A Week in Nigeria: 22 November
Highlights from Reuters coverage of Nigeria over the last seven days
In this week’s round-up: Nigeria falls into recession, authorities push against Lekki videos while general says live ammunition was present, and oil companies step up security as job losses stoke tension.
- Nigeria, which has Africa’s largest economy, slipped into its second recession in four years after gross domestic product contracted for the second consecutive quarter, showing the impact of the COVID-19 pandemic and low oil prices. Nigeria was last in recession in 2016, its first in a generation, and emerged the following year. But growth has been fragile and the pandemic has hit the economy hard, amid low oil prices. The continent’s top oil exporter relies on crude sales for 90% of foreign exchange earnings. “Q3 2020 Real GDP contracted for second consecutive quarter by -3.62%,” Yemi Kale, the statistician general, said on Twitter. “Cumulative GDP for the first 9 months of 2020 therefore stood at -2.48%,” he added. The oil sector contracted by 13.89% in the third quarter against growth of 6.49% in the same period a year earlier, according to data cited by Kale, while the non-oil sector shrunk by 2.51% in the three-months to September. Following Nigeria’s first confirmed COVID-19 case in late February, lockdowns were imposed from late March until early May in the main cities — economic hub Lagos and the capital Abuja. Lockdowns were also imposed in some of the country’s others states and a ban was placed on inter-state travel. “The performance of the economy in Q3 2020 reflected residual effects of the restrictions to movement and economic activity implemented across the country in early Q2 in response to the COVID-19 pandemic,” the statistics office said in a report published on Saturday. “As these restrictions were lifted, businesses re-opened and international travel and trading activities resumed, some economic activities have returned to positive growth,” it said. The government had previously said it expected the economy to contract by as much as 8.9% this year in a worst-case scenario without stimulus.
- The fallout from the shooting of protesters campaigning against police brutality continued to dominate headlines. The shooting at a protest site in the affluent Lekki district of Lagos on 20 October prompted global shock and condemnation. Witnesses said soldiers carried out the shooting. The army initially denied being at the site. Rights group Amnesty International accused the army and police of killing 12 people that night in two Lagos districts — Lekki and Alausa. This week the information minister said Nigeria should sanction CNN for a report that the country’s military shot and killed protesters. Lai Mohammed told a news conference in Abuja that the U.S. broadcaster used “unverified and possibly doctored videos” and “information from questionable sources” in the report. When asked, Mohammed did not specify how the government might sanction CNN. The U.S. channel defended its reporting.
- Still on the subject of video evidence, a judicial panel investigating claims that soldiers shot dead peaceful protesters viewed footage appearing to show people hurt or saying that they were being fired on, but an army general dismissed the footage. Brigadier General Ahmed Taiwo, who heads the army’s 81st Division in Lagos, also said soldiers had been deployed to the protest with both live rounds and blanks, having previously told the panel only blanks were used. In his testimony last week, Taiwo said soldiers had fired blank rounds only, into the air, to disperse protesters. But on Saturday, he said soldiers had been sent with live rounds too. “The soldiers would be given both live and blank bullets,” he said. “We saw that these protests had been infiltrated by some hoodlums. That is why they were armed with blank ammunition in addition to the live they were carrying.” At its hearing on Saturday, the panel watched surveillance camera footage of events at the toll gate on the evening of Oct. 20 as well as videos submitted by others. One video, supplied by the army, appeared to show a person lying in a pool of blood. “We discovered it was a fake video,” Taiwo said, adding that the footage had been found online. The panel viewed other videos including one where a voice, amid the sound of gunfire, said: “They are shooting at protesters”. Another showed a crowd, where a woman shouted: “They are shooting at us!” Taiwo said: “Many of these videos there were manipulated.”
- Oil companies have asked security services to tighten surveillance as violent anti-police brutality protests and the expected sacking of hundreds of workers worsen desperation in the region, industry sources told Reuters. Already unemployment is above 40% in Nigeria’s energy regions and observers say further job losses could aggravate problems of pipeline tapping, illegal oil refining and pirate attacks. Three sources close to the companies, speaking on condition of anonymity, told Reuters the majors had asked for tougher surveillance, and non-government organisations said crime was a risk. “It’s going to increase the desperation in the region, which leads to criminality,” said Ken Henshaw, executive director at Port Harcourt-based NGO We The People. Oil major Chevron plans to cut 25% of its Nigeria workforce, which IndustriALL Global Union said included 1,000 jobs. Already, the oil companies do not provide enough jobs to satisfy employment needs in the region, which has few other industries. Union PENGASSAN has threatened strikes over 65 job cuts at oil services firm Baker Hughes. At the end of 2017, Chevron had 5,377 employees and contractors in Nigeria. A spokesman did not provide an updated figure or say if that had changed substantially. The Ijaw Youth Council, which represents local people, said it expected thousands more cuts as other oil majors retrench.
- Annual inflation in Nigeria rose in October for the 14th month in a row, hitting a more-than two-year high, the National Bureau of Statistics said as. galloping food prices drove the overall rise. Inflation rose to 14.23% in October, compared with 13.71% in September. A separate food-price index showed inflation at 17.38% last month, compared with 16.66% in September. “This rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, vegetable, alcoholic and food beverages and oils and fats,” the statistics office said in its report. Nationwide protests against police brutality last month blocked roads in major cities, and curfews were imposed in several states to quell unrest. Nigeria was already reeling from the impact of the pandemic. “Nigerian inflation continued its acceleration in October, led by the pressure on food prices,” said Razia Khan, chief economist for Africa and Middle East at Standard Chartered bank. “Although not unrelated to disruptions in the month, the print will cast a spotlight on the current very low levels of market interest rates,” she said.
- The Nigerian bourse won approval from its members for a stock market flotation that will turn the exchange into a publicly traded company and position it as a gateway for foreign investment. The exchange received backing for the listing at its annual meeting, it said, paving the way for share offerings to the public. It will not be issuing new shares in the listing. “We believe we can become a financial hub for Africa and with the backing of our stakeholders … this objective can become a reality,” said Nigeria Stock Exchange CEO Oscar Onyema, who is also group CEO under the new structure.The exchange began changing its ownership structure from a mutual company of stockbrokers in 2017, adding new shareholders in a process known as demutualisation. It has re-registered as a profit-making entity owned by shareholders, called the Nigerian Exchange Group Plc. It had been operating as a not-for-profit entity. The approval allows the exchange to list 2 billion ordinary shares of 0.50 naira. It has not set a date for the listing, in which stockbrokers will hold 78% of the shares. The bourse, the second biggest in sub-Saharan Africa and one of the main entry points to invest on the continent, has around 200 listed companies, all included in its benchmark share index . Johannesburg Stock Exchange (JSE), the continent’s biggest and most developed stock market, has been a listed company since 2006. Despite having Africa’s largest economy, Nigeria’s equities market has seen sell-offs this year after dollar shortages caused by the impact of COVID-19 hit confidence and deterred foreign investors. But stocks have been rising since October after the central bank cut interest rates the previous month to spur growth, and as local funds piled into equities due to low bond yields. The index has so far risen 27.6% this year.
- And the naira is expected to weaken on the black market in the coming week as demand pressure resurfaces with importers stocking up goods ahead of Christmas sales in the wake of dollar shortages from official sources, traders said. The naira fell to 478 per dollar on the black market on Thursday after it hit a 12-week low of 475 on the parallel market on Monday. The currency was quoted on the official market at 381 per dollar, a level it has been at since July. Traders had expected the naira to trade flat on the black market amid hopes higher oil prices would boost Nigeria’s dollar flows but demand is swelling faster than had been anticipated, traders said. The naira traded at 385.93 on the over-the-counter spot market, widely quoted by investors and importers, on thin volumes.