A Week in Nigeria: 21 December

Highlights from Reuters coverage of Nigeria over the last seven days

In this week’s round-up: President Buhari signs 2020 budget, financial crimes agency holds ex-attorney general over $1.3bn oil deal probe, and inflation climbs for third month.

  • President Muhammadu Buhari approved a record 10.59 trillion naira ($34.6 billion) budget for 2020, marking the leader’s first spending plan not beset by major delays. The president’s signature paves the way for a likely return to the international debt market next year as Nigeria still struggles to shake off the impact of a 2016 recession it emerged from the following year. The administration will send parliament a borrowing plan for 2020–2022 to help finance the deficit budget, Buhari said, without giving further details. The budget, passed by lawmakers earlier this month, assumes a deficit of 1.52% of the estimated gross domestic product — representing around 2.18 trillion naira — to be financed through foreign and domestic borrowing. Crude production is assumed at 2.18 million barrels a day with an oil price of $57 per barrel, according to the spending plan. Nigeria is Africa’s top oil producer. Buhari’s first-term budgets were only approved well into the spending plans’ affected years, after tussles with opposition lawmakers and ruling party politicians who disagreed with the presidency’s fund allocations. But since Buhari’s re-election last February those days have ended. His win came with parliamentary victories for loyalists in his All Progressives Congress party. The president’s supporters drew attention to both the time frame in which the budget was passed and the fact that Buhari signed it into law on his 77th birthday.
  • Former attorney general Mohammed Adoke was detained by the financial crimes agency upon his return home as part of an investigation into one of the oil industry’s biggest suspected corruption scandals. Adoke, who has previously denied any wrongdoing, was arrested by Interpol in November after travelling to Dubai for a medical appointment. He voluntarily flew back to the West African country on Thursday, his lawyer said. The Economic and Financial Crimes Commission (EFCC) investigation relates to the $1.3 billion sale of a Nigerian offshore oilfield known as OPL 245 by Malabu Oil and Gas in 2011. Eni SpA and Royal Dutch Shell Plc jointly acquired the field from Malabu, which was owned by former petroleum minister Dan Etete. The sale of the oil field has spawned legal cases across several countries, involving Nigerian government officials and senior executives from Eni and Royal Dutch Shell. Shell and Eni, and their executives, have denied any wrongdoing. Etete has also denied wrongdoing. “His return to Nigeria clears the way for him to answer to the charges against him,” the EFCC said in a statement, following Adoke’s return to Nigeria.
  • Annual inflation in Nigeria rose for the third straight month in November, marking the longest run of increases in almost two years as prices climbed across all categories measured by the statistics bureau. In August, Nigeria closed parts of its borders to fight smuggling of rice and other goods, a move which has exacerbated inflation according to customers and economists. The head of customs confirmed in October that all trade in goods via land borders had been halted indefinitely. Annual inflation was 11.85% in November, up from 11.61% in October, the National Bureau of Statistics said, citing broad price increases. That makes the three-month inflationary run the longest since January 2017, and the highest rate since April 2018. Consumer inflation had dropped to its lowest in almost four years in August. A separate food price index showed annual inflation at 14.48% in November, compared with 14.09% a month earlier.
  • Our colleagues at the Thomson Reuters Foundation published a powerful feature about people in Lagos who have have been priced out of the property market and seek shelter in abandoned buildings. Many turn to agents who lease space in abandoned and often unfinished buildings in areas like the Lagos Island district for about 200 naira ($0.65) a night. Lagos’s attractive location on a lagoon has only fuelled its population, which the U.N. estimates could double by 2050, and rental prices, according to real estate experts. Estate agent Moses Fiarama said that “a lot of the houses in Lagos are overpriced”. “If we consider the minimum and average wages of the people living in Lagos, we can’t say the market for houses is working properly,” he added. With urban planning far outpaced by the city’s growth, an overabundance of businesses has packed its island portion, said Oluwatosin Ajani, a Lagos-based financial analyst for BlackHouse Media, a public relations agency. “The mega-city plan is essentially a gentrification project,” he said. “The government displaced a few waterfront communities, people that have existed in those spaces for generations,” he said. “Of course, there is no home for them.” Idris Salako, commissioner for the Lagos state ministry for physical planning and urban development, said the government wants to make the city “a 21st century economy and destination for investment”. “A lot of structures that are uncompleted or abandoned in the city may be distressed and not fit for habitation,” he said.
  • India’s foreign ministry said that 20 of its nationals had been kidnapped from an oil tanker in West African waters, where piracy has been on the rise. “Our Mission in Abuja has taken up the matter with the Nigerian authorities, as also with the authorities of the neighbouring countries,” the ministry said in a statement. It said the vessel was the Marshall Islands-flagged DUKE. The ship’s operator Union Maritime wrote on its website that the craft was “attacked and boarded” while carrying fuel oil to the Togolese capital Lome from Angola and that the company was working with relevant authorities to resolve the incident. The shipping industry has warned in recent months about increased incidents of piracy and kidnapping in the Gulf of Guinea, particularly around Nigeria. Pirates on Dec. 5 kidnapped 19 crew members, all but one of them Indian nationals, from a supertanker off Nigeria chartered by French oil major Total to deliver crude oil to India.
  • And - in a heartwarming break from piracy, galloping inflation and life in abandoned buildings - we spoke to Nigeria’s fastest eight-year-old swimmer. His friends call him Bullet.

Nigeria bureau chief for Reuters. Ghanaian family, British accent. Ex-BBC, before that newspapers.