A Week in Nigeria: 30 January

Highlights from Reuters coverage of Nigeria over the last seven days

President Muhammadu Buhari appointed new military chiefs in a move that surprised many

In this week’s round-up: President Buhari names new military chiefs, Nigerian farmers win Dutch court case over Shell oil spills, and pirates kidnap Turkish crew members.

• Nigerian President Muhammadu Buhari has appointed a new military high command after years of mounting criticism over spreading violence by Islamist insurgents and armed gangs. “President Buhari thanks the outgoing Service Chiefs for what he calls their ‘overwhelming achievements in our efforts at bringing enduring peace to our dear country’,” a presidency spokesman said. He later told Reuters that some of the chiefs had resigned while others retired. Leo Irabor was named to the powerful Chief of Defence Staff post, which oversees the main military branches, the presidency spokesman said, while I. Attahiru, A.Z. Gambo and I.O. Amao would command the army, navy and air force respectively. Hopes were high after initial successes pushing back Islamist Boko Haram insurgents in 2015 and 2016, but with the rise of Islamic State’s West African branch, formerly part of Boko Haram, the military ceded many of its gains. Now, swathes of the northeast of Africa’s most populous country and biggest oil producer are out of government control, with soldiers hunkered down in defensive positions and regularly killed by insurgents while on patrol. Armed gangs have surged through Nigeria’s northwest since Buhari was first elected in 2015, kidnappers patrol many of the country’s roads and conflict between farmers and herdsmen has frequently spiked. In the Gulf of Guinea where Nigeria’s offshore oil wealth is concentrated, piracy is on the rise. As disorder has worsened, the military has also attacked civilians, drawing condemnation from many countries that have since often refused to sell weapons and equipment to Nigeria — supplies the government says are needed to neutralise insurgents undermining public security. Last October, police and soldiers killed at least 12 people in Lagos taking part in protests against police brutality, according to witnesses and rights group Amnesty International. Security forces have denied the allegations.
• A Dutch appeals court held Royal Dutch Shell’s Nigerian subsidiary responsible for multiple oil pipeline leaks in the Niger Delta and ordered it to pay unspecified damages to farmers, in a victory for environmentalists. The case was brought in 2008 by four farmers and environmental group Friends of the Earth, seeking reparations for lost income from contaminated land and waterways in the region, the heart of Nigeria’s oil industry. Although only Shell subsidiary SPDC was found to be directly responsible, the Dutch ruling could open the door for more environmental cases against oil companies. It also adds to Shell’s legal woes. In November, it lost a Nigerian high court case that could lead to $44 million in damages for spills. In March, a Milan court is set to deliver a verdict in one of the oil industry’s biggest-ever corruption trials in Italy, involving Italy’s Eni and Shell. Friday’s decision went a step further than a 2013 ruling by a lower court, saying that Shell’s Nigerian subsidiary was responsible for multiple cases of oil pollution. The appeals judge sided with the farmers in four of six spills covered by the lawsuit and postponed a verdict in the remaining cases, where the lower court had previously found SPDC responsible. Shell said in a statement it continues to believe the spills were caused by sabotage. “We are therefore disappointed that this court has made a different finding on the cause of these spills and in its finding that SPDC is liable.” The appeals court said Shell had not proven “beyond reasonable doubt” that the oil spills had been caused by sabotage, rather than poor maintenance.
• Pirates off Nigeria’s coast kidnapped 15 sailors from a Turkish-crewed container ship in the Gulf of Guinea in a brazen and violent attack that was farther from shore than usual. One sailor was killed in the raid, an Azerbaijani citizen, while those kidnapped are from Turkey, according to the respective governments and a crew list seen by Reuters. Accounts from crew, family members and security sources described a sophisticated and well-orchestrated attack on Saturday in which armed pirates boarded the ship and breached its protective citadel, possibly with explosives. Pirates in the Gulf, which borders more than a dozen countries, kidnapped 130 sailors in 22 incidents last year, accounting for all but five of those seized worldwide according to an International Maritime Bureau report. The attack on the Mozart could raise international pressure on Nigeria to do more to protect shippers, which have called for tougher action in recent weeks, analysts said. “The fact that someone died, the number of people taken and the apparent use of explosives to breach the ship’s citadel means it is a potential game-changer,” said David Johnson, CEO of the UK-based EOS Risk Group. “It’s clearly quite sophisticated and if pirates have decided to use munitions it’s a big move,” he said. There is “no doubt” those kidnapped will be taken back to Nigeria’s Delta and Turkey will have little hope stopping it, he added. Kidnappings by pirates in the Gulf of Guinea hit a record in 2020. We looked at the reasons behind the rise in attacks in the Gulf of Guinea in an explainer feature.
• The central bank plans to bar exporters who fail to remit dollar proceeds home from banking services by the end of January, its governor said, in its latest attempt to try to boost foreign exchange liquidity to support its weakening naira. Nigeria has been rationing dollars after devaluing the naira twice last year on the official market to narrow the gap with the black market, part of reforms to meet a $1.5 billion World Bank loan condition, which is yet to be approved. But dollar shortages have worsened with lower oil revenues. In December, the central bank eased rules on remittances to attract more diaspora dollars after the naira crossed 500 on the black market. The bank has now turned its spotlight on exporters. “We have been begging … cajoling … people who have exported to repatriate their proceeds,” Governor Godwin Emefiele said during its first monetary policy committee meeting on Tuesday. Emefiele said the bank will use its powers to prevent exporters that fail to comply from banking activities. The central bank has asked top lender Zenith Bank to ensure that $26.14 million in export proceed is repatriated by Jan. 31, a letter seen by Reuters.
• The central bank held its benchmark lending rate at 11.5% at the interest rate meeting of 2021, as it battles to combat rising inflation and a recession. Governor Godwin Emefiele said all 10 members of the monetary policy committee voted to stick with the current rate. The bank cut rates twice last year to try to stimulate an economy that has been hobbled by the COVID-19 pandemic and an oil price crash.

• Nigeria evacuated hundreds of its citizens from Saudi Arabia after they overstayed their visas and were left stranded. The first returnees, clad in masks and flowing robes, could be seen walking across the tarmac after their plane landed in the capital Abuja. High unemployment and two recessions in four years have pushed thousands of Nigerians to seek work overseas. But the coronavirus pandemic has reduced employment opportunities in other countries and travel restrictions have left many stranded. A video circulating on social media in recent weeks had shown Nigerians who said they had been held in a camp in Saudi Arabia for more than three months while other countries had flown out their stranded citizens within two weeks or so. “A camp generally is not a luxury hotel, but when people have waited for some time agitation comes in,” said Akinremi Bolaji, a foreign affairs ministry official.
• And Nigeria’s parliament will pass the long-delayed Petroleum Industry Bill by the second quarter of 2021, Senate President Ahmed Lawan said during a parliamentary session. The measure, which is 20 years in the making, underpins everything from oil exploration to gas pipelines and fuel regulation and was sent by President Muhammadu Buhari to the Senate in September. It passed a first reading in both chambers before the end of 2020. “This bill will be passed the second quarter of this year,” Lawan said, adding that lawmakers were targeting April or May. The head of Nigeria’s state oil company said in June that despite delays caused by the COVID-19 pandemic the bill would be passed by the end of 2020, marking the latest missed target in two decades. The bill would change the structure of state oil company NNPC, amend oil and gas taxes and revenue-sharing and create new regulatory bodies, among other things, to make Nigeria’s oil sector more dynamic and efficient. The laws governing Nigeria’s oil and gas exploration have not been fully updated since the 1960s because of the contentious nature of any change to oil taxes, the terms of exploration, and revenue-sharing. Feelings ran high at the House of Representatives when the bill was discussed in a public hearing with angry words quickly descending into a fight.