The week ahead – Shuffle

The Central Bank of Nigeria (CBN) has said the old ₦200, ₦500, and ₦1,000 banknotes remain legal tender till 31 December 2023, according to the acting CBN spokesman, Isa Abdulmumin On 9 March, Ondo Governor Oluwarotimi Akeredolu said that the continued rejection of old naira notes by traders was flagrant disobedience to the law which “stifle(s) local trade and business transactions, weaken the economy and cause us great harm and avoidable troubles.” Lagos Governor Babajide Sanwo-Olu struck a similar tone in a 13 March statement to business owners and government agencies in the state.

By itself, the Naira swap policy is a good thing. According to the bank, of the ₦3.23 trillion in circulation as of October 2020, only ₦500 billion was within the banking industry, a reality that had hampered the CBN’s ability to manage inflation using its monetary tools. However, rather than swap Naira notes, the CBN withdrew old notes and failed to introduce many new ones, essentially trying to implement its decades-old cashless policy within three months. This caused a shock to the informal sector, home to the large unbanked population (comprising a majority of Nigerians), and the heightened demand for online transfers and e-payments from banked Nigerians strained the banking infrastructure. To buttress the point, recent Nigeria Inter-Bank Settlement System (NIBSS) data—the custodian of much of the banking industry’s interoperability function—shows that across the country, cashless transactions dipped to ₦37.67 trillion in February 2023 as Nigerians continue to grapple with failed and delayed cash transfers. This is despite a 41.29 percent increase in e-payment gateway usage (from 638 million in January to 901.46 million in February). This dip in overall trade volumes is attributable to delayed or failed cash transfers and deferred purchases. In a country where only 37.3% have mobile internet access, and 55.4% have electricity access, an attempt to force the population to prioritise electronic financial methods was always going to be tough for the 100 million people for whom cash is their main and, in many cases, only play. Compounding the situation, the cash scarcity forced people to buy cash (no, that was not a typo) at rates approaching 20% in certain parts of the country, further impoverishing people at a time when their livelihoods were already taking a hit. There are a few key points to add to the postscript of this policy. The first is that it took pressure for the CBN to comply with a court order. The bank’s directive only occurred when it was clear from a presidential announcement that compliance was also Aso Rock’s position. Under Governor Godwin Emefiele, the CBN has mortgaged the institutional independence enshrined in law. This policy is the final nail in the coffin of the regulator’s facade of policy independence. The second learning is that the general public refused to accept the old notes as legal tender after the Supreme Court pronouncement but rather waited until the President and the CBN concurred, which speaks to the general disregard for the judiciary. That is partly the fault of the third arm of government—considering its inability to operate by the tenets of efficiency and reasonability—and partly the fault of those in authority who have consistently disregarded the court. Why do it on the streets if someone like the Attorney-General of the Federation, Abubakar Malami, sees court judgements as suggestions? The most important lesson from this debacle is the destruction of faith in the financial system. The multi-decade effort to drive financial inclusion in one of the world’s largest blocs of unbanked and underbanked people has been undone in three months, and restoring that confidence will take toil, sweat and years.

In a statement issued on Tuesday, Communications and Digital Economy Minister Isa Pantami said at least 1,550,000 attacks were recorded on public websites daily before the 25 February elections; they increased to 6,997,277 from within and outside Nigeria on Election Day. The incidents include Distributed Denial of Service, email and IPS attacks, SSH Login Attempts, Brute Force Injection attempts, Path Traversal, Detection Evasion and Forceful Browsing. The statement added that a committee set up to mitigate the activities of cyber criminals during the elections worked from 24-28 February.

Consistent with INEC’s thesis on election security, where it insisted before the elections that its database had come under multiple attacks (at the time, it declined to give a number), Mr Pantami is simply keying into well-known perceptions of Nigeria’s poor track record on cybersecurity. His report begins to diverge from reality in the figures he has mooted. Konbriefing.com, an independent research outfit providing IT security solutions around governance, risk & compliance (GRC), reported that in February, it recorded 115 cyber-attacks worldwide, with the United States and Germany suffering the most breaches with 29 and 24, respectively. The report did not mention Nigeria but had Mali, Morocco and Poland suffering an attack each. More broadly, it is head-scratching for a country to suffer nearly seven million cyber-attacks in one month. However, there are reasons for Pantami’s possible overestimation. In May 2022, the Nigerian Communications Commission (NCC) reported that Nigeria loses about $500 million yearly to cybercrime, accounting for 0.08 percent of the country’s Gross Domestic Product. Many of the attacks have targeted financial institutions, leading to disillusionment with the banking industry by people who have lost their funds to hackers, a problem that regulatory agencies have also noted. In January, the Nigeria Data Protection Bureau (NDPB) said it launched an investigation into (data breach) allegations of unlawful disclosure of banking records, unlawful access and processing of personal data made against Guaranty Trust and Zenith Banks. According to the Nigeria Inter-Bank Settlement System (NIBSS), “within nine months of 2020, fraudsters attempted 46,126 attacks, and they were successful on 41,979 occasions representing 91% of the time.” Such a high success rate is telling of poor cybersecurity infrastructure, and its damming consequences on the country’s economy cannot be overemphasised. Back to the Communications Minister’s comments on the elections, it is difficult to believe his claims when acclaimed cybersecurity insiders say only about 2,200 attacks happen daily in the US. Globally, organisations are said to have dealt with a daily average of 29.3 attacks in the fourth quarter of 2022, and while attacks in the Europe, the Middle East and Africa region (EMEA) were higher than the global average, it is still difficult to see how Nigeria’s election is valuable enough to inspire millions of attacks.

Jihadists have killed at least 37 fishermen in Borno State, militia sources and a local told AFP on Thursday. On Wednesday evening, three sources said a dozen fighters believed to be with Boko Haram opened fire on some fishermen outside Guggo village. “We have recovered 37 bodies last night along the river bank and nearby bushes,” militia leader Babakura Kolo told the news agency. “The figure is not exhaustive, and search for more bodies is ongoing in surrounding bushes,” Kolo said. The fishermen were sorting out their catch on the riverbank when they were ambushed.

For Boko Haram, this action is very much part of what it has done effectively over the past decade: seek scapegoats, often civilians, during downtimes. The group has a well-documented history of targeting and killing ordinary people in droves. Over the past few years, farmers, fishers and loggers have comprised a sizable portion of that demographic. A similar incident occurred in late November 2020 when 81 farmers were murdered at a rice plantation in Kwashabe village, about 20 kilometres north of Maiduguri, in what is now known as the Zabamari Massacre. The military’s explanation for that event was that the farmers did not seek government permission before visiting the farms, given how highly volatile most of the state was. A year later, the state governor Babagana Zulum embarked on a push to close Internally Displaced Persons (IDP) camps in the state and resettle displaced people in their towns of origin. This latest massacre has proved him wrong. Boko Haram’s targeting of farmers sits within the group’s well-known modus operandi of viewing civilians in occupied territory as potential spies for the Nigerian military. Murdering farmers, herders, loggers and fishermen also kills off competition in the places whose economic activities they seek to monopolise. The faction responsible for this attack is yet to be ascertained. However, if the Islamic State carried this out, the most obvious explanation is that sustained pressure by the military is increasingly making the group desperate, making them abandon their long-held strategy of winning hearts and minds by protecting would-be victims from the excesses of both the Nigerian military and ISWAP’s rival, the old JAS faction of Boko Haram. The risk of wider regional contagion persists. The jihadist wave led by organisations like Boko Haram and ISWAP is increasingly being felt in relatively wealthier coastal parts of West Africa from the drier and poorer Sahel. Regional economic and security cooperation either through ECOWAS or ECOMOG should be deepened to counter these malign transboundary elements.

The European Union (EU) has al­located 10 million euros to support Ghana’s food security, Vice President Mahamudu Bawumia has announced. He said this would augment the government’s agenda of Planting for Food and Jobs (PFJ), as the global economy has recently witnessed deep­er polarisation and increased scepticism about the benefits of multilateralism. Speaking at the opening ceremo­ny of the Ghana-European Union Political Dialogue in Accra, Bawumia added that the current global challenges had brought trade friction, economic slowdown and constrained fiscal and financial space.

While Ghana remains a regional agricultural powerhouse, one obstacle to continued growth in the sector has been the need for adequate policy and financial support. In 2023, the Food and Agriculture Ministry will make do with a paltry annual allocation of 2 billion cedis ($160.7 million) compared to the education ministry, which was allocated 18 billion cedis ($1.44 billion). In 2023, the budgetary allocation for the government’s flagship programme—Free Secondary Education (Free SHS), a subset of the education ministry’s expenditure, will receive more money than the entire agriculture ministry. This is hardly an ahistorical trend. To reverse this, the Akufo-Addo administration in April 2017 launched the Planting for Food & Jobs (PFJ) programme to promote food security, counter the seasonality of select food crops in the domestic market and provide jobs for Ghanaians. Six years later, the immediate past Food and Agriculture Minister, Dr Afriyie Akoto—who has resigned from his portfolio to pursue presidential ambitions—says the ministry lacks the resources required to prosecute its mandate. With Ghana currently at the IMF’s doorsteps for a $3 billion bailout package and inflation above 50%, those concerns appear consigned for the doghouse in the near term. An overreliance on extractive industry revenue, particularly oil and gold, has meant other sectors, including agriculture, have attracted little policy attention, something the former minister bemoans because “agriculture is one reliable sector which can give us the cash flow to enable us to fund all our activities.” 66 years after independence, Ghana still loses about 50% of its food harvest to waste. The country has dropped from 59th in the 2019 Global Food Security Index to 83rd in 2022. Of the 28 Sub-Saharan African (SSA) countries, Ghana ranks 3rd, but this speaks more to the gloomy picture of food security in the SSA block than Accra’s stellar performance. The reality is that Ghana’s overall performance and its sectoral scores on such items as affordability, sustainability and adaptation are below the global average, and at its heart has been the funding gap. The government is already burdened with other expenditure concerns so donor funding will serve as a complimentary stop-gap. It will, however, not go far enough to address long-standing concerns. The future outlook is anything but cheery.