Monday, March 8, 2021

Nigeria’s empty purse, internal security and Fleagle’s double whammy, by Richard Ali


tiamin rice

The Bussa Rapids used to lie in the River Niger west of Kontagora, just south of the point where the Sokoto River meets our national river. The rapids exacted a toll from travellers for centuries, most famously the life of Scottish explorer, Mungo Park, in 1806. If you must cross, you must navigate past the rocks at the right time. Homer relates a similar story in Odyssey where the ship captain must either sail by a rocky monster in the Straits of Messina and be wrecked or sail too close to the whirlpool, Charybdis, and drown. The Americans, with their peculiar folk heroes, have a useful one in Evil Eye Fleagle, a New York boxer whose glare could stop a bull in its tracks. No one, no animal, could survive two. Hence the notion of a “double whammy”. It is like our own “double wahala” and a whole lot worse. All stories are one story and in the nexus of these three, we find the 2020 reality of the Nigerian elite at the helm of our ship of state. I have argued in the last weeks that state stability is the real challenge facing Nigeria’s internal security, that Boko Haram, the coronavirus, any others, are merely symptoms of system malfunctions.

90% of Nigeria’s forex earnings comes from crude oil sales. News has come in that May’s US crude oil futures contracts (derivatives meant to hedge against price fluctuations) were trading in the negative. Of particular interest, Nigeria’s Bonny Light trades at $25 per barrel, with a cost of production of $22 per barrel. This follows demand for our crude having fallen in the wake of Chinese manufacturing shutdowns as a result of the coronavirus. Parallel to this, the OPEC+ piss-fest between Saudi Arabia and Russia saw KSA flood the oil market with unprecedented barrels from its massive proven reserves until an agreement was reached to take 10 million barrels off the market early this month. Industry watchers, even then, said that twice this volume would be needed to restore sanity in oil prices.

In consequence, Minister of Finance Zainab Ahmed announced early March that she was looking to cut $4.9 bn from the Federal Government’s 2020 budget, having reviewed the benchmark from the earlier $53 to $30 per barrel. With our crude selling $5 less than the new benchmark, Minister Ahmed is probably having palpitations now. The real slaughter will be seen in our 36 federating units, the state governments. The February FAAC meeting was acrimonious with states being vehement that the allocations fell short of their expectations. This is understandable when read side by side with an NEITI report, also in February, that 21 of Nigeria’s 36 states cannot meet their recurrent expenditure needs on the basis of the Federal government’s FAAC feeding bottle. What’s more, even with the addition of internally generated revenue figures, most states would still be unable to finance their budgets. President Buhari was forced to withdraw $150m from the Nigerian Sovereign Investment Agency to augment the fall in monthly federation account disbursements.

Herein lies the worry from an internal security perspective. The Nigerian people live in the states and the FCT Abuja, and while its always the reflexive position that all that goes wrong in the country is the fault of “Obasanjo”, “Goodluck” or whoever is president, the reality is that the economic wellbeing of Nigerians is the primary task of state governments. It is a task that the governors are now glaringly unable to perform with the current fiscal certainties. Our states, where our people live, are in trouble.

Here’s the brutal reality: When president Buhari announced an N10bn intervention fund to help with the coronavirus response and an N5bn intervention for the Nigerian Centre for Disease Control (NCDC), he was scraping at the bottom of the Federal barrel. Note that N30bn was allocated in the 2020 budget for the Social Investment Programme’s four streams (CCT, N-Power, GEEP and the school feeding programme) but this was before Minister Ahmed’s budget slash and the rash of almost nationwide lockdowns that has essentially crippled the informal and grey economies that actually employs the greatest number of Nigerians. Civil and public servants, along with contractors of all stripes, are only a significant demographic because of the anomalous patronage systems they animate. Most Nigerians try to have as little to do with the government as possible and are well out of these patronage systems, survive off-grid. Such as taxi drivers like my uncle, community corner shop all-items sellers like my mother, and a hundred thousand other humble occupations wherein they are generally left alone by the state. These people, numbering in hundreds of millions, cannot, in the interim, carry on with their lives and they are getting increasingly frustrated as they grow hungrier. Where the Nigerian elite sees oil prices, coronavirus and lockdowns, see social investments and palliatives, what I hear is a not-so-distant thunder. Of the rippling rocks that were the Bussa Rapids and Scylla, of the swirling death pool of Charybdis and the whoof of Fleagle’s hammer bringing on the whammies.

In his 1948 BBC Reith Lecture, the English philosopher, Bertrand Russel, proposed a game which I call the Russel Razor. He said: “If one man offers you democracy and another offers you a bag of grain, at what stage of starvation do you prefer the grain to the vote?” I have found its implications very disturbing when thinking in terms of law and order in societies. The Nigerian question is: “If people are generally left alone to fend for themselves regardless of state structures, at what point in state structures enforcing against this bare survival do people resort to civil disobedience, chaos and anarchy?” The Nigerian people seem to have pretended not to know the quality of governance they receive is poor so long as state structures generally let them be. In the response to the coronavirus and its necessary lockdowns, this tacit ignore-ance is being disrupted. What will they do, is the question? The slump in crude oil prices will not start to correct itself in at least the next three months. The fiscal bankruptcy of most state governments is inevitable. Social catastrophe a clear and present danger.

Now, putting it all together. Government of Nigeria has not saved for the rainy day. The Excess Crude Account (ECA) is meant to be a savings account for foreign exchange earned above budgeted benchmark prices for crude oil sales. The government’s own figures state that at the time President Obasanjo left office in 2007, these ECA funds stood at $9.7bn. As at March, 2020, the amount of money in the ECA was $71.8m. The ECA, which helped shore the country during the 2008—2009 global financial crisis is not available for the Federal government to draw on in 2020. As stated, even the Nigerian Sovereign Wealth Investment Agency’s funds have been raided to make up for monthly FAAC allocations to states. As it is, the federal government cannot “bailout” any states at the moment and FAAC allocations available to be shared between the three tiers of government is roughly $2 on an estimated 2,000,000 bpd output which no one is buying. This is what makes the statements of Governor Nyesom Wike on the N10bn corona intervention funds, how River State, as an “economic hub” (at that time with zero Covid19 infections) ought to “benefit” from these funds. Nyesom Wike does not get it and worse, a majority of his brother governors don’t get it either.

Ours is a ship with 200 million people aboard. Like any ship, a state, whether it is dysfunctional as ours is, or efficient, cannot be turned on a dime. A ship displacing a mere 80,000 tons needs at least 500 metres to execute a turn; how many months does a ship of state a million square kilometres wide, full of jaded internal mechanisms ranging from an elite who do not even know how to protect their own interests to a patronage system for the second tiers and a huge third tier left to their own devices need to reform its systems? Today’s essay is not one for offering solutions. It is to say in these times all there is to do is sail on to disaster. Does it matter whether it is Scylla, Charybdis, the rocks at Bussa now hidden within the Kianji Lake or Mr. Fleagle’s hammer that gets us? The time we could have avoided this is long past. All there is to do is to maintain a stiff upper lip and stand for as long as we can. That is all.                                      

Richard Ali was called to the Nigerian Bar in 2010 and has worked in private legal practice, consulted in a policy shaping role at the Ministry of Interior (2015 to 2017) and has run a preventing and countering violent extremism (PCVE) programme. His expertise is in soft approaches to PCVE. He is an alumnus of the US National Defence University’s Africa Centre for Strategic Studies (ACSS) and of the State Department’s International Visitor’s Leadership Programme (IVLP). He is also a novelist and a poet. He can be reached at [email protected]


Subscribe to Our VIP Newsletter

Related News


Please enter your comment!
Please enter your name here

Latest News