A Week in Nigeria: 24 August
Highlights from Reuters coverage of Nigeria over the last seven days
In this week’s round-up: President Buhari assigns portfolios to his ministers, central bank says it will defend reserves after $9 billion UK court judgment, and Nigeria marks three years free of wild polio.
- President Muhammadu Buhari swore members of his cabinet into office, assigning a new minister of state for petroleum in Africa’s top producer of crude oil. It didn’t take as long to make those appointments as the six months it took in his first term, but it did take three months after being sworn in. Buhari kept the petroleum portfolio for himself, as in his first term, and appointed Timipre Silva as the junior minister, who is widely expected to manage the portfolio on a day-to-day basis. Silva, a former governor of Bayelsa state in the southern Niger Delta oil production heartlands, replaces former ExxonMobil executive Emmanuel Kachikwu who was the country’s main representative at OPEC meetings. The move to assign portfolios comes six months after Buhari won a presidential election and nearly three months after his second term began. The time taken to appoint ministers caused jitters amongst investors and threatened growth prospects. Zainab Ahmed, who became finance minister in September last year after her predecessor resigned, retained the position with additional responsibilities for the budget and national planning.
- “We have seen an exodus of the more capable and technocratic ministers and in their place there are politically connected replacements,” said Malte Liewerscheidt, vice president at Teneo Intelligence. He said some of the new entrants were stalwarts in Buhari’s ruling All Progressives Congress (APC) party, who appear to have been rewarded for helping him to win February’s election, while others were part of a bid to solidify the party’s base in some parts of the country ahead of elections in 2023. “There are no real surprises here. The potential for positive change is rather limited,” said Liewerscheidt. We profiled some of the key ministers in Buhari’s second cabinet.
- The central bank will strive to protect the country’s currency reserves after a British court ruling granted a small natural gas firm the right to try to seize $9 billion in assets from Nigeria’s government, said its governor. Such a sum would be one of the largest financial liabilities imposed on Nigeria in its history, representing 20% of the currency reserves of Africa’s largest economy and top oil producer. Central Bank Governor Godwin Emefiele said Nigeria had sufficient grounds to appeal the ruling, over an aborted gas project in the southern Nigerian city of Calabar, made just over a week ago in favour of Process and Industrial Developments Ltd. “We know that the implication of that judgment has some impact on monetary policy, and that is why the central bank is going to step forward and … defend the reserves,” Emefiele told reporters in the capital, Abuja. However, he did not say what other measures the central bank might take to defend the country’s currency or its foreign exchange reserves. Pressure has been building on the naira as oil prices drop and foreign investors lock in their profits on local bonds as yields have fallen from as high as 18% a year ago. As yields have fallen, foreign inflows have slowed, in turn leading to a shortage of dollars and hurting the naira.
- Nigeria marked three years free of endemic wild polio with health officials saying the nation’s progress in fighting the crippling viral disease could result in the whole of Africa being declared polio-free early next year. The three-year milestone sets in motion a continent-wide process to ensure that all 47 countries of the World Health Organization’s African region have eradicated the virus, health officials said. Africa’s last case of wild polio was recorded in Nigeria’s Borno State in August 2016. “We are confident that soon we will be trumpeting the certification that countries have, once and for all, kicked polio out of Africa,” the WHO’s regional director for Africa, Matshidiso Moeti, told reporters in a telebriefing. Polio is a viral infection that attacks the nervous system and can cause irreversible paralysis within hours. Children under five are the most vulnerable, but people can be fully protected with preventative vaccines. Wild polio remains endemic in Afghanistan and Pakistan, but case numbers worldwide have been reduced largely because of intense national and regional immunisation for babies and children.
- Nigerian stocks extended their rally on Friday to a three-week high following President Buhari’s inauguration of cabinet ministers, boosting hopes for reforms that could lift growth, traders said. Assigning portfolios in a cabinet made up of political loyalists lifted a layer of uncertainty for reforms. The stock market rose for the third session on Friday to 27,830 point, up 0.73%. Analysts said the rise was a relief rally and that half-year corporate results, particularly from banks, were also supportive. Local banks have been trading at low book values, weighed down by weak sentiment over the economy. Stocks had been on a losing streak since the end of May, when Buhari was sworn in, due to his failure to appoint a cabinet months after winning a second term in February’s election. That prompted foreign investors to trim their holdings. However, bonds had seen foreign inflows as the central bank’s tight monetary policies boosted yields.
- A feature about Ghana riding a wave of slave heritage tourism threw up an interesting contrast with Nigeria. This year marks 400 years after the trade in Africans to the English colonies of America began. And this month’s anniversary of the first Africans to arrive in Virginia has caused a rush of interest in ancestral tourism, with people from the United States, the Caribbean and Europe seeking out their roots in West Africa. The increase in tourism has been an economic boon for Ghana, which unlike other West African countries has aggressively marketed its “heritage” offerings for the anniversary. The Ghana Tourism Authority expects 500,000 visitors this year, up from 350,000 in 2018. Of those, 45,000 are estimated to be seeking their ancestral roots, a 42% increase from last year. Ghana’s well-preserved slave forts stand in contrast to the offerings in Nigeria. In Nigeria, the main sites commemorating the slave trade are three small museums along a road in the coastal town of Badagry. Artefacts including chains used to shackle slaves are spread across the museums, two of which are small single-story buildings with corrugated iron roofs. Foreign tourists are rare at the site, and a large proportion of visitors are schoolchildren on tours. The poor state of local roads, dotted with potholes, make it hard to visit Badagry: The 65-kilometre (40-mile) journey from Lagos takes around three hours.