Monthly Archives: January 2017

Justice for Onnoghen

By Rafiq Raji, PhD

This country, which gets by despite its rampaging leaders, who live off our commonwealth with impunity and use proxy violence to achieve their heinous aims, may finally have reached the crossroads. Not that it didn’t in the past. The problem this time, is that the fragile bond that holds us together risks being finally stretched to the limit. Call it the quiet before the storm, if you like. For those of us immersed in the populace, the tension is writ large. But if your senses were not so keen, all you may hear could be no more than a hum. And a blur may be all you see. Naturally, our big men hear nothing. After all, there is noise all around. Horns blaring in sometimes hopeless traffic, violent gyrations from generators that every household must have, one killing here, some bombing there. We are so used to the noise all we hear is a hum. And the sights? Blasé geriatrics, forever in our corridors of power, couldn’t be moved: they’ve seen it all before. But the conscientious ones amongst these experienced men must surely wonder about the disturbing violent trend of our nation’s politics. And the impunity. Marauding Fulani herdsmen kill harmless farmers like they wouldn’t their cattle. But who gets compensated? And with the sweep of a broom, a soiled man becomes anew. In saner climes, an accused official would resign to clear his name, a ruling political party would shut its doors to fair-weather supporters, and criminals would face the full wrath of the law. Injustices everywhere.

Conventions matter
It would be unwise to deny Justice Walter Onnoghen what he has rightly earned, who having been nominated by the country’s highest judicial governing body for the chief justiceship of the land, is still being made to jump through hoops. Should President Muhammadu Buhari not forward his name to the Senate within the next two weeks, Justice Onnoghen would become the victim of a great injustice by hegemons, who not too long ago displaced but now back in power, are stopping at nothing to ensure they hold all the reins. I suppose the indignity being meted out to Justice Onnoghen is not unconnected with his ethnicity and religion. My view. Ironically, had Mr Buhari been more accommodating with his earlier appointments and endorsements – the security establishment, presidency and legislature are dominated by northerners – he could have gotten away with appointing “someone he likes” to the chief justiceship. Now for the one appointment he probably wishes goes to one of his brethren, who have occupied that exalted office since 1987, he meets the roadblock of convention. True, the north lost out when former President Goodluck Jonathan jettisoned the north-south power rotation convention of his party and used his powers of incumbency to secure his first full and only term in office. Hence why the hegemons unabashedly urging Mr Buhari on say the south is being paid back in its own coin. Alas, the tit-for-tat only begets a vicious cycle.

Violence must stop
Unfortunately, history is on the side of violent men. And hegemony does profit. Still, societal order depends on violence being the exclusive preserve of the state. When non-state actors attempt to share that privilege, it behoves the state to put them down and protect the oppressed. When it refuses to do so or lacks the capacity thereof, the state becomes a failed one. The contemplation of self-defence by some rightly aggrieved groups is symptomatic of the belief that the state is not doing its duty. Or that it is being selective when it comes to protecting the citizenry. We must condemn all those who have resorted to violence. And those outside constituted authority calling for its use as a counterweight are misguided. They should be condemned as well. Violence begets violence. It is a cliché because it is true. Still, from killings of mostly Christians in southern Kaduna to rampages by murderous Fulani pastoralists sending farmers in central and southern Nigeria – who also happen to be largely Christian – to their early graves, one may not be exaggerating if one thought some heinous scheme is about. Governors of northern states say foreigners fronting as Fulani cowboys are the purveyors of the violence. This is complete nonsense. The herdsmen are known. Some argue that state authorities dominated by Fulani or northerners with sympathies for the nomads have simply been reluctant to go after their own. In the absence of a credible alternative narrative, this view has prevailed. The casaulty? A weakening of the ever fragile fabric that holds the agglomeration of contradictions called Nigeria together. And you’d think the north would see how it is in its enlightened self-interest to embrace its co-travellers in other parts of the country. For it certainly didn’t help that Mr Buhari had to be pressured to issue a statement condenming kilings in southern Kaduna. And yet, he is always amongst the first to offer sympathies when terrorists strike in some European capital. Mr Buhari has the moral and statutory authority to stop the violence. He must use it.

Come clean
Worries abound about the health of Mr Buhari, exacerbated by the refusal of his handlers to come clean on his health condition. Judging from our past experience, his officials probably don’t know anymore than has already been revealed in the media. What do we know? Mr Buhari is on vacation in the United Kingdom. Naturally, he would see his doctors. In the recent past, Mr Buhari travelled to Britain to seek medical attention for an ear infection. He was also on holiday then. But surely for a man in his seventies, it is not out of place for him to have ailments that require routine check-ups. So is the primary reason Mr Buhari travelled to London for the chill of its streets? I think not. Unsurprisingly, governors from his part of the country – who hope that one of them would take Mr Buhari’s place when the time comes – have their antennae up. The incumbent’s predecessor was not supposed to have the spine for the highest office in the land. Mr Jonathan certainly didn’t have the ambition. That changed when his principal succumbed to ill health. The northern politicians must have had a sudden sense of déjà vu the moment rumours started about Mr Buhari probably fighting for his life in a London hospital. But did they ask Acting President Yemi Osinbajo – a southerner, who is also vice-president – to resign? I don’t think so. Was it contemplated? Probably. Maybe the proper question should be this: If they could have their way, and in light of Mr Buhari’s advanced years and accompanying health troubles, would they replace Prof Osinbajo with someone of their ilk, say? If you were in their shoes, wouldn’t you? It is all a distraction, if you ask me. Alas, it is one we would have to endure for the remainder of Mr Buhari’s first and probably only term in office.

Also published in my BusinessDay Nigeria column (Tuesdays). See link viz. https://www.businessdayonline.com/justice-for-onnoghen/

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CBN & SARB to keep rates steady

By Rafiq Raji, PhD

Interest rate decisions by the Nigerian and South African central banks coincide this week. They are both likely to keep their benchmark rates unchanged when they announce them on 24 January. In Nigeria, opportunistic price increases for staple foods, transportation and fuels during the festive period together with a continued weak exchange rate contributed to pushing the annual inflation rate a little bit higher to 18.55 percent in December, from 18.48 percent in the preceding month. There are reports some of these price increases are yet to be reversed, especially those for kerosene and cooking gas, which rose even further this month. In South Africa, inflation accelerated further in December, coming out at 6.8 percent, 0.2 percentage point higher than November’s. The outlook suggests the headline would fall back within the 3-6 percent inflation target band of the South African Reserve Bank (SARB) from February at the latest, and likely for the remainder of 2017. Considering both economies are in dire need of growth, the central banks would cut rates if they could. The inflation trend and outlook constrain them, however. I suppose the Central Bank of Nigeria (CBN) would get the opportunity by mid-year, when the headline should be about 9 percent. Having set a very high bar for any potential relaxation of its current tight policy, the SARB would probably like to see a sustained easing of price pressures before taking the plunge.

Troubling Trump
Even so, emerging market central banks like the CBN and SARB may find external factors would matter more than domestic ones, in the first half of 2017 at least, as global market participants try to make sense of what are probably unprecedented uncertainties, in modern times at least, spurred by disturbing trends of nationalism and protectionism in key developed economies. America is expected to be increasingly insular under its new and volatile leadership. Political disruptions in Europe are likely, as Germany’s liberal chancellor, Angela Merkel, faces backlash for her pro-immigrant stance ahead of elections in September – albeit she is likely to keep her job – and the probability of one not so liberally inclined winning the French presidential election in April edges up. And then there is China’s incipient opportunism, already asserting itself ahead of an expected void in global leadership that a potential American absence under Trump would spur. The immediate consequence for key African economies would be the likely slowing of foreign portfolio inflows. Still, I imagine some of these fears would abate later in the year. Until then, key African central banks would best serve their economies by being prudent. Thus, I don’t reckon the SARB would even consider cutting rates until the third quarter at the earliest, by 25 basis points, say, to 6.75 percent. In the Nigerian case, the CBN would be loath to tarnish its already battered image any further, especially as the fiscal authorities seek funds from international financiers, who have been grossly disappointed by the poor management of the economy thus far. So even as one expect inflation to slow to single digits in the second half of the year, there might be little wisdom in cutting rates even then. My reckoning is that the CBN would keep its policy rate unchanged at 14 percent until June at least.

Free naira
I have been a little astonished by recent commentary emanating here and there from the Nigerian intelligentsia that bizzarely seeks to rationalise the CBN’s foreign exchange restrictions. To allow the naira trade freely would be a recipe for chaos, goes one argument. Parallel market operators would necessarily impose a premium on their rates, it is also opined. I disagree. The instability argument about a market-determined exchange rate has been largely refuted by the recent success in Egypt, which devalued its currency, raised interest rates and cut subsidies to enable it secure a $12 billion 3-year loan from the IMF. The Egyptian pound has since returned to a path of stability, after the free-fall that initially greeted the authorities’ devaluation move. Better still, the second tranche of the IMF loan is set to be released in February. In contrast, Nigerian stakeholders have been bickering over the past two years on how to go about solving similar troubles. Little wonder, international financial institutions have been reluctant to play ball. The World Bank has refused to budge on the authorities’ loan request, pending clarity on planned reforms. Even the African Development Bank, which is favourably disposed to Nigeria, has applied the brakes on the second tranche of its $1 billion loan for the same reason. Thus, much needed funding to fill the gap in the budget and finance infrastructure projects are not likely to materialize until the authorities’ much touted Economic Recovery and Growth Plan is finalised, now scheduled for release in February, a 2-month delay. This potentially great but perennially foundering nation can ill afford such tardiness.

Also published in my BusinessDay Nigeria column (Tuesdays). See link viz. https://www.businessdayonline.com/cbn-sarb-keep-rates-steady/

Jammeh must go

By Rafiq Raji, PhD

It cannot be gainsaid how crucial it is to ensure Yahya Jammeh, Gambia’s outgoing president, relinquishes power, peacefully or by force, on 19 January, the day President-elect Adama Barrow is scheduled to be inaugurated. President Jammeh has thus far rebuffed entreaties by West African leaders for him to step down when his tenure expires. Mr Jammeh insists his petition at the Supreme Court, which next meets in May, about irregularities in the collation of election results, the outcome of which he had earlier accepted, must be heard and decided beforehand. His belligerence and the consequent impasse represent a most significant threat to the consolidation of democracy in the West African region. Worse still, it threatens the country’s tourism industry, the mainstay of the about $800 million economy. Disapora remittances – about 20 percent of GDP – may also suffer, as international financial institutions probably take precautionary measures. Should he call the bluff of the Economic Community of West African States (ECOWAS), which has promised military action in the event, the year may prove unstable for one of Africa’s smallest countries. ECOWAS has little choice but to act if Mr Jammeh refuses to respect the will of his people. Otherwise, its ability to prevent a recurrence somewhere else in the region would be greatly damaged. Its troops must prepare and not take anything for granted, however. Because even though Mr Jammeh’s ‘forces’ may number about a thousand and some more, when the mercenaries he has recruited are counted, recent military history – the American Iraqi war debacle for instance – suggests success is now less dependent on superior hardware or manpower. A knowledge of the terrain and a highly motivated side fighting for its survival can be tremendously lethal. And lest we forget, Liberia and Sierra Leone were similarly small countries; but see how long and complicated ECOWAS peace-keeping efforts in those countries took.

Swear-in Barrow no matter what
Mr Barrow fled Gambia on Friday (13 January), in the company of West African leaders, under the cover of a visit to Mali to attend the France-Africa Summit. He was moved to Senegal afterwards, to ensure his safety till inauguration day. Hitherto, I worried Mr Jammeh might try to abduct or kill Mr Barrow before his inauguration – there were even rumours of his death at some point, probably a test of the waters by his detractors. Thankfully, ECOWAS leaders acted proactively and ‘absconded’ with him on time. They must also now ensure he is sworn-in on the due date – nothing is more important than that at this time. And it should be on Gambian soil, with a contingent of ECOWAS forces protecting him till he is able to assume full control. That is the only way to effectively de-legitimize Mr Jammeh. That is, if he chooses to be unreasonable. Of course, it helps a great deal that the African Union (AU) would cease to recognize him as the country’s president from then. The AU would get the opportunity to demonstrate just that when it meets later this month. It is also heartening that about 800 Nigerian troops have been reportedly put on alert for deployment to The Gambia. A Senegalese military contingent is also being readied for the task.

Evil that men do
There is still a chance Mr Jammeh would accept the soft landing package being offered him. He is probably still taking a wait-and-see approach. It is believed Nigeria’s President Muhammadu Buhari, the ECOWAS chief mediator, offered him asylum at their meeting in Banjul last week. The embattled Gambian strongman probably wondered if he would not suffer the same fate as that of former Liberian dictator, Charles Taylor, who though assured of safe refuge by Nigerian authorities, was eventually handed over to international judicial authorities for prosecution. Mr Taylor rightly now languishes in the chilly winter of a British prison for the heinous crimes he committed. It is probable Mr Jammeh has concluded the safest place for him to stay is in his country, likely his birthplace, Kanilai – believed to be his preferred capital and where his infamous farm is located. In the event of military action, he is likely to retreat there. ECOWAS military forces would be wise to keep him there, but not attack him or his mercenaries or any of the members of the Gambian armed forces who choose to stick with him, likely those from his Jola tribe. In any case, there are reports of desertions by his supposedly loyal men. It is also likely Mr Jammeh may build a human shield with innocent Gambians around any potential hideout. He has already ordered the closure of the border with Senegal, to stem an increasing exodus, as citizens flee what they imagine would be some period of instability. Regardless, I dearly hope at some point Mr Jammeh pays greatly for his misdeeds. His punishment has probably begun already. Because sometimes when an evil man’s time to meet his waterloo is due, even the gentlest entreaties would be rebuffed by him. But I certainly do not wish that this would be at the expense of innocent Gambian lives.

Also published in my BusinessDay Nigeria column (Tuesdays). See link viz. https://www.businessdayonline.com/jammeh-must-go/

Reflections on Obama (1): Caution as courage

By Rafiq Raji, PhD

As the sun sets on Barack Obama’s presidency, questions are already being raised about what he really achieved. Never mind that there might not be another black American president for a very long time to come. Over the course of the year, I hope to reflect on his decisions and what motivated them in the hope that there might be lessons for those of us who seek success in leadership amid vicious opposition. When President Obama took over the American presidency in 2009, the country was in a recession and mired in two messy wars. He leaves office amid a resurgent economy and more manageable military engagements around the World.

At one point during the height of the 2016 presidential campaign, Mr Obama and Hillary Clinton, the Democratic Party flagbearer, hugged each other warmly in front of the press. It was a most genuine moment of affection. About eight years earlier, Mrs Clinton gave Mr Obama much grief, as they fought for their party’s nomination. To put it bluntly, she barely hid her racism. And it is opined that Bill Clinton, her husband, never got over her defeat by ‘Barack’. The conclusion I came to was that perhaps it finally dawned on her, as she now faced another type of discrimination, sexism in her case, how much hurt she must have inflicted back when they were competitors. Mr Obama’s magnanimity (or sagacity) in not only appointing her to perhaps the most influential appointed office in the American government, but also in allowing her ample room to succeed, may have also taken on a greater significance.

Naturally, John Kerry, another competitor, would be a natural replacement when Mrs Clinton needed to go prepare for what then seemed like a sure – her best chance certainly – shot at the presidency. There is probably a much comprehensive contrast to be made about the Obama-Clinton relationship, especially within the context of one of the most vicious presidential campaigns in US history. That Mr Obama let go of his legendary calm to campaign in the most emotional way (we’ve ever seen of him) for Mrs Clinton makes one wonder whether what motivated him was his angst at Donald Trump, the foul-mouthed Republican Party flagbearer, who was also a stone in his shoe, or empathy for Mrs Clinton, a woman trying to break the highest glass ceiling in the land, or both. I do not want to focus overmuch on that at the moment. I am more interested in those pivotal decisions that shaped his presidency for better and some might say, for worse.

Mr Obama would hardly enjoy a quiet retirement. Efforts are already afoot to unravel his signature health insurance policy, ‘Obamacare’. And by who else but those ardent foes of his: the Republicans – they gave him much grief. But for this inaugural piece, I want to focus on the dynamics behind what is now widely argued to be his biggest foreign policy mis-step. That is, choosing not to order air strikes against Syrian targets after evidence emerged that Bashir Al-Assad, the embattled (and now resurgent) Syrian president, used chemical weapons against his own people. In my view, it was perhaps the most difficult decision of his presidency. And his albatross.

Even a symbolic airstrike in Syria would have been better than the public humiliation of allowing America’s bluff to be called, some argue. And to add insult to injury, Vladimir Putin, Russia’s president, another Obama foe, would do just that afterwards. As a human being, especially considering how many lives were lost to America’s inaction, Mr Obama must have been enraged. It is a testimony to the strength of his character that he did not seek to regain the initiative. Otherwise, Syria could have been for Mr Obama what Iraq became for George W. Bush, the 43rd American president.

Would President Bush have called off the Iraq war if evidence of chemical weapons (and others of mass destruction) was not found just as he was about to give the order? As it turns out, Saddam Hussein’s Iraq did not have chemical weapons. And the jury is still out as to whether Mr Bush knew this before giving the order for attacks to commence. American presidents wield so much power that it takes a man of great courage and respect to carry it lightly. And in Mr Obama’s case, the easy thing would have been to order the Syrian airstrikes. By choosing not to, Mr Obama was well aware he would have to endure taunts of timidity long afterwards. President-elect Trump’s “Make America Great Again” slogan is in part a rebuke of Mr Obama’s caution. Incidentally, what Mr Trump may soon learn is that power is best wielded lightly: it is the perception of power that is more effective. The moment you allow adversaries test your supposed clout overmuch, as Mr Bush did in Iraq, you become vulnerable. True, they might find that indeed you are as powerful as you say. But having put a finger in your nose, they no longer fear you. And after a while, they find weaknesses they can exploit. The Iraq war proved to be humbling for America. There is also a sense I get that Mr Obama did not want the first black American president to leave a mess. And as far as achievements go, Mr Obama turned out to be a pair of safe hands indeed. Some argue otherwise: they say the World is a more dangerous place because of Mr Obama’s caution. Time will tell.

It is probable Mr Obama’s enduring legacy would be in his being, having made nonsense of myths about the limits of black achievement in American society. Even the Nobel Peace Prize awarded to him came before he ever achieved anything of significance. He got the prize before the deed: America didn’t start any new major war, a conventional one at least, under his watch. Addressing the military during their farewell tribute to him, Mr Obama, in that ever sing-song tone of his, put his doctrine succinctly: military action “should be compelled by the needs of our security, not our politics.” After a likely turbulent Trump presidency, Americans may come to see the wisdom in those words.

Also published in my BusinessDay Nigeria column (Tuesdays). See link viz. http://www.businessdayonline.com/reflections-obama-1-caution-courage/

Will Nigeria get out of recession in Q1-2017?

By Rafiq Raji, PhD

I think so. The headline growth figure is a year-on-year metric. Surely it is not unreasonable to reckon the economy would do better this quarter than it did during the same period last year. Q1-2016 was awful. Q1-2017 is not likely to be as bad. Thus, intuitively, on a year-on-year basis, the headline should be positive in 2017 because of a likely lower base.

Agricultural production, which is at least a quarter of GDP, is almost definitely set to expand above trend; principally driven by crop production. The agriculture sector grew 4.5% year-on-year (y/y) in Q3-2016, faster than the 3.5% y/y growth for the same period in 2015. Besides, there is anecdotal evidence to support likely better growth this year. For instance, the All Farmers Association of Nigeria (AFAN) says its members recorded a bumper harvest in the fourth quarter of 2016, confirming earlier comments by Nigeria’s president, Muhammadu Buhari. Not only that, farmers sold their produce at better prices in the most recent season, due to relatively higher demand, especially from manufacturers forced to backward integrate, as hitherto imported inputs have become difficult to acquire due to foreign exchange restrictions by the Central Bank of Nigeria (CBN).

But perhaps the main catalyst would be the Anchor Borrowers’ Programme (ABP) by the CBN. With about 40 billion naira in funds, the ABP has been providing loans to farmers at a single-digit interest rate of 9 percent. There have been some quick-wins already: beneficiaries’ progress in rice production is palpable at least, with about 1.1 million metric tons produced in one of the pilot states alone. There is currently about a 4 million metric ton local rice supply deficit. With the ABP and other incentives by the authorities, hopes are high that Nigeria may be able to meet total local demand for rice by 2018, potentially saving the country about $1.8 billion in foreign exchange currently used to import about 3.2 million tons of the staple food annually. Interventions for other crops are also ongoing.

The oil and gas sector, about 10 percent of GDP, would probably also recover. Crude oil prices are expected to remain above $50 per barrel for most of 2017, having closed at about $57 last year, after the decision by OPEC and non-OPEC members to cut production boosted prices. And thankfully, the authorities have been engaging with stakeholders in the restive Niger Delta region to stem disruptions to crude oil production from attacks on pipeline infrastructure. Crude oil production was as low as 1.4 million barrels per day (mbpd) – from above 2 mbpd hitherto – during the height of attacks last year. It is reasonable to expect there wouldn’t be as many attacks this year. That is, if President Buhari remains consistently conciliatory, after extending another olive branch to the militants in his New Year message.

Authorities need to act faster though
Many had hoped the authorities would fully launch their get-out-of-recession plan – the Economic Recovery and Growth Plan (ERGP) – before end-2016. I am still at a loss as to why Mr Buhari only gave highlights of the ERGP in his 2017 budget speech. There is a consistency I’m afraid in the Buhari administration’s disregard for the value of good timing. Businesses would have been more assured if the full details of the ERGP had been released together with the fiscal plan, as it would have fed into their 2017 business plans. With gaps likely now remaining in their plans for the year, they would necessarily be a little cautious. For instance, authorities recently announced increases in import duties on consumables like rice, sugar cane, salt, alcoholic spirits and luxury goods like SUVs and yachts, but reduced those on some key industrial inputs. One top executive wondered whether the measures would have a significant impact on inflation. I don’t reckon they would as much. This is because the said items do not represent a significant portion of the consumer price index (CPI) basket of goods and services, about 75 percent of which are food, non-alcoholic beverages, transport, housing and utilities. Imported rice is already being avoided because of a supposed ‘fake’or ‘plastic’ (synthetic) variety in circulation. Besides, most of the other items, including rice, are already being smuggled in. And as earlier highlighted, local rice production has increased. In any case, imported food constitutes only 13.3 percent of the CPI.

But the cogent issue is much more than that: are there other upcoming government policies that businesses should worry about? Releasing the details of the ERGP on time would provide some relief to business executives, who have been somewhat in a state of flux during this year’s planning season. They already have to worry about the recession, exchange rate and inflation. Without a doubt though, their greatest source of frustration is the acquisition of foreign exchange. Not only are there multiple exchange rates, there never seem to be enough FX in any of the markets. And with Mr Buhari only recently vowing (yet again) to resist further devaluation of the naira, the wide price differential between the official and non-official markets would probably remain, albeit the Central Bank of Nigeria (CBN) should have relatively more firepower to support the naira as crude oil prices recover. (Not that it should in a supposedly liberated FX market.) But surely, it would help a great deal if in addition to all these, businesses didn’t have to worry about potentially unfavourable government policies later in the year. They wouldn’t have to if the authorities would just lay them all out. On time.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. https://www.businessdayonline.com/will-nigeria-get-recession-q1-2017/