A Week in Nigeria: 16 May

Highlights from Reuters coverage of Nigeria over the last seven days

Style gurus across Africa are marrying fashion and function by donning striking masks that make a statement

In this week’s round-up: Nigeria looks set to maintain record 2020 budget, oil output cut by a quarter to fall in line with OPEC agreement, President Buhari appoints ex-UN diplomat as chief of staff, and style-conscious Africans turn compulsory masks into fashion accessories.

• Nigeria looks set to maintain its record 2020 budget of more than 10.5 trillion naira after a boost to healthcare spending to fight the novel coronavirus outweighed an earlier cut to cushion the impact of an oil price crash. Following a cabinet meeting, Finance Minister Zainab Ahmed said that minsters approved a revised budget of 10.52 trillion naira — only slightly lower than 10.59 trillion naira approved in December by President Muhammadu Buhari. She said spending related to COVID-19 had not been previously captured. Ahmed told reporters the budget revisions approved at the ministerial meeting assumed an oil price of $25 per barrel along with output of 1.94 million barrels per day and an exchange rate of 360 naira to $1, a framework for its 2020–2022 spending plan. Ahmed said the budget would be financed from local and foreign borrowings as well as proceeds of privatisation to the tune of 5.36 trillion naira to plug the deficit. She did not identify the assets to be sold. The proposals, which mark a shift after weeks in which the government said there would be swingeing cuts, require parliament’s approval before being signed into law by the president. With global oil prices plunging, the government had previously said this year’s budget would shrink by about 15% and that it would switch to domestic naira borrowings. However, Ahmed said on Wednesday that the reduction amounted to just 71.5 billion naira to “adequately respond to the COVID-19 pandemic”. The coronavirus outbreak and an oil price plunge have magnified headwinds in the Nigerian economy, which relies on crude sales for government revenues, triggering a historic decline in growth and large financing needs as well as weakening the naira. The government expects the economy, which recently recovered from a 2016 recession, to shrink by 3.4% this year.
• Nigeria has reined in oil production to bring Africa’s top crude exporter into line with an agreement among producers to curb output, Minister of State for Petroleum Timipre Sylva said. “The cut for Nigeria is about 417,000 barrels per day (bpd), which is about 23% of our production. And of course, as at the end of April, we have complied,” Sylva told reporters. The Organization of the Petroleum Exporting Countries (OPEC) and others led by Russia agreed in April to a record output reduction of 9.7 million bpd for May and June as the coronavirus pandemic has slashed demand. Under the deal, Nigeria should cap production at 1.41 million bpd in May and June.
• President Muhammadu Buhari appointed former United Nations diplomat Ibrahim Gambari as his new chief of staff. Gambari was Nigeria’s minister for external affairs during Buhari’s military regime from 1984 to 1985, and later became an under-secretary-general at the United Nations. He replaces Abba Kyari, who died last month after contracting the coronavirus and was one of the most powerful men in Nigeria, acting as a gatekeeper to the president.
• Struggling e-commerce platform Jumia Technologies reported an almost 7% fall in first quarter revenue due to supply chain disruptions, particularly in China, but saw lower cash burn and signs that lockdowns were hastening a shift towards online shopping in Africa. Jumia was the first Africa-focused tech start-up to go public on the New York Stock Exchange and reached a market capitalisation of over $1.5 billion just days after it listed last April. But the company has struggled to find its way, and its share price has tumbled some 90% from its peak a year ago. The results, which caught the beginning of the coronavirus outbreak on the African continent, showed the lowest losses in earnings before interest, taxes, depreciation and amortization in six quarters, at 35.6 million euros. But revenue fell to 29.3 million euros. China is a key supplier of electronics and mobile phones sold on the platform. Still, during an earnings call on Wednesday, founders Sacha Poignonnec and Jeremy Hodara said they saw opportunities amid the pandemic.
• Fashion lovers in the continent’s biggest cities are combining style and safety by donning colourful masks, sometimes coordinating the fabric with their outfits. Many African countries have made it compulsory to wear masks in public to prevent the spread of the novel coronavirus. Across Africa, the trend is proving a boon to local tailors and designers who are making the masks. We heard from a designer in Lagos who sported a gold-coloured mask, studded with sparkling diamante jewels, that matched her floor-length dress. “When you come out in a stylish mask or with an accessory such as this, it doesn’t seem as though we’re fighting a war. It seems more fun,” she said. We also heard from fashionistas in Dakar and Johannesburg.
• Nigeria’s cocoa mid-crop output is expected to be weak as measures to curb the spread of the coronavirus hindered farmers and exporters, creating a backlog of unshipped beans, the president of the cocoa association told Reuters. Mufutau Abolarinwa said some of April’s orders were still being exported after lockdowns disrupted transport and port activities. Around 5,000 to 6,000 tonnes of beans were stuck at Lagos port and warehouses in the country, he said. Nigeria is the world’s fifth-biggest cocoa grower, and its mid-crop — harvested between May and September — comes in at between 50,000 and 60,000 tonnes when weather conditions are good and chemicals readily available to spray diseased trees. The government last week eased month-long lockdowns in commercial hub Lagos state, neighbouring cocoa producing state Ogun and the capital Abuja. But interstate movement has been banned, creating a headache for cocoa delivery. Ships are being quarantined at the port, creating extra storage costs. Trading houses are anxious to receive their shipments, Abolarinwa said, noting that delays could affect demand for further beans from farmers, especially as the mid-crop harvest is about to start.

• We reported on how some of Nigeria’s top comedians are working health tips into their routines to spread the word about COVID-19. Authorities have put out regular advice on avoiding large gatherings and the importance of washing hands — but trust in the government is low and conspiracies and bogus health tips spread fast on social media. Nigeria’s health ministry has spotted the trend and enlisted popular comedian Bright Okpocha, aka Basketmouth, to appear in a public service video about the dangers of spreading misinformation. The messages are getting through, said Cyril Oto-Obong, a comedy fan who works as an accountant in Lagos. “It is not everyone who understands the safety measures when it is spoken in English, but once a comedian makes it a laughing matter, one thing is it will make people pay attention.”