A Week in Nigeria: 20 June

Highlights from Reuters coverage of Nigeria over the last seven days

The central bank took money from banks this week while the finance minister said plans were afoot to unify the country’s multiple exchange rates

In this week’s round-up: doctors begin strike, Buhari rebukes security chiefs, finance minister seeks exchange rate unification, and the central bank collects around $600m from banks in naira stability drive.

• Resident doctors in Nigerian public hospitals began an indefinite strike to demand better benefits as they battle the coronavirus pandemic.Those treating COVID-19 patients will stay on the job but their union, the National Association of Resident Doctors (NARD), gave the government two weeks to meet the demands or else they would also walk out. Resident doctors are those who have graduated from medical school and are training as specialist consultants. They are pivotal to frontline healthcare in Nigeria as they dominate the emergency wards in its hospitals. Strikes are common in Nigeria’s public health system, with clinicians frequently seeking pay rises and improvements to under-funded infrastructure to meet the rising burden of healthcare in the West African country of 200 million people. “If the government fails to meet our minimum demands within two weeks, the resident doctors working in (COVID-19) isolation centres will automatically join the strike,” Aliyu Sokomba, the head of the union, said in a statement. The resident doctors are seeking a COVID-19 pay supplement in addition to life insurance for doctors and more funds in the federal budget for their training, among other demands. The union has complained about inadequate protective equipment to treat COVID-19 patients and has said that 10 doctors have died so far from the highly infectious respiratory disease. Health Minister Osagie Ehanire told reporters government officials were holding talks with the union.
• President Muhammadu Buhari criticised his heads of security for their handling of attacks across the north of the country and said more needs to be done to resolve the problem, the national security adviser said. The comments attributed to Muhammadu Buhari are some of his sharpest criticisms of his security chiefs as the conflict in the north has steadily worsened through most of his five years as president. Security forces in Nigeria, which plays a key role in maintaining stability in the region, have in recent months contended with deadly attacks by gunmen in the northwest and a spike in Islamist militants’ strikes in the northeast. “Mr. President has expressed great concern over the declining security situation in the country,” the national security adviser, Babagana Monguno, told reporters after Buhari’s meeting with the security chiefs. “He is extremely unhappy about what is happening,” said Monguno, adding: “He feels that, even though the security agencies are doing their best, their best is not good enough for him and wants an immediate reversal of the current trend.” Jihadist group Boko Haram had been pushed off most of the land it controlled early in 2015, months before Buhari took office. But the group continued to mount attacks in the northeast, as well as neighbouring Cameroon, Chad and Niger. A splinter faction that pledged allegiance to Islamic State in 2016 has become the dominant force in the region. Buhari’s comments came days after suspected Islamist militants killed at least 60 people in the northeast’s Borno state and 69 others were killed in a separate strike in the region. Residents in northwestern states have been attacked by gunmen who loot towns over the last two years. In May, the United Nations said the violence forced 23,000 people to flee to neighbouring Niger within a few weeks.
• Nigeria’s central bank collected 216 billion naira ($598 mln) from banks with excess cash holdings as part of measures to support the naira currency, banking sources said on Friday. The naira has come under intense pressure in recent months during the coronavirus pandemic, a sharp fall in the price of oil — Nigeria’s main export — and departing foreign investors, causing a large financing gap. The currency has been hitting new lows on the over-the-counter spot and black markets since March after the central bank adjusted its official rate, implying a 15% devaluation, to absorb the impact of an oil price crash. Banking sources told Reuters the liquidity withdrawal came before a foreign currency auction on Friday. “The central bank is trying to manage the FX rate using the CRR (cash reserve ratio),” one banker said, adding that the debits had become frequent and over the 27.5% limit. He said offshore lenders were the most affected on the levies since they don’t operate retail business and are debited from their corporate deposits or borrowings. The bank is selling forex to importers and individuals with dollar expenses to keep its economy afloat. But it is yet to resume forex sales to investors that have sold assets and need to leave the country. The central bank did not respond to a request for comment. The naira traded at 385 on the official market this week, weaker than a quoted rate of 361, backed by the central bank.
• Nigeria will seek to unify its multiple exchange rate regime to generate more local currency from its dollar inflows and manage the rate in a sustainable manner, Finance Minister Zainab Ahmed said in a finance ministry document seen Reuters. Ahmed said the government would direct oil firms to sell dollars to the central bank as opposed to the state-owned corporation NNPC, adding that the government would deregulate petroleum prices as part of measures to safeguard oil revenues. The policy will be implemented over a 12 month period, the document said. Nigeria has for a number of years operated a multiple exchange rate regime which the central bank has used to manage pressure on the naira. But dollar shortages have plagued the economy after a coronavirus-induced oil price crash slashed government revenues and weakened its currency. Nigeria would also direct oil firms to sell dollars to the central bank as opposed to the state-owned petroleum corporation NNPC, Ahmed said, adding that the government would deregulate petroleum prices as part of measures to safeguard oil revenues. The policies will be implemented over a 12 month period, the document said.
• We reported on the impact of the coronavirus pandemic on Nigeria’s workforce. Our story focused on the experiences of a 29-year-old woman who was out of work for the first time in her adult life after being laid off by a transport firm in March. Last week a government report on the impact of the outbreak said some 39.4 million people — about a third of Nigeria’s workforce — may be unemployed by the end of this year. The government expects Africa’s biggest economy to contract by 3.4% this year as a result of the pandemic. Nigeria has reported around 17,000 confirmed COVID-19 cases and more than 400 deaths. Hilda Kragha, CEO of Nigerian online jobs portal Jobberman, said the number of clients searching for work had more than doubled. “Typically, we have about 20,000 active job seekers week-on-week. The past few months it’s been up to 50,000,” she said. Kragha said companies in hospitality, entertainment and advertising were worst hit.
• While the job market is increasingly bleak, the cost of living continues to rise rapidly. Annual inflation rose for the ninth straight month in May to its highest level in more than two years, lifted by higher food and drug prices, the statistics office said. The new coronavirus pandemic has disrupted logistics and economic activities, said the stats office. Inflation, a measure of living costs, climbed to 12.4% in May, from 12.34% the previous month, the National Bureau of Statistics said. The statistics office said month-on-month increases were recorded in the prices of pharmaceutical products, medical services, transport and associated services. It said food inflation, which accounts for the bulk of the inflation basket, climbed to 15.04% in May, compared with 15.03% in April. Food inflation has been in double digits for more than three years. Most of Nigeria’s coronavirus cases have been in urban areas, where the brunt of price increases has been felt, especially imported drugs and foodstuffs. Rising inflation has caused yields on Treasury bills and bonds to turn negative, a major stumbling block for the central bank’s push to attract foreign inflows to support the naira and boost the economy.
• West African government ministers proposed re-opening borders between their countries in the first half of July and allowing in travellers from other countries with low or controlled levels of coronavirus spread by the end of July. Countries across the 15-country ECOWAS trade bloc have imposed varying levels of travel restrictions in response to the COVID-19 pandemic, with many shutting their borders entirely. The new proposal, contained in an ECOWAS summary of a virtual meeting last week of foreign ministers and trade ministers, called for coordinated efforts to re-open cross-border trade that has been crippled by coronavirus restrictions. It said a first phase consisting of opening up domestic air and land transport should be implemented this month. Many governments in the region have already begun to do so. A second phase, involving the opening of land, air and maritime borders within the region, should happen by July 15 at the latest. A third phase, involving the opening of air and land borders to “countries with low and controlled levels of COVID-19 contamination rates”, should occur by July 31 but will depend on the evolution of the pandemic, the report said. The ministers’ recommendations will be presented to ECOWAS heads of state at a forthcoming summit, it said. African governments have struggled since the start of the outbreak to strike a balance between containing the virus and maintaining the day-to-day economic activities that millions of their citizens depend on to survive. African countries have registered relatively few cases compared to hotspots elsewhere in the world, but the World Health Organization warned last week that the pandemic was accelerating on the continent.
• And, finally, African countries are lobbying to set up a U.N. inquiry into “systemic racism” and “police brutality” in the United States and elsewhere, aiming to defend the rights of people of African descent, a draft resolution seen by Reuters shows. The text, circulating among diplomats in Geneva, voices alarm at “recent incidents of police brutality against peaceful demonstrators defending the rights of Africans and of people of African descent”. The Council agreed to convene at the request of Burkina Faso on behalf of African countries after the death last month of George Floyd, an African American, in police custody in Minneapolis, which ignited protests worldwide. The United States quit the Council two years ago alleging bias against its ally Israel.