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Friday, March 24, 2023

The Week Ahead – Santa is Not Coming

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SBM Intelligence

It’s that time of the year again but with pandemic geopolitics buffeting Africa, muddled diplomacy making in the continent’s west, political repression in Benin, resource clashes in Cameroon and fiscal irascibility, confusing policy signaling and the resilience of insecurity in Nigeria, there’s not much to be festive about.

The United Kingdom says the 11 African countries on its travel red list will be removed today. The countries on the list are Nigeria, Botswana, Namibia, South Africa, Angola, Mozambique, Lesotho, Malawi, Zambia, Eswatini, and Zimbabwe. The red list was introduced in November following the emergence of the Omicron COVID-19 variant. Sajid Javid, UK health secretary, speaking at the House of Commons on Tuesday, said the Omicron variant “has spread so widely across the world”, hence the travel red list is now “less effective. Now that there is community transmission of Omicron in the UK and Omicron has spread so widely across the world, the travel red list is now less effective in slowing the incursion of Omicron from abroad, he told British lawmakers. In his words, “Whilst we will maintain our temporary testing measures for international travel, we will be removing all 11 countries from the travel red list effective from 4 am tomorrow.” The UK government had added Nigeria to the list due to the discovery of COVID Omicron cases in the country. Presently, British citizens and residents travelling from Nigeria to the UK are expected to spend £2,285 on a 10-day hotel quarantine to slow the spread of the Omicron variant. They are also required to take either a PCR or a rapid lateral flow test a maximum of 48 hours before departure. The pre-departure and arrival tests will remain. Grant Shapps, UK transport secretary, said testing measures would be reviewed in the first week of January. “As always, we keep all our travel measures under review, and we may impose new restrictions should there be a need to do so to protect public health,” he wrote in a Twitter post. On 5 December, Nigeria was placed on the UK’s red list alongside Botswana, Malawi, Mozambique, Lesotho, South Africa, Zambia, Zimbabwe, Namibia, Eswatini and Angola as part of an effort to curtail the spread of Omicron. The removal from the red alert list comes less than three days after the Nigerian government announced plans to place Argentina, Britain, Canada and Saudi Arabia on a reciprocal red list. President Muhammadu Buhari’s administration said it will also stop airlines from those countries coming into Nigeria in retaliation for the countries banning travels from Nigeria over the detection of the Omicron coronavirus variant last month, Aviation Minister Hadi Sirika said. Several countries have restricted the movement of people from some African countries since the Omicron variant was first detected in southern Africa and Hong Kong. It has since spread to at least 77 countries.

The reason given by the British government for the removal of all 11 countries from its red list is a cop-out considering that the travel ban was not rooted in science: many European countries such as the Netherlands had more Omicron cases than numerous African countries on the list such as Nigeria. This is not to say that Africa continues to retain its position as an idyll of relative stability in a world riddled by the worst excesses of the pandemic. The World Health Organisation said the continent is experiencing its fastest surge in COVID-19 cases this year, with an 83% rise in infections in the past week alone;  an increase which means that a caseload of 107,000 in the week prior rocketed to more than 196,000 new cases for the week ending 12 December. The number of new COVID-19 cases on the continent is currently doubling every five days, the shortest time frame reported this year, driven by the Delta and Omicron variants. Deaths remain low, and in fact dropped by 19 percent in the same period. The big gaps remain testing and vaccinations. As of 13 December, only 20 African countries had vaccinated at least 10% of their population, according to the WHO. Overall, only 8.3% of Africans are fully vaccinated with the most populous countries continuing to log abysmal numbers. Only 1.2% of Ethiopians, 1.8% of Tanzanians, 1.9% of Nigerians, 6.1% of Kenyans, 17% of Egyptians and 26.1% of South Africans are fully vaccinated. That figure for the Democratic Republic of Congo is 0.2% or in absolute terms, an infinitesimal 186,741 full vaccinations in a country with an estimated 2020 population of 89.5 million. At this pace, the WHO estimates it will take until May 2022 before Africa reaches 40% vaccination coverage and August 2024 before it reaches 70%. Those are worrying trend lines. While the travel ban was an act of hysteria disproportionately targeted at African countries which would have accomplished little, the new viral wave should serve as the kick in the butt that African governments need to shake out of their complacency. Unfortunately, the Omicron strain has brought to fore the problem of vaccine inequality where rich countries are prescribing multiple booster shots for their citizens while poor countries lack access to vaccines or where access exists, is often for hand-me-down jabs with a short shelf life. In this new paradigm coloured by unimaginative leadership and domestic pressure in key global capitals, Africa will almost certainly be compelled to walk a tightrope between appealing to global public opinion and wrangling with others for a diminishing vaccine pool. Either way, dependency tendencies are sure to only deepen, not loosen. Not a good look for a continent which had ample warning of and did nothing to prepare for a public health reckoning.

On border control
Leaders of West African countries have agreed to the reopening of all land borders in the region by 1 January 2022. They also welcomed the reopening of already opened borders. This was part of the resolutions reached at the 60th Ordinary Session of the Authority of Heads of State and Government of ECOWAS, held in Abuja on 12 December. “The Heads of states and government welcomed the reopening of land borders in ECOWAS for the free movement of persons,” the leaders said in a communique. At a virtual meeting of sectoral ministers, the reopening of the borders was recommended based on the economic effect the closure has had on the economy of the region. They noted at the meeting that in addition to the closure of borders on account of the COVID-19 pandemic, the member states facing security crises had also tightened security checkpoints within and at the borders of their respective countries. This resulted in a loss of 6.7% of the GDP of ECOWAS states between 2020 and 2021, the officials estimated. This corresponds to about $50 billion. Tei Konzi, said the reopening of borders for economic recovery “has now become a fundamental issue as the outbreak of COVID-19 in 2020 in West Africa adversely impacted the volume of trade and mobility of persons. The hasty closure of borders in a bid to tackle the pandemic suspended the implementation of community integration texts on the free movement of persons and goods.” Some ECOWAS member states shut their borders two years ago for different reasons including to stem the spread of COVID-19. Ghana shut her bodies in the wake of the pandemic. The border closure in Ghana led to protests by traders (in Elubo West and Aflao) who lamented the effect on their businesses. Nigeria had in 2019 shut its land borders due to the smuggling of illegal drugs, arms and agricultural products. It reopened four borders in 2020. Recently, 11 members of Nigeria’s House of Representatives sponsored a motion, seeking to reopen all the borders. Also, the border closure between Guinea Conakry and Senegal is said to have had a negative impact on the collection of revenue in the Upper River Region. The West African leaders, at their meeting, also urged member states to implement the adopted ECOWAS guidelines on harmonisation and facilitation of cross border trade and transport and mitigation of health in the ECOWAS region as it relates to COVID-19.

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For a region that insists on creating and adopting its own currency, ECOWAS has done a very poor job of facilitating trade between members of its community. Nigeria’s ill advised land border closure in 2019 did very little to achieve its intended aim of ending smuggling. It also did not stop the flow of illegal weapons into the country. Border control is important for the very reason that a region beset by mounting security challenges is yet to find common ground in tackling these challenges. The lack of political will on the part of many member states has hampered the implementation of several policies. But as the political will to reopen land borders to facilitate trade has been miraculously found, it remains to be seen if the resolutions would actually be implemented. Although West African states in theory claim to enforce border closures, in practice that is hardly the case, as many states share borders that served as pre-colonial trading posts and routes. This has made it difficult for any concerted effort at border control to be successful. On a positive note, these trading routes make it possible for informal economies around border towns to thrive. On the flip side, the inability of states to monitor activities around their borders speaks to a lack of state capacity, expanding the room for the smuggling of weapons and other economic contrabands and making the formal sector the obvious victim of any attempt at border closure. The desire to reopen all land borders following the COVID-19 economic slowdown could potentially rejuvenate the region’s economy. It could also exacerbate latent socioeconomic distortions that have hampered its progress. The region’s leaders have their work cut out. 

Talon’s clenched talons
A court in Benin on Saturday convicted one of President Patrice Talon’s main opponents for complicity in acts of terrorism. Reckya Madougou was sentenced to 20 years in prison after a trial her lawyers denounced as a political hit job. The verdict was announced at around 0600 hours local time following a trial that included no witnesses, her lawyers said. “Her crime was to have represented a democratic alternative to the regime of Patrice Talon,” said lawyer Antoine Vey. The conviction of Ms Madougou, a former justice minister, comes days after another of Talon’s leading opponents, Joel Aivo, was sentenced to 10 years in prison for plotting against the state and laundering money. Ms Madougou was arrested in March and accused of financing an operation to assassinate political figures to prevent the presidential election the following month from going ahead. Her candidacy had earlier been rejected by the electoral commission. Mr Talon won a second term with 86% of the vote in a poll boycotted by much of the opposition and marred by violent protests. Human rights groups and opponents of Talon, a multi-millionaire cotton magnate, say he has upended Benin’s democratic traditions since coming to power in 2016. Several opponents have been arrested and electoral reforms signed by Talon in 2018 disqualified all opposition parties from running for parliament the following year. Talon has denied targeting political opponents or violating human rights.

Patrice Talon’s actions come straight out of the playbook that most African despots use: intimidation of political opponents using state security forces and the judiciary and jailing them based on trumped-up charges. In Benin’s case, Mr Talon set up a court called Court for the Repression of Economic and Terrorist Crimes or CRIET which has been the tool by which he has jailed Ms Madougou and Mr Aivo in trials that both lasted less than two days. This came after the country’s electoral commission rejected their candidacies and paved the way for a Talon landslide win in the absence of viable opponents. Benin has faced political unrest for a while, with the last major protest before this year’s election cycle taking place between February and April 2019 following the commission’s decision (again) to authorise only two political parties – both from the presidential camp – to stand in the elections and to exclude all opposition candidates’ lists. Most of the unrest in Africa is fuelled by the anti democratic actions of the ruling parties which often tap into feelings of resentment and high unemployment rates. The conviction of Ms Madougou following a sham trial is perhaps the earliest indicator that Mr Talon is pushing for a tenure extension, which would probably be backed by France, while a much weakened Nigeria, on whom up to 70% of Benin’s GDP is anchored on informal trade flows, does not seem to be in the best position to oppose such an action that would surely destabilise a region already awash with armed groups and illegal arms. The irony is that Mr Talon himself was a victim of political oppression under his predecessor Boni Yayi which caused him to flee into exile in 2014. It is unlikely that regional powers such as ECOWAS will wade in – they often do so only in the case of violent regime change. The ball lies in former colonial power France’s court to exert pressure on Mr Talon to reverse his actions and cease actions that stifle his country’s democracy. Alas, that too might be too tall an ask.

Another Sahelian rupture
A regional government official said Thursday that a resurgence of tit-for-tat violence between herders and farmers has killed at least 22 people and injured more than 30 others this week in Cameroon’s Far North region. The crisis has prompted residents to flee to Chad. The Cameroonian regional official said that the region is “in a full-on inter-community conflict.” Hundreds of people fleeing the violence between Arab Choa herders and Mousgoum and Massa farmers have streamed across the border into neighbouring Chad, the mayor of Chad’s capital N’Djamena, Ali Haroun, told Reuters. According to a traditional leader in northern Cameroon, violence began over access to water. He said that “The Arab Choa wanted to take their herds to the banks of a river. Mousgoum and Massa prevented them.” He added that the problem needs to be resolved quickly because “a few months ago, there were already deaths. Today, when there is a problem between two people from different communities, all the communities get involved with weapons.” The United Nations refugee agency (UNHCR), which is responding to the crisis, said in a November report that scant rainfall had dried up rivers and seasonal ponds that communities depend on, leading to clashes in the area. A UNHCR official in the Cameroonian town of Kousseri acknowledged the conflict between the parties, saying the agency has been responding to the crisis after clashes in August and helped the government organise a reconciliation meeting last week. She said 40 villages involved in the conflict participated but that on Saturday, an Arab Choa herder tried to take his herd to the river and was prevented by farming communities, triggering a fight between the farmers and herders. On Thursday, she said the Kousseri town of around 90,000 was empty, but that the situation remained tense as armed community members regrouped. “The fighting in Kousseri has been very violent. We had to cross the river at night to find refuge here,” said Florent Mbang, who fled from Cameroon to a refugee camp in N’Djamena. He added that “Our children have not eaten since yesterday, we ask the Chadian authorities to help us, otherwise our situation here will be worse than the conflict we have at home.” Similar violence in August between Choa herders and Mousgoum fishermen killed dozens of people and forced thousands to flee to Chad.

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The clash between farmers and pastoralists in northern Cameroon is one out of numerous clashes that stretch across the entire Sahel zone from Mauritania all the way to Eritrea. These clashes at their core are about water and pasture, which has become increasingly scarce due to the effects of historic political mismanagement and climate change. However, they often take an ethnic nature as each profession is more likely to be dominated by one ethnic group or the other depending on where the clash is taking place. In Nigeria, it has the added dimension of religion which worsens the fault lines that the country sits on. In Cameroon’s far north, the conflict is also fuelled by the proliferation of illegal arms from Chad which the Libyan conflict has made abundantly available. While the Lake Chad has seen a relative rise in the amount of water recently, other water sources in the Sahel have not seen the same, and the blockage of grazing routes mean more clashes between farmers who cannot get enough water for their crops and herders looking for water for their cattle. Cameroon runs the risk of repeating Nigeria’s mistake in treating its pastoral conflict with kid gloves until it becomes a national emergency. With separatist agitation in its south and jihadist activities in its North West, Yaounde cannot afford to add another layer to its mounting security challenges. Panning out, it is very important that countries in the region are invested in reversing the impacts of climate change through multilateral cooperation and pressuring heavily-polluting countries to stay committed to climate agreements such as the one agreed recently at COP26 in Glasgow, Scotland. However, the impact of these efforts will be felt in the long-term; in the short-term, governments have to find mechanisms that will provide equitable access to natural resources through better management of land and water and encouraging a change in agricultural preferences such as ranching over nomadic herding. They also need to strengthen cross-border cooperation on the flow of illegal arms which can cause such conflicts to metastasize, strengthen state security to nip attacks in the bud, and tackle grievances between social groups that often influence how contests over land and water play out.

Gunmen Wednesday night assassinated the Katsina State Commissioner for Science and Technology, Dr Rabe Nasir. Police authorities and residents said Dr Nasir was killed in his house located at Fatima Shema Quarters in Katsina city. A few hours after the killing, bandits in their numbers stormed a mosque in Niger State where they killed 15 worshippers. Preliminary investigations revealed that the Katsina commissioner was killed in his sitting room and his corpse locked in a toilet in the house. There were traces of blood at the potion where he was killed and at the toilet where the corpse was locked. It was learnt that it took several hours for security agents to retrieve the corpse after the doors were forced open. One of the persons who saw the dead body said there were knife cuts in his belly and other parts of his body. Governor Aminu Bello Masari, top members of his cabinet and security operatives were at the residence of the commissioner when the body was removed. Police Commissioner Sanusi Baba and Director of State Security Service (SSS) were also on ground as their men forced open the door of the apartment where Dr Nasir was killed. The deceased’s phone and that of another person were recovered at the scene. The police commissioner said the assailants stormed the house of the deceased Wednesday night and killed him. In Niger State, no fewer than 15 worshippers were reportedly killed while dozens sustained injuries in a fresh attack in Ba’are village, Mashegu Local Government Area. The bandits, in their large numbers, reportedly invaded a mosque in the early hours of Wednesday when villagers were performing their early morning (Subh) prayer and killed 15 of them. Daily Trust quoted an unnamed source who spoke in confidence saying that the injured were taken to Kontagora General Hospital. The state Commissioner of Police, Monday Bala Kuryas, who confirmed the incident, however, said nine people were killed during the attack. “Niger State Police Command has already drafted security personnel to the affected area to further safeguard lives and properties in that community,” he said. The attack on Ba’are village came less than two months after bandits invaded a mosque in Maza-Kuka community in the same LGA and killed 18 worshippers during the early morning prayers.

There has been a noticeable trend in attacks on elites in Northern Nigeria. Following the death of Philip Shekwo, Nasarawa’s APC chairman in September 2020, a number of northern politicians have been either abducted or outrightly assassinated, a testament to the state of security in the region. On Wednesday, Rilwanu Abubakar Gadagau, a member of the Kaduna State House of Assembly representing Giwa Westwas killed at Kofar Gayan on the Kaduna-Zaria Road. The killing of Dr Rabe Nasir in Katsina is quite a deviation from the norm of abduction and murder, and the gruesome nature of his death makes for speculation about the motive. His death bears all the tell-tale marks of a targeted hit or an assassination, especially considering that nothing was reportedly taken from his house. It is, on the other hand, even more difficult to establish the motive for the attack on the Niger mosque other than to point out that increasingly, religious centres are not being spared in the heightened insecurity. In May, 12 Muslims were abducted in a Jibiya mosque in Katsina State, despite intelligence pointing to a possible attack at least two weeks prior. Recently, churches in Zamfara State were given a notice to shut down by a faceless armed group. The problems that make such attacks possible continue to persist: a proliferation of illegal weapons in the country; weak governance and a lack of state presence, particularly in rural areas; poor policing and a lack of capacity to isolate and treat each crime as distinct from the other. In such a scenario, it is more likely that crime will proliferate in many ways: from attacks on communities and travelers to assassinations to crimes against minority communities. Moreso, this is happening at a time when the armed services – increasingly saddled with the role of domestic policing – is in the middle of a reshuffle primarily motivated by politics. The Chief of Defence Staff, Leo Irabor, a graduate of the 37th Course of the Nigeria Defence Academy and the only member of his graduating course still in service, ordered 50 generals, largely of the 36th Course, to compulsorily retire. This bleeding of experienced talent at a time when insecurity is rising across the country is both time honoured (it is common practice within Nigerian civilian and military institutions for leaders to order mass clear-outs of senior ranking officials) and worrisome. As the security services fail to get a hang of the situation and grow insular in outlook, we foresee that more lives, cultural institutions and members of the elite would be added to the casualty list.

More than an ATM
The Guardian reports that there are “strong indications” that the Nigerian Bank of Agriculture (BoA) has technically become unsustainable and riddled with bad debt to the tune of ₦77.1 billion. This is amid failed restructuring and recapitalisation plans that had been proposed since 2019. More than two years after the bank was billed for recapitalisation through a public offer of shares predominantly targeted at farmers, processors and the public, the plan has failed to materialise. This is even as the House of Representatives is currently probing how ₦91 billion meant for the Anchor Borrowers’ Programme (ABP) was disbursed by the BoA and why the bank has been unable to recoup the loans. The Central Bank of Nigeria had, however, threatened to arrest farmers who default in paying back the ABP loans. According to the CBN Comptroller, Bauchi Branch, Saladu Idris, the bulk of the loan defaulters were rice farmers. President Buhari had in November 2015, launched the ABP to boost agricultural production and reverse Nigeria’s negative balance of payments on food. Farmers captured under this programme include those cultivating cereals (rice, maize and wheat). The programme was intended to create a linkage between Anchor companies involved in food processing and smallholder farmers of the required key agricultural commodities, through commodity associations. To date, the ABP has disbursed ₦864 billion to 4.1 million farmers growing 5.02 million hectares of land, inclusive of the ₦91 billion disbursed by the BoA. Managing Director of BoA, Kabir Mohammed Adamu, who appeared before the House of Representatives Committee on Agricultural Produce and Services during a public investigative hearing on the matter last week, said ₦14,678,423,065.03 was repaid, leaving a balance of ₦77,179,823,985.20 (principal) un-recouped as of 31 October 2021. His explanation, however, did not go down well with the lawmakers, as they sought relevant documents on disbursements, which the BoA boss failed to produce. Hon. Awaji-Inombek Abiante had asked for the hearing to be stepped down to enable the Managing Director to furnish the committee with the relevant documents as requested. According to analysts, the failure is an indication that the bank has completely gone under, with very slim chances of revival.

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There are no surprises in this outcome. The Anchor Borrowers Programme as designed and implemented following the change of government in 2015 came to be seen as gifts by the farmers and not loans that needed to be paid back. Interviews with rice farmers by SBM in two previous reports confirm this perception. It is perhaps the outcome of an institution like the CBN designing and implementing a programme that is way outside its remit and expertise. We have always insisted that the CBN has deviated from its original mandate to ensure price stability, and is rather acting as an Automated Teller Machine for Aso Rock. On the flip side, the BoA appears to have little institutional and political backing to recover disbursed funds. Indeed, it will be an arduous task for a lone federal government ministry, department or agency which can fully account for spending of public funds; this is Nigeria after all. Yet it is likely that a similar policy will be reincarnated in the near future. Africa’s largest economy needs to develop a strong culture of post mortems for policies and deciding very publicly that certain policy postures do not work and will not be repeated. There are better, more impactful ways of deploying scarce resources to drive agricultural productivity. Doling out cash, as this has shown, is not one of them.

Fifth generation drama
MTN’s Nigerian unit has been awarded a 5G license in Africa’s most populous country, paving the way for the continent’s largest wireless carrier to supply faster internet to consumers and businesses. MTN Nigeria won one of the two licenses on offer at the auction on Monday, according to the Nigerian Communications Commission. The second was granted to little known Mafab Communications Ltd beating Bharti Airtel’s Africa unit to it. Both MTN Nigeria and Mafab reached the 11th auction round where the bid price was set at $275.9 million for each of the licenses, above the $197.4 million reserve price. Nigeria aims to deploy 5G over major urban areas of the country and become Africa’s biggest network for the spectrum by 2025, Minister of Communications Isa Pantami said. “This technology will go a long way in supporting our security institutions who will leverage it and ensure that we are all secure,” he said. MTN is the country’s biggest wireless operator, while Airtel Africa, which listed in Lagos and London in 2019, vies with Globacom as the country’s second-biggest carrier.

MTN winning this bid is not surprising to anyone. It is by far the largest telco in the country and the license is clearly in line with its strategic direction of driving connectivity along multiple pillars – voice, data, fintech and value added services. The key question is about the dark horse – Mafab. Registered only last year, with no known track record in telecoms and without operations in the industry, the firm has won one of the most coveted properties in one of the few red hot sectors in Africa’s largest economy. It begs the question – who are the ultimate beneficial owners of the company? Licensing of this nature must not only be transparent but be seen to be transparent, and sadly in this case, most observers cannot say it is. This is a problem – we expect that Mafab will go on to lease its license to other operators – adding a layer of operational costs that is not needed. It is also possible that Mafab will partner with a foreign telecoms company to operate its network, which will bring some unexpected competition into the sector as it is assumed that the barriers to entry are higher: any new network will have to roll out infrastructure such as masts and base stations. Perhaps the rise of shared infrastructure through providers such as Helios and IHS Towers has made such more possible than 2009 when the youngest telco, Etisalat (now operating as 9Mobile) came into the market. There is an additional downside to this otherwise positive development, which is that the cost of running the infrastructure to support 5G is expensive, meaning that the initial cost of 5G access for the users will be more expensive than current data prices. Currently, Nigerians pay on average 0.88 USD for 1GB of mobile data. There is the added challenge of internet access altogether. Access to the internet in Nigeria only crossed the 50% mark this year, suggesting that much work remains to be done when compared to other emerging economies. There are about 108 million internet users in Nigeria and even for them, the quality of internet connectivity is highly variable as most subsist on a 2G or 3G connection. Less than half of Nigeria’s territory is covered by 4G and with 5G rolling out first in the big cities, the risk of a sort of digital apartheid where privileged users enjoy the trappings of enhanced connectivity to the exclusion of much of the rest is more than a theoretical concept. It is important to note that one of the things slowing the adoption of internet based technologies, especially fintech, is the cost to telcos of keeping network services up and running. Telcos often have to deal with local communities, who often prevent infrastructure rollout in exchange for extracting rents, provide their own electricity, deal with rising insecurity, and other macroeconomic issues that dampen profitability. Nonetheless, this week’s auction represents progress; we would be curious to see how MTN and Mafab (with important caveats) navigate the latent issues that come with operating in Nigeria to provide customers with quality internet access, a prospect likely to face stiff competition when Elon Musk’s Starlink launches in the country. With its promise to improve internet connectivity and aid the delivery of telemedicine and other needed services, Nigeria’s 5G story will be one of the defining economic themes of the next few decades.

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