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Vol 57 No 11

Published 27th May 2016


Nigeria

Anniversary ambushed

Victories against Boko Haram and crooked politicians are overshadowed by a faltering economy and new militants in the Delta

It would be hard to concoct a worse conjunction of calamities than that facing President Muhammadu Buhari as he prepares to mark his first year as President on 29 May. Undaunted, he will use the opportunity to extol the government's success in driving Boko Haram Islamist fighters from the north-east and to celebrate some successes in his anti-corruption campaign. He will also detail how much the government has retrieved from Western banks of the billions of dollars stolen under General Sani Abacha's regime and its successors, and how those recovered funds will be spent for the public good.

Some of this year's rising tide of economic woes, such as crashing oil and gas prices, China's slowdown and rising international rates, are not the government's fault. They have nevertheless eclipsed much of the enthusiasm for Buhari and the All Progressives Congress since they won power a year ago (AC Vol 57 No 9, Railroading senators & Vol 56 No 23, Buhari resets the clock). 

Chart Copyright © Africa Confidential 2016

Economic growth is at its slowest for 25 years and oil production has fallen, mainly because of a succession of sabotage attacks, to its lowest levels for at least two decades (AC Vol 57 No 10, Avengers assemble). Inflation is edging upwards but wages are stagnant. Public sector workers are owed several months' arrears in some cases.

Such hardships have blunted the impact of investigations into the past decade's staggering state and business corruption. Despite a stream of revelations of grand corruption, the judicial process is painfully slow. Adjournments and appeals are holding back cases against some top former officials. Few of the ill-gotten gains have been returned to the public purse. A core of officials in the government have pledged to fight those vested interests and, in the words of one, to 'ensure that the 99% doesn't suffer for a decade of untrammelled looting by the 1%'.

The fightback by vested interests includes weakening the economy, creating shortages and bribing the judiciary. None of that is unusual but the government will have to make its case far more compellingly to persuade Nigerians that it can face down these interests and fulfil the ambitious promises of a year ago.

Those go beyond defeating Boko Haram's terrorism and fighting corruption to launching a wholesale restructuring of the economy, away from oil dependency to a mix of farming and agricultural processing, manufacturing, high technology and services. Such plans remain feasible, despite the reverses of the past year.

Economic fillip
Boosting local food production is giving the economy a fillip as new projects start up: growing enough rice and sugar to meet local demand would save over US$5 billion a year. Plans for new power stations and transmission lines should bring in another $10 bn. over the next couple of years.

However, the biggest advance would be oil and gas industry reform, restructuring the state oil company and fixing the local refineries, whose dysfunction lies at the heart of the current fuel crisis. Deputy Oil Minister Emmanuel Ibe Kachikwu has already steered the much-delayed bill to restructure the Nigerian National Petroleum Corporation through the Senate (AC Vol 56 No 20, At last a cabinet, and now for the policies). It sets out clearer rules for investors and the NNPC would be quoted on the Nigerian Stock Exchange and compelled to issue timely financial statements.

Yet as long as the government remains in economic firefighting mode, investors from Nigeria and beyond will be reluctant to put money into the longer-term projects at the heart of the restructuring plans.

Politically, one thing is in the Buhari government's favour: the disarray in the People's Democratic Party, which held power continuously from the return to civilian rule in 1999 to the middle of last year. This month, a party convention broke into rival factions and failed to elect a new leadership. Many of the PDP's senior figures seem restrained from speaking out because they face anti-corruption investigations or prosecutions. Of those untroubled by the courts, state governors such as Peter Ayodele 'Ayo' Fayose in Ekiti or Ezenwo Nyesom Wike in Rivers are combative local populists but with little national appeal.

Subsidising millionaires
Division and weakness in the PDP partly explain the failure of the trades unions' planned national strike against Oil Minister Kachikwu's announcement of a 67% increase in fuel prices at the beginning of this month. Effectively, he had announced the end of the fuel subsidy. That was a policy designed ostensibly to help the poorest people but which in reality became a state-financed welfare scheme for fuel importers, most of them multi-millionaires.

Yet fuel prices, especially the right of every Nigerian to cheap gasoline, diesel and kerosene, has deep political resonance. In opposition, the APC teamed up with unions and civil society activists to organise massive protests and strikes against the PDP government's attempt to end the subsidy scheme that five years ago cost over $10 bn. a year. This time, the strikes petered out after a week and few activists bothered to take to the streets. Most senior PDP politicians were jockeying for position rather than leading protests against the removal of the subsidy.

This opposition collapse could prove only temporary good fortune for the APC. The PDP includes some very savvy and wealthy politicians. They may calculate that they just have to sit back and watch the government struggle with deepening economic and security problems. Such veteran politicians are masters at capitalising on the misfortunes and failures of would-be reformers.

Just as conditions started to improve in the north-east (Boko Haram has become more of a threat to neighbours, especially Cameroon and Niger) clashes in the Middle Belt between settled farmers and Fulani pastoralists have flared up, exacerbating other communal and ethno-religious tensions in the region.

For now, though, it is the new generation of militants in the Niger Delta that is changing everyone's political calculations. For the security services, it is more than a coincidence that this wave of militant protest has been sweeping the South-South and the south-east, now PDP heartlands.

Regardless of how closely the militants might coordinate with PDP partisans, armed operations against oil and gas installations in the Delta will have a far faster and more direct impact on the political economy than the Islamists' operations in the north-east. That much has become clear since the shadowy Niger Delta Avengers launched operations in March (AC Vol 57 No 10, Avengers assemble). Their first target was Royal Dutch Shell's underwater flow line near Forcados. That locked in 250,000 barrels, about 15% of crude oil output. Since then, Kachikwu reckons as much as 800,000 barrels per day (bpd) could have been taken out of production.

In very deep waters and using scuba divers, the Forcados attackers showed audacity and technical skill which put the Avengers above other Delta militants. It also seemed to rule out the involvement of High Chief Government Ekpemupolo aka Tompolo as he was on the run and locked in to his own stand-off with the military Joint Task Force (JTF) around Chevron's Escravos base.

Ambitiously, the Avengers are taking on both the military and the oldguard of Delta militant leaders. Tompolo's firepower is focussed on keeping the JTF at bay. The Avengers are equally ambitious in their political demands: international oil companies should leave the Delta immediately; the government's amnesty programme for ex-militants should be expanded; more economic and political devolution, if not outright independence for the Niger Delta and Igboland; a thoroughgoing reform in allocating production and exploration licences.

In pursuit of such ends, the Avengers say they will shut down the entire oil and gas industry. That may be bluster for now but their current attacks have hammered oil exports and shut down several gas-fuelled power stations. At the height of the last Delta conflict in 2008, militants managed to knock out 1.9 million bpd of the country's 2.6 mn. bpd production.

Expulsions
This month, a blast at Chevron's offshore Okan gas valve platform shut in 35,000 bpd. At the same time, the Avengers issued a four-day ultimatum for Tompolo to apologise for denouncing them; reinforcing the competition among militants gangs in the Delta. That was followed by explosions on the oil pipeline linking the Warri and Kaduna refineries, and gas pipelines supplying Lagos and Abuja's power stations. Then the Avengers threatened to take their grievances to Tompolo's home turf in the western Delta, at Oporoza, Gbaramatu Kingdom.

The Avengers' Spokesman, Colonel Mudoch Agbinibo, demanded an apology from Tompolo for criticising their activities. When that wasn't forthcoming, they launched a new round of attacks on oil and gas pipelines, blowing up a well in Abiteye, as well as pipelines to the Abiteye, Alero, Dibi, Otunana and Makaraba flow stations.

Tompolo's Media Advisor, Paul Bebenimibo, said his boss would never apologise to the Avengers for any imagined slight. If not for his present issues with the Federal Government, he (Tompolo) would have gone after them and exposed them.'

That complicates questions about the Avengers' allies or sponsors. Several other militant groups have pledged loyalty to the Buhari government, including Eris Paul aka General Ogunboss and his partner Africanus Ukparasia Tuwonwei aka General Africa, along with political ally Timipre Sylva, a former PDP Governor of Bayelsa who then defected to the APC (AC Vol 56 No 25, Taking down Tompolo).

General Africa has thrown his weight behind President Buhari's government. Another veteran militant, Mujahid Dokubo-Asari, has often been prepared to take on both his own militant counterparts and the government simultaneously but no one has been able to link him to the current round of attacks.

Activists in the Delta now talk of a generational split between leaders such as Tompolo and Africa, who benefited from amnesty programmes and security contracts in the past, and who are publicly arguing that Buhari should be given a chance. That opens the possibility of a three-sided conflict: among the militant groups themselves and with the army's JTF.

Avengers threaten
Agbinibo has talked up the Avengers' fight with Tompolo, with the military and the government: 'If the International oil companies and federal government of Nigeria thinks the Niger Delta Avengers are criminal as they claim and fail to meet our demands, the Niger Delta Avengers are going to activate its elite unit, code name Strike Team 1. The International Oil Companies will be our first target, all oil facilities including their offshore platforms eg Bonga FPSO [floating production and storage (vessel)], EA [deepwater] field and their tank farms such as Bonny tank farm, Escravos tank farm and Forcados tank farm.'

The question of who is behind the Avengers and their durability is concentrating minds. Picking a fight with Tompolo and the army at the same time looks audacious, requiring serious finance, access to arms and well-trained fighters. If Ogunboss, Africa and Sylva are not directing the group, only a few gang leaders have the technical know-how and chutzpah for such a role.

Some of the wildest theories are in play: the most intriguing is that the Avengers are a mercenary army, financed by wealthy and discredited politicians from President Goodluck Jonathan's ousted government. Accordingly, the group's main aim is to disrupt production and drive up the price of oil from which its sponsors stand to make tens of millions on the futures market.

A more mundane explanation is that the Avengers are simply laying down a marker for the government: that the South-South and the south-east will not succumb to military force but are willing to negotiate. Given Buhari's track record as a military leader, that might seem a risky bet. However, there are signs that the retired general has stepped back, for now, from his declaration in April that the Avengers and other Delta militant groups would meet the same level of military force as Boko Haram in the north did.

Some leading activists in the Delta as well as oil company bosses have been called in to meet officials in Abuja and there is talk of restructuring the amnesty programme and issuing more but smaller pipeline security contracts. Although Buhari has beefed up the military considerably over the past year, oil industry experts say it would be impossible for soldiers to guard the pipeline network which snakes across the Delta. Instead, the government is being advised to open discussions with community and militant leaders to try to negotiate a new security arrangement in the Delta. The stakes – the security of the country's oil and gas industry – are high and any sort of regional deal would be a bitter pill for Abuja to swallow. As a temporary fix, at least, it might offer the fastest way to restore some security to the Delta and some dynamism to the national economy.



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