The week ahead – Check!

Ghana’s President, Akufo-Addo, announced changes to his cabinet a month after two ministers resigned to focus on their political campaigns. He made new appointments and reshuffled some ministers. However, the country’s economic challenges persist. MTN has announced that the Ghanaian tax authority has withdrawn the tax liability case it had earlier levelled against the pan-African telco in mid-January. The Ghana revenue authority had slapped MTN Ghana with a GHS8.2 billion ($665 million) fine, citing unpaid back taxes. In a statement published on the Johannesburg Stock Exchange news service (SENS) last Friday, MTN stated that the withdrawal came after extensive discussions between itself and the relevant Ghanaian authorities.

President Akufo-Addo’s letter to parliament carrying the news of new faces in his cabinet wasn’t a reshuffle as many wanted to see; it was a simple case of filling the gap, which has turned out to be a fiasco, as he only opted to fill the vacant positions in his government, the result of four ministers resigning for their presidential ambitions, ill health or a scandal. Many party insiders, especially the top brass of the ruling New Patriotic Party (NPP) and some MPs, had been anticipating a decisive removal of some ministers from the government, particularly Finance Minister Ken Ofori-Atta, but Mr Akufo-Addo only filled the potholes and skipped an opportunity to properly recalibrate his cabinet in a parochial bid to keep finance minister, Ken Ofori-Atta. As it turns out, the finance minister happens to be the President’s cousin. The state of play is that Mr Akufo-Addo is running a government with 86 ministers. Some research suggests that Ghana could save close to 7 billion cedis ($372 million) if the President reviews, ‘right-sizes’ and outrightly closes Ministries, Departments and Agencies (MDAs) and State-Owned Enterprises (SOEs) to reduce the enormous pressure on compensation expenses. In October 2022, Mr Akufo-Addo insisted that the five ministers he had confidence in were Mr Ofori-Atta: Finance and Economic Planning Minister, Alan Kyerematen: Trade And Industry Minister, Kwasi Amoako Atta: Roads and Highways Minister, Ignatius Baffuor Awuah: Employment and Labour Relations Minister and Owusu Afriyie Akoto: Food And Agriculture Minister. Today, two have left, leaving him with a smaller bench. For many, the Finance Minister has lost credibility and must be removed from office to inject some much-needed confidence in Ghana’s economic prospects. Ken Ofori-Atta first promised Ghanaians that the country did not need the support of the IMF to solve its deep-rooted economic crises. A few weeks later, Ghana was back at the IMF negotiation table. Another big u-turn was the inclusion of individual bondholders, who were initially promised an exemption by the ministry from the domestic debt operation exercise. For many, Mr Ofori-Atta lost legitimacy after seeing inflation hit more than 54%, import cover dropping to less than two months; the cedi losing more than 20 percent of its value against the US dollar in January 2023 alone, coupled with skyrocketing fuel prices and an unending hike in the cost of borrowing. However, President Akufo-Addo believes the current economic situation is no fault of the finance minister and would not sack him “based on his track record of growing the economy by an average of 7 percent between 2017 and 2019.” With the government’s projected expenditure exceeding 205 billion cedis this year, the key question has to be how the President and his finance minister intend to finance a budget deficit hovering around 62 billion cedis while total revenue plus grants are pegged a little above 143 billion cedis. The pressure is on to see who blinks, and desperate measures have entered the fray. The cash-strapped government has resorted to multi-million tax demands from some of the largest corporations in the country: Tullow Oil, MTN, Gold Fields and Kosmos Energy, among others. The Ghana Revenue Authority (GRA) has backtracked the MTN tax liability case while several other companies slapped with back taxes remain in talks with the authority. Following the official announcement, investors have flocked to snap up MTN Ghana shares, and all may seem well, but the Ghana Revenue Authority has to find a way to meet its tax revenue target of 112 billion cedis, which is more than 78% of the entire revenue and grants programmed for this year. It is good news that cooler heads have prevailed within the government with regard to the MTN tax issue. Pursuing such a measure would have resulted in further depletion of investor confidence in the rule of law in Ghana at a time when it desperately needs investor confidence to at least remain at the same level.

Nigeria’s Supreme Court issued an interim injunction restraining the Federal Government from suspending the acceptance of the old naira notes on February 10, after some states filed a suit, which four opposition parties also filed — Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM) and National Rescue Movement (NRM) — over the scarcity of new naira notes. As the scarcity persists, some banks are shutting some of their branches due to rising customer attacks, and allowing non-essential employees to work from home, says The Punch, as the Lagos State Police Command has warned that some groups are planning violent attacks in the state due to the currency crisis.

Considering that an exercise that should be a monetary policy activity has become fully politicised, it has become increasingly harder to examine the issues devoid of its influence. Ironically, governors who are part of the ruling party have taken the CBN, headed by a CBN governor who has been more political than all his predecessors and has openly contested for the presidency under the same ruling party, to court to stop the implementation of a policy that the same APC-led government seems committed to. It speaks to an underlying schism within the ruling party, with different factions now employing all the means at their disposal to defend their interests. Added to this mix is the declaration by 13 of the country’s 18 political parties threatening to withdraw from the general elections if the deadline is extended again. The CBN initiative does have its merits. According to the regulator, out of ₦3.23 trillion in circulation as of October 2020, only ₦500 billion was within the banking industry, while ₦2.7 trillion was kept permanently in people’s homes, a reality that had hampered the CBN’s ability to manage inflation using its monetary tools. Also, withdrawing the notes can adversely affect the activities of terrorists and kidnappers and hamper vote buying during the forthcoming elections. On the other hand, the CBN has underestimated the adverse effect its policy has caused the economy. Introducing only ₦300 billion in new notes into the economy is grossly inadequate for a country with a huge informal sector used to cash-based transactions (largely due to the large unbanked population). The associated strain on banking infrastructure, caused by the demands for online transfers, is reflective of the shortsightedness of the regulator’s execution strategy. For now, it is perhaps positive that the battle is being fought in the courts and not on the streets. In all this, ordinary Nigerians continue to suffer from the impact of a short supply of cash and an increase in the failure of digital transaction platforms due to what has now become a poorly implemented policy. The crux of the matter is the policy’s impact on Nigerians.

The Chairman of the Independent National Electoral Commission, Mahmood Yakubu, told the CBN Governor, Godwin Emefiele, that the new naira notes’ scarcity might disrupt the 2023 elections. In a meeting on 8 February, he explained that many of INEC’s service providers have no bank accounts. He then asked the CBN to address the concern related to the cash withdrawal policy. The CBN governor said the cash would be made available for the payment of the service providers. Earlier in the month, Mr Yakubu had told the National Union of Road Transport Workers (NURTW) that the lingering petrol scarcity might affect the transportation of election materials, promising to meet with officials of the NNPC Limited to discuss mitigation measures.

There are rising concerns that the 2023 elections will not hold as scheduled. These fears are not unfounded, as the elections will be happening at a time the country is going through an effective economic recession, an energy crisis, a debilitating currency crunch, high unemployment, a growing insecurity footprint, rising inter-ethnic and religious tensions and disillusionment with the general state of governance. On the morning that the 2019 vote was initially scheduled to take place, the INEC Chairman uttered those infamous words: “Following a careful review of the implementation of its logistics and operational plan and the determination to conduct free, fair and credible elections, the Commission came to the conclusion that proceeding with the elections as scheduled is no longer feasible”. INEC’s logistics and operational plan rely heavily on the availability of cash to pay its vendors, such as members of road transport unions, security agencies and polling agents, who are largely drawn from the NYSC, who may not have bank account numbers and will be less likely to accept promissory notes from INEC for payment after services have been rendered. This is the challenge Mr Yakubu was referring to in his meeting with the CBN governor. Added to the mix is the lingering petrol scarcity, which may affect the transportation of election materials and pose a grave danger to the conduct of the election. Despite the assurance from the CBN governor that cash will be made available for the payment of the service providers, the implementation of the naira redesign policy has done little or nothing to inspire confidence — citizens have continued to struggle with accessing cash for the last three weeks. Also, the incessant strikes or strike threats from the Independent Petroleum Marketers Association of Nigeria, an umbrella body of retail fuel operators who control most filling stations in the country, have compounded problems. In other words, none of the mitigation measures that INEC has in place has allayed stakeholders’ and citizens’ concerns that the elections will hold without any major hitches. Presently, the election is officially on a knife edge.

On Sunday, a community leader in Ose LGA of Ondo State confirmed that gunmen had murdered six farmers and traders. He said the attack was triggered by the farmers’ efforts to stop the destruction of their crops. Up north, the death toll from the attacks in some LGAs in Katsina rose to 84, according to Daily Trust. It had earlier reported that no fewer than 41 members of vigilante groups and residents were killed, as an unspecified number were injured in Kankara, when they tried to recover cattle seized by terrorists. Katsina has said it will inaugurate a commission of inquiry to investigate the killings.

Before Sunday’s incident, Ose, like other LGAs in Ondo, had suffered attacks from criminal groups suspected to be militant Fulanis. The major highlight of the crisis came in late November 2020, when Oba Israel Adewusi, the Olufon of Ifon, was killed by armed men on his way back to Ifon from Akure. That incident and others, such as the 2019 killing of Funke Olakunrin (daughter of former Afenifere leader Reuben Fasoranti), increased friction between the South West’s political elites spearheaded by Ondo governor, Rotimi Akeredolu, and the federal government, which made clear its opposition to the South West’s regional police initiative – Amotekun. However, Amotekun’s dismal record in bringing insecurity to heel has not only soured its approval rating but made it lose the goodwill it had when it was launched. This is a commentary on how rampant armed non-state actors are in Nigeria, particularly in rural areas and on major highways. These recurring attacks remind us of how weak the Nigerian state is in enforcing security and order, with literally hundreds of armed groups existing and carrying out attacks with different motivations. As Nigeria goes into the 2023 general elections, this has implications for the likelihood of elections taking place everywhere, as election officials could find themselves at risk, either for political reasons or financially-motivated attacks. It could also impact voters’ confidence in participating in the elections, particularly in areas beset with such attacks. For Ose and many other southern communities, the tempestuous relations between the Fulani and host communities will worsen with each attack, now coloured with twin lenses of state failure and tacit state approval. It is unlikely that the current administration can do anything more to stop these attacks; therefore, the next administration should make it a top priority to commence a series of actions that will restore peace and security in the country.