was taken out of the equation, secessionist talk has calmed down.
  The South-West will see an increase in political violence as various groups jockey for political influence as the relationship between Lagos and Abuja deteriorates. We got this correct. There has been an increase in political violence as the elections have come closer.
  The military will step up its campaign in the South-East with unnecessary brutality, galvanising even more support for the separatist movements in the region. We got this partially correct. Military brutality has remained a constant in the region, but the Peter Obi electoral wave has taken the wind off the sails of any secessionist agitations.
  We think a more organised movement than IPOB will begin to emerge in 2022 and will link up with militants in the Niger Delta. We got this parttially correct. In 2022, the Biafra Nations League started operating in Cross River State.
  As more oil majors divest from their onshore assets, Nigeria will see an increase in oil spills, and this will reinvigorate militancy in the Niger Delta. This will hamper Nigeria’s ability to take advantage of the high oil prices to ramp up production. We got this partially correct. While Nigeria has been unable to take advantage of the high oil prices to ramp up production, it has been more to the effect of theft than militancy. This has also contributed to more oil spills in the Niger Delta.

Politics

• We predict that the APC will lose the Ekiti governorship election to the PDP, but will retain the governorship in Osun State. We got this wrong as the results were reversed. The APC retained the Ekiti governorship and lost the Osun governorship to the PDP.
  The two main parties, APC and PDP, will field candidates that are the direct opposites of each other. We got this partially correct. While the presidential candidates of the two parties are direct opposites in terms of the regions they come from, they are both Muslims.
  We will therefore not see a rash of defections out of the APC as we did in 2019. Rather there will be defections into the APC, as politicians will conclude that the real battle is winning the APC presidential ticket. We got this wrong. Neither has happened so far, and rather we are seeing an increasing stream of downline defections from the APC, especially in Northern Nigeria.
  We expect a rash of corruption arrests and trials in 2022 as political opponents seek to neutralise rivals. This has not happened. We got this wrong.
  We expect Nnamdi Kanu to be released before or during Q3, as a political compromise is reached. While the court has ruled that his arrest and forced rendition was illegal, he has not yet been released. We got this wrong.
  We expect to see a rejuvenation of the civil society space as the elections galvanise these groups into action once again. There is likely going to be a CSO-led protest, ostensibly to protest socio-economic hardships around inflation and cost of living. We got this partially correct. The election period has reignited the CSO space with numerous initiatives around the election, starting from the agitation for the signing of the Electoral Act which took place in February this year. However, there has not been a CSO-led protest about socioeconomic hardships.
  International sanctions, on the basis of documented massacres, will be instituted against named Nigerian government agents. We got this wrong. This has not happened.
  The government will lift the ban on Twitter in time for the campaign season to kick off. We got this correct. The federal government lifted the ban on Twitter in January 2022.
  The government will continue to clamp down on press freedoms. We got this correct. Increasingly harsh fines have been meted out to TV stations such as Arise TV.
  At the subnational level, more state governors will come under more pressure as economic failings begin to make more people question the use of state government funds. We got this correct. More and more people are beginning to ask questions about the utilisation of various funds available to them.

Our Predictions for the Rest of Africa

• In 2021, Africa saw a few successful coups. As we go into 2022, we expect that more coups will take place. Two successful coups took place in Burkina Faso in 2022 – the first in January which overthrew President Marc Rich Kabore and installed interim president Paul-Henri Sandaogo Damiba, and another in September which overthrew Damiba. We got this one correct.
  Renewed activities by Islamic State-affiliated cells within the Democratic Republic of Congo, as well as parts of East Africa, will resurrect old wounds and raise the sceptre of renewed conflict and political instability. This has not happened as Uganda has been running joint operations in the eastern DRC with the Congolese military. We got this wrong.
  The war between the central government of Ethiopia and the Tigrayan forces would continue well into 2022 and spread to other regions. The conflict spilled briefly into the Afar region but remained primarily in the Tigray region. Despite the humanitarian costs of the war, no other region has attempted to break free from Addis Ababa. However, the involvement of Eritrea complicated efforts to reach a peace agreement. We got this partially correct.
  Islamic State’s focus on northern Mozambique will invite renewed foreign military support as likely attacks on infrastructure projects persist. A European Union training mission has been deployed since November 2021 to provide training and support to the Mozambican Armed Forces. Also, the Southern African Development Community (SADC) deployed troops from January to at least July 2022. We got this one correct.
  Russia and Turkey’s involvement in critical Sahelian countries – Burkina Faso, Chad, and Mali – will morph into fill security support and cooperation pacts as French and Western strategic withdrawals persist. The French military concluded its troop withdrawal from Mali in August, and also announced the end of Operation Barkhane, its anti-jihadist military operations in the Sahel in November. Also, there are accusations of Russian involvement in the second coup in Burkina Faso via the mercenary outfit Wagner Group. However, the French-Chadian military pact remains strong. Also, Turkey has not gotten any more involved militarily in the Sahel beyond its 2018 donation of $5 million. We got this mostly correct.
  The detection of the Omicron variant of the COVID-19 virus will likely see the world shut its doors to more African countries. All travel bans on African countries on account of the Omicron variant were lifted before the start of 2022. We got this wrong.

At 53% correct, our 2022 predictions were our worst-ever performance. Of the 38 forecasts we made, we had 20 correct, nine partially correct and nine wrong. SBM Intelligence’s forecast for 2023 will be published at noon WAT on Friday, 16 December 2022.