A Week in Nigeria: 6 June
Highlights from Reuters coverage of Nigeria over the last seven days
In this week’s round-up: Nigeria under pressure to comply with OPEC cuts, first marginal oilfields round in nearly 20 years, basic healthcare budget cut in revised spending plan despite coronavirus outbreak, and campaigners try to raise awareness about sexual violence.
- OPEC, Russia and their allies held talks on Saturday on extending record oil production cuts that have doubled oil prices since April. Nigeria is under pressure to deliver better compliance with output quota, as is Iraq. Nigeria’s oil minister said he expected an extension deal, which already has the backing of Russia and Saudi Arabia, to be concluded in the video conference despite “reservations of one or two member countries,” which he did not name. OPEC sources said an extension was contingent on compliance as countries that produced above their quota in May and June must compensate by cutting more in future months. Nigeria’s petroleum ministry said Abuja backed the idea of compensating for its excessive output in May and June. “Nigeria reconfirms our commitment under the existing agreement,” Nigeria’s Ministry of Petroleum Resources said in a statement on Twitter ahead of the talks. It said it also “subscribes to the concept of compensation by countries who are unable to attain full conformity (100%) in May and June to accommodate it in July, August and September”. The alliance known as OPEC+ previously agreed to cut supply by a record 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Cuts were due to taper to 7.7 million bpd from July to December. An OPEC source said OPEC+ was expected to agree to extend deep cuts throughout July, while the situation would be reviewed later in June to decide on any further extension. Riyadh had been considering an extension to August or even December, OPEC sources had said before the talks.
- Nigeria launched its first licensing round for marginal oilfields in nearly 20 years, the Department of Petroleum Resources (DPR) said, despite court rulings last week that barred some of the fields from being auctioned. The DPR’s director, in a conference call following the launch, said authorities expected to receive all bids and supporting information within 10 weeks. Marginal fields are smaller oil blocks that are typically developed by indigenous companies. The new licensing round is the first marginal field round since 2002, which the country hopes will boost oil output and bring in much-needed revenues from fees associated with the licences. “A total of 57 fields located on land, swamp and shallow offshore terrains are on offer,” the DPR said in a statement posted on its Twitter feed. Nigeria revoked the existing licenses on the fields so that they could be put into the new licensing round. The licensing round was announced even though judges in Lagos have blocked Nigeria’s efforts to revoke two existing oilfield licences, court documents seen by Reuters showed. The Ororo field, OML 95, and the Dawes Island Marginal Oil Field, formerly called OML 54, were among 11 licences revoked by the Department of Petroleum Resources in April. All 11 were set to be included in the marginal field licensing round. Two different judges in Lagos granted decisions on May 27 that halt the inclusion of the two fields in any licensing round, the court documents seen by Reuters showed.
- The relaxation of coronavirus restrictions on places of worship began on Tuesday. Boss Mustapha, the country’s most senior civil servant who revealed the move in his role as chairman of the presidential task force for COVID-19, also announced that the lockdown in the northern city of Kano would be eased. “Nigeria has not reached the peak of confirmed cases,” Mustapha told reporters. Another official said the aviation industry had been asked to prepare for the possible resumption of domestic flights from June 21. He added that a national curfew would be shortened to 10 p.m.-4 a.m. from Tuesday, from the current 8 p.m.-6 a.m. order. Other curbs remain in place, such as a ban on interstate travel, with a few exceptions, such as for essential workers. And face masks must still be worn in public.
- The Senate approved President Muhammadu Buhari’s request for $5.51 billion in external borrowing from international lenders. The borrowing is part of a revised budget for 2020. The revisions allow for the effects of the coronavirus pandemic and a sharp drop in oil prices, which has dented Nigeria’s spending plans because oil sales make up 90% of its foreign exchange earnings. The money from the International Monetary Fund, African Development Bank, World Bank and Islamic Development Bank is to fund the deficit. “As regards the IMF loan, there are no usual onerous conditions for borrowing, such as currency devaluation and deregulation of certain sectors of the economy attached to this loan,” a Senate committee on the loans stated. Buhari submitted a revised budget of 10.51 trillion naira ($29.19 billion) to parliament last week for approval. Lawmakers can make changes to the budget, before it is sent back to the president to pass into law should he agree to any revisions. Borrowing requests must be approved separately by lawmakers.
- Nigeria is proposing slashing its basic healthcare funding by almost half as government finances take a hit from the novel coronavirus pandemic and low oil prices, according to the latest budget proposal documents. The planned healthcare cuts come as Nigeria’s coronavirus outbreak steadily worsens, and are part of a 2020 budget revision carried out because of the pandemic. The government proposes cutting its basic healthcare funding by 43% from its original 2020 budget to 25.6 billion naira ($71 million), according to the budget proposal, now with parliament before final presidential approval. Annually, basic healthcare has received at least 1% of Nigeria’s consolidated revenues fund, which makes up part of the pool for the yearly budget and has been hit by lower oil revenues. A spokesman for the finance ministry, which handles the budget, said basic healthcare “has improved and increased with the interventions” to fight coronavirus, but did not provide details. The health ministry and chair of the upper house of parliament’s budget committee did not respond to requests for comment. Presidency spokesmen declined to comment. Nigeria has more than 11,000 confirmed coronavirus cases and over 300 deaths. It has earmarked 500 billion naira ($1.39 billion) to tackle the outbreak. But reduced funding for basic healthcare threatens to undermine an already hollowed-out medical system.
- Rights campaigners took to the streets of the capital Abuja on Friday to raise awareness about sexual violence in the West African country after a series of high-profile rape cases. #JusticeforUwa has trended on social media in the last week after Vera Uwaila Omosuwa, a 22-year-old student, died two days after she was raped in a church in the southern city of Benin. More than 200 protesters marched around police headquarters in Abuja, chanting and holding placards that read “Justice for all Nigerian girls and women”, and “No means no”. Dorothy Njemanze, one of the protest organisers, told Reuters: “Children are dying, women are dying, enough is enough.” Njemanze said she and other campaigners were “watching every step of everything they (politicians) say and do on sexual-based violence”. Nigeria’s most senior policeman has ordered the immediate deployment of additional investigators to specialist gender violence desks, a Police Force statement said, a few days before Friday’s protest march. “This is to strengthen and enhance the capacity of the units to respond to increasing challenges of sexual assaults and domestic/gender-based violence linked with the outbreak of the COVID-19 pandemic and other social ills within the country,” it said. The march was one of a number of activities planned by campaigners to raise awareness of sexual violence and urge politicians to set aside more money to tackle the issue and ensure police independence.
- President Muhammadu Buhari gave his backing to the head of the African Development Bank (AfDB), Akinwumi Adesina, in his re-election bid despite allegations of improper conduct. Adesina, who served as Nigeria’s agriculture minister before taking the AfDB’s top job in 2015, has been accused of abuse of office by a whistleblower at the bank including favouritism in hiring. Adesina, who denied the allegations, was later cleared of wrongdoing in an internal investigation. But U.S. Treasury Secretary Steve Mnuchin signed a letter to the bank’s board on May 22 rejecting the internal investigation. The United States, AfDB’s second-largest shareholder after Nigeria, demanded a new independent investigation, saying it has reservations about the integrity of the bank's process. Adesina later this year plans to pursue a second term as a the head of the multilateral lender, which is headquartered in Ivory Coast’s commercial capital Abidjan. He visited Buhari in Nigeria’s capital, Abuja, on Tuesday. “President Muhammadu Buhari says Nigeria will stand solidly behind Dr Akinwumi Adesina in his bid to get re-elected as President of the African Development Bank,” a statement from Buhari’s office said. It also quoted Adesina as saying the allegations levelled against him are baseless. “I was exonerated, and any other investigation would amount to bending the rules of the bank, to arrive at a predetermined conclusion,” Adesina said. Several former African heads of state and current presidents have signed a separate statement supporting Adesina. Later in the week, the AfDB board said it stood by the internal investigation that cleared Adesina, but it would carry out an independent review of the report in the interest of due process. The board said the review of the investigation would take no more than four weeks and not interfere with the bank’s electoral calendar. The bank’s whistle-blowing and complaints handling policy will also be reviewed at a later date to ensure it is being properly implemented, it said.
- The nation’s efforts to cut its flared gas have been delayed by at least 6 weeks due to the outbreak, the petroleum regulator said. Nigeria is trying to commercialize the gas that is currently burned at its wells as waste so that it can be exported or used for power production. It is one of the top ten gas-flaring countries in the world; it flared some 7.4 billion cubic feet in 2018, according to accounting firm PwC. The country estimates that it loses $1 billion in revenue annually due to flaring, which also adds to extreme environmental pollution in the Niger Delta region. But Sarki Auwalu, head of the Department of Petroleum Resources (DPR), said the current bidding round had been delayed due to travel restrictions aimed at stemming the spread of the virus. “What is holding (up) the programme is COVID-19. Because (the bidders) need access to the flare points…, they have to go and see (them) physically,” he said. “We had to officially extend the programme by six weeks.” Nigeria’s gas flare commercialization programme was approved in 2016, and the DPR held a round for companies wanting to bid on the opportunity to commercialize 96 flare points in February. Submissions for the bids were due in early April. Auwalu said some 200 companies had joined the process.
- And, finally, armed bandits in the northwestern state of Katsina killed at least 18 people, including a local official, and stole thousands of livestock at the start of the week, two witnesses and a police spokesman told Reuters. The eyewitnesses said as many as 500 men riding motorcycles, some brandishing assault rifles, charged into the Faskari local government area on Sunday afternoon. “At least 18 person were confirmed killed by now and many others were suspected to be killed,” local resident Isma’ila Ya’u told Reuters by telephone. The men went on to the nearby village of Sabon Garin where they killed local leader Abdulhamid Sani, 55, after attempting to kidnap him, the witnesses and a police spokesman said. Sadiq Hasaan, another witness, said the men were headed with the stolen livestock towards other villages in the Batsari local government area, and thousands of residents had fled their homes. Police spokesman Gombo Isa confirmed the attack, adding the assailants carried “sophisticated weapons”. He said security forces were “combing the forest with a view to arresting the hoodlums.” Criminal gangs carrying out robberies and kidnappings have killed hundreds in the last year in northwest Nigeria. The attacks have added to security challenges in Africa’s most populous country, which is already struggling to contain Islamist insurgencies in the northeast and communal violence over grazing rights in central states.