The week ahead – Ace of spades

19th May 2023

The Director General, Budget Office of the Federation, Mr Ben Akabueze, has said Nigeria is fast exceeding its limited borrowing space. He said the aggregate budgets of all governments in the country amount to about ₦30 trillion ($400 million), less than 15 percent in ratio to GDP. The Federal Government has incurred a deficit spending of ₦36.8 trillion in eight years under the administration of President Mohammadu Buhari from 2015 to 2022; 77 percent of the deficit spending occurred in the last four years, from 2019 to 2022.

With just a few weeks to the end of the Buhari administration, it is a given that a key legacy of his tenure is its reckless borrowing spree paired with the distinct failure to pass any significant economic reform. The debt crisis is one of the three biggest economic issues the next administration will need to deal with. Mr Akabueze, who has been tapped to be a minister next term, was simply regurgitating what market watchers have said for the past five to six years—the borrowing is unsustainable and will put the economy on the brink of failure. The Buhari Administration’s borrowing habits have raised debt servicing to unprecedented levels in Nigeria, and to complicate matters, Nigeria’s revenue profile has tanked over the last decade as the global oil and gas industry struggles with low prices amid decreasing demand. To further compound this, a key issue that needs to be tackled is finding the money to make the needed infrastructure and human capital investments to enable the country to exit the current vicious cycle. It has to improve revenue collections by moving informal taxation (that doesn’t get into the public purse) into the formal taxation system instead of piling more tax commitments on Nigerians. Nigeria might have a low tax-to-GDP ratio officially, but it is a deceptive statistic that doesn’t tell the true story. For example, the Lagos chapter of the National Union of Road Transport Workers (NURTW) is estimated to make over ₦100 billion yearly from extracting value from public bus and tricycle drivers, yet this is not reflected in the government’s balance sheet. The World Bank estimates that informal taxation accounts for about 40% of total tax revenue in Nigeria. This means that the government is losing out on a significant amount of potential revenue that is not reflected in tax receipts but is still paid by the people. Navigating these challenges will require a discipline, skill and commitment which has been rarely seen in the country’s leadership. Abuja needs to do its homework to become more creditworthy.

At least four staff members of the US Mission in Nigeria have been killed in Anambra State. The assailants invaded the venue where residents were waiting for medical treatment from the United Nations Children’s Fund (UNICEF) officials. The Deputy Superintendent of Police (DSP), Tochukwu Ikenga, said the joint security forces embarked on a rescue operation in Ogbaru following an attack on a convoy of staff of the US Consulate. The assailants murdered two police mobile force operatives and two staffers of the Consulate and set their bodies and vehicles ablaze. Mr Ikenga, however, insisted that “no US citizen was in the convoy.”

In one of the more significant (and unfortunate) security ironies, the United States has become a victim of the nefarious activities it constantly warns about in its countless Nigeria risk-and-travel advisories. 2023 makes it the third year since the South East, which used to report the least casualties year-on-year, joined other geopolitical zones in the slugfest of volatility and mounting insecurity. Between the belated efforts of the region’s governors in setting up forces to stop attacks, which created the space for the Independent Peoples of Biafra (IPOB) to set up its paramilitary Eastern Security Network (ESN), and the arrest and detention of its leader Nnamdi Kanu at the hands of the state, a lot of things have gone wrong, chiefly the lack of political will by the federal government (on whose shoulders most of the blame lies) to adequately tackle the menace of gangs with access to locally-made small arms. IPOB is a separatist group that was always going to end up focusing its attacks on southeastern locals because it does not have the capacity to tackle the Nigerian state head-on. It has been proscribed as a terrorist group and is the target of military operations by the Nigerian government. Dialogue with the IPOB leadership has never been feasible given its demands and unpragmatic leadership style. The attack on the US Mission contingent—which, for now, appears to be an opportunistic attack—is a continuation of IPOB’s campaign to delegitimise any expression of Nigerian state power, which the police not only represents on the ground, but close cooperation with Washington also underscores. The incoming administration might let the separatist group burn itself out even if the region is hollowed out in the process if antecedents are any guide. It is not clear at this time that the Tinubu administration would go out of its way to seek an amicable solution. This is not helped by the precarious nature of the opposition Labour Party’s hold on the region and its clean sweep during the federal elections which did not translate to winning the governorship contests. A firm Labour hold on the region would have created an opportunity for in-depth discussions and negotiations on the separatist question between Aso Rock and the region. Anambra and Imo are the two states that have seen the worst separatist violence since the ESN was established. Both states’ approaches—Anambra with amnesty and Imo with aloofness—have failed. Still, none can be more incriminating than a retreating state which has left its rivals to mark the sand in an unending expansion of the country’s ungoverned spaces.

One person was allegedly shot dead on 11 May when Amotekun officers in Ekiti State clashed with traders at the popular Atikankan area of Ado-Ekiti. Vanguard gathered that trouble started after the Amotekun officers tried to relocate the traders from the Atikankan to a new area allocated to them by the government at Agric Olope. However, some of the traders, who were not ready to relocate, attacked the Amotekun officers, and one of them opened fire on the traders. The Ekiti State Police Command confirmed the clash, saying four suspects have been arrested, and normalcy has been restored to the area.

There are several layers to this story. The first is the age-old problem of policy development in Nigeria: the absence of wide-ranging consultations with the very people the policy is meant to serve. The character of governance in these parts is bereft of the bottom-up attitude, which, if adopted, would have prevented this drama. Building and developing markets is a government function. However, the success of a relocation depends on several factors, including customer access to the market itself, without which resistance is likely. In this case, the government failed to do the consensus-building homework. This leads to the second layer: the problem of dispute resolution. Settling this dispute would ideally have taken no more than a few meetings between the market leadership and the state government, but since the latter saw such hard work as a steep hill, the brute alternative became attractive, leading to the further alienation of the state from the people. The use of Amotekun operatives is instructive because the police are usually the main enforcer of such directives; the military only steps in when things get out of control. The state government most likely underestimated opposition to the new plan and sent in the small guns. The basic dispute resolution approach in the country is to utilise force, and when an equilibrium is reached, dialogue and compromise ensue. Essentially, the cart comes before the horse. This is another example of how African national and subnational governments see their people as dispensable elements to be corralled and herded rather than respectable citizens worthy of service. The constant failure to prioritise diplomacy has led to the avoidable loss of lives. Worse, accountability for actors and compensation for victims is virtually absent. This could have been avoided with the proper communication and implementation of relocation measures. The obvious must be said at this point. Amotekun and similar organisations do not have the requisite recruitment, training and operational know-how to serve as a state police force properly. A formal well-grounded police force would be grounded in conflict resolution and crowd management: police officers receive training in crowd management techniques to safely handle large groups of people. This training includes strategies to maintain order, prevent violence, and ensure public safety during protests, demonstrations, sporting events, or large gatherings. Amotekun is none of these things. It is a state-sponsored militia that has to be made into a proper police force. For starters, the states should fight for and work out a constitutional amendment to establish state policing. Only then can the hard work of building forces fit for service commence.

Ghana’s largest opposition party, National Democratic Congress (NDC), has chosen its former president, John Dramani Mahama, as its flag-bearer for the 2024 presidential election. Mahama was declared the overwhelming winner after polling 297,603 votes, representing 98.9 percent, while his challenger—former Kumasi mayor—Kojo Bonsu, scored 1.1 percent. This is the third time Mr Mahama will run for the top job. He came second to President Nana Akufo-Addo in 2016 and 2020. The ruling New Patriotic Party will hold its primaries in November, and the presidential election is scheduled for 7 December 2024.

As surprises go, this will hardly register on any monitoring scale. The widely anticipated NDC primary was marred by controversy as one of the aspirants, former finance minister and central bank governor Dr Kwabena Duffuor withdrew from the race, citing unresolved issues with the party’s voters’ registers and alleged bias by some party executives. Mr Mahama’s selection comes after he lost two consecutive national elections to Nana Addo Dankwa Akufo-Addo of the New Patriotic Party (NPP) in 2016 and 2020. He served as President from 2012 to 2016 following the death of his predecessor, John Evans Atta Mills. Following the advent of the fourth republic in 1993 after almost two decades of military dictatorship, the NPP and the NDC have consistently held primaries to choose their presidential and parliamentary candidates out of all the political parties that entered Ghana’s Fourth Republic political scene. There were only a few instances in which the NDC did not have primaries to choose its presidential candidates, including 1992, 1996 and 2000. For instance, the NDC decided not to use primaries to choose its presidential candidate for the 2000 multi-party presidential elections. Instead, the late John Atta Mills was declared in the famous ‘Swedru declaration’ in 1998 by its founder Jerry Rawlings as the party’s ticket bearer. Since then, the NDC has reverted to using primaries to elect its candidates. In all of the NDC’s presidential primaries, no candidate has won with more than 98% of the total valid votes. After winning an average of 95% in the 2015 and 2019 primaries, Mahama has set an NDC primary record, beating Mills’s 96.9% from 2011. Nationally, a significant increase in vote share in the 2020 election relative to 2016, plus an equal split in parliamentary seats for both the ruling and opposition parties, is a good omen for Mahama. The NPP, clearly spooked by the prospects of facing a familiar foe, has dismissed Mahama’s selection as a sign of desperation and lack of vision by the NDC. Behind the scenes, it knows better than to scoff at an experienced political operator unfazed by the limelight and fluent in communicating his plans for addressing the country’s sizable issues with voters. The NPP is itself preparing for the post-Akufo-Addo era amid growing speculation and competition among potential candidates. The primary will be a crucial test of the party’s unity and popularity ahead of the 2024 general elections. So far, seven stalwarts of the NPP have publicly declared their intentions to lead the party in 2024, including three government ministers (who had to resign to be eligible for the contest), three former and current legislators and a former presidential spokesperson. However, many observers believe that the Vice-President, Dr Mahamudu Bawumia, is also a strong contender for the ticket, although he has not officially announced his bid. Some party supporters have been campaigning for him covertly or overtly, citing his economic credentials and his appeal to northern voters (Mahama is also from northern Ghana). Mr Bawumia has been President Akufo-Addo’s running mate since 2008 and has played a key role in implementing some of the government’s flagship policies. It is widely believed that should Bawumia decide to run, the primary would become a two-horse race between him and former Trade and Industry Minister Alan Kyeremanten. Both candidates have strong credentials and support bases within the party and the general public, but they face challenges and criticisms. In 2024, Ghana will be at a crossroads; it will either make history by giving the ruling government an unprecedented third term or re-electing a former president who was shown the exit door after four years of being in charge. Many voters are in a dilemma; the economic and political reasons that compelled them to vote massively against John Mahama in 2016 are panning out under the current Akuffo-Addo-led administration. That disaffection is Mahama’s trump card.