macroafricaintel | Nigeria – On the electoral bill and peace pact

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Finally happened on a title for a future book, if I ever write one. “Awon Alariwo”, properly translated as “The Noisemakers.” It is a perfect metaphor for the Nigerian situation. We are quick to make a show of everything but do almost little else.

The Nigerian would borrow money to buy a Range Rover than build a business. We would rather take our friends out to show off our phony success than feed the family at home. Our politicians make a big show of launching projects but rarely do we see them commissioning completed ones at about the same rate. In fact, it is almost certain that the more the fanfare around the groundbreaking of a government project, the higher the likelihood it would not be completed.

Why, I often ponder, would a Nigerian not hesitate one bit to roll up his or her sleeves when in “The Abroad” but once on our shores, they develop an ego. It is astonishing how much time a great proportion of the Nigerian youth population wastes on unproductive activities. But that is a discussion for another time.

The peace pact recently signed by presidential aspirants in the upcoming poll is largely symbolic. Politicians would still do whatever they can get away with to win; legal or otherwise. Even so, it was important that they all sign. That is why it was a little unsettling when the leading opposition party’s candidate Atiku Abubakar was absent at the formal signing ceremony of the pact on 11 November.

It was a huge missed opportunity. A picture of the two leading presidential candidates holding hands would have been very helpful optics. Whether the eventual signing by Atiku Abubakar the next day was an afterthought or not is probably irrelevant now. They have all signed. And that is that. Not that it would necessarily stop any potential violence.

Mr Abubakar did also implore President Muhammadu Buhari to sign the amended electoral bill, which he refused assent to recently. Mr Buhari attributes an ECOWAS protocol against making significant changes to electoral laws too close to a poll for why he didn’t sign the bill; amongst other reasons.

Clement Nwankwo, convener of the Civil Society Situation Room, affirmed to Channels Television, a well-regarded local TV station, on 12 December, that the presidency was asked if the amended bill (in light of previous feedback by Mr Buhari) was to its satisfaction before the National Assembly sent it back for presidential assent; for the umpteenth time. The next day, the same news media organisation asked the president’s legislative liaison Ita Enang if he was one of those who advised the president not to sign the amended electoral bill. He pleaded privilege.

What I think is that the president’s political strategists likely prefer the more ‘flexible’ old law. The leading opposition party would probably have a similar preference if it were the ruling party. Still, the president would likely sign the amended electoral bill if it would not apply to the 2019 polls. Thus, I would rather the legislators simply make that little change and send it back for his assent.

True, it would have been great to have the new law for the imminent polls. But if the incumbent has exercised his presidential powers, it would be best not to risk losing the opportunity of making future elections better all together.

Should the legislature override him? If they can, they should. But it is doubtful they would be able to muster the two-third votes in both houses needed to do so. It is probably needless. If our politicians are genuinely interested in violence-free, free and fair elections, they do not need any law to bring that about.

The same sentiment applies to vote-buying. The key stakeholders are saying all the right things about how it is wrong and should be curbed. And yet, most of the mainstream politicians, if not all, are guilty of the act via varied pretensions like “mobilisation”, “logistics”, and so on.

macroafricaintel Weekly | 10 Dec [Update]

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
10 Dec Nigeria GDP, % yy Q3 2018 0.8 [act. 1.8] 1.5
11 Dec South Africa Mining Production, % yy Oct 2018 -1.7 -1.8
11 Dec South Africa Manufacturing Production, % yy Oct 2018 -0.1 0.1
12 Dec South Africa CPI, % yy (mm) Nov 2018 5.3 (0.3) 5.1 (0.5)
12 Dec South Africa Retail Sales, % yy Oct 2018 2.8 0.7
13 Dec South Africa PPI, % yy (mm) Nov 2018 6.8 (0.4) 6.9 (1.4)
31 Dec South Africa PSCE, % yy Nov 2018 5.2 5.8
31 Dec South Africa M3. % yy Nov 2018 5.7 6.0
Seychelles CPI, % yy (mm) Nov 2018 4.1 (0.2) 3.4 (0.2)
Tanzania CPI, % yy (mm) Nov 2018 2.9 (0.2) 3.2 (-0.3)
Botswana CPI, % yy (mm) Nov 2018 3.8 (0.4) 3.6 (0.7)
Namibia CPI, % yy (mm) Nov 2018 5.3 (0.4) 5.1 (0.4)
Nigeria CPI, % yy (mm) Nov 2018 11.4 (0.9) 11.3 (0.7)
Ghana CPI, % yy (mm) Nov 2018 9.2 (0.6) 9.5 (0.7)
Ethiopia CPI, % yy (mm) Nov 2018 11.1 (0.3) 11.5 (-0.3)
Mauritius CPI, % yy (mm) Nov 2018 2.7 (0.3) 2.8 (0.4)

macroafricaintel Weekly | 10 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
10 Dec Nigeria GDP, % yy Q3 2018 0.8 1.5
Seychelles CPI, % yy (mm) Nov 2018 4.1 (0.2) 3.4 (0.2)
Tanzania CPI, % yy (mm) Nov 2018 2.9 (0.2) 3.2 (-0.3)
Botswana CPI, % yy (mm) Nov 2018 3.8 (0.4) 3.6 (0.7)
Namibia CPI, % yy (mm) Nov 2018 5.3 (0.4) 5.1 (0.4)
Nigeria CPI, % yy (mm) Nov 2018 11.4 (0.9) 11.3 (0.7)
Ghana CPI, % yy (mm) Nov 2018 9.2 (0.6) 9.5 (0.7)
South Africa CPI, % yy (mm) Nov 2018 5.3 (0.3) 5.1 (0.5)
Ethiopia CPI, % yy (mm) Nov 2018 11.1 (0.3) 11.5 (-0.3)
Mauritius CPI, % yy (mm) Nov 2018 2.7 (0.3) 2.8 (0.4)

Reporter’s notebook – In support of the northeast

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

In mid-November, I covered the launch of the “Nigeria Humanitarian Fund – Private Sector Initiative” (NHF PSI) in Lagos for London-based African Business magazine. Edward Kallon, the United Nations (UN) resident/humanitarian coordinator in Nigeria, calls it a “global first” and says it “provides a blueprint for private sector engagement in humanitarian action through a country-based pooled fund set up and managed by the United Nations.” The NHF PSI is primarily aimed at funding the relief efforts in northeast Nigeria, where over 7 million people are in need of humanitarian assistance. Having already secured more than $70 million in contributions from 17 countries, the launch in Lagos was to get private sector actors to contribute their quota.

In attendance were representatives of numerous non-governmental organisations (NGOs) operating in the region, chief executives of banks and oil firms, ambassadors, politicians, and so on. I struck conversations with at least three of the NGO-types in the room. A major point that kept coming up was corruption. There have been quite a lot of money from donors towards helping the victims of the violence in the northeast. Not nearly enough, of course. Sadly, an ample portion of the little that there is never gets to the actual people in need.

The lower house of the federal legislature recently raised concerns about the seeming pilferage of humanitarian assistance for the northeast. Their focus was on government expenditure via the emergency agency, however. And while the motive of their investigations was likely also political, there is genuine concern. Those who have visited the internally-displaced persons (IDPs) in their camps express shock at their plight. They wonder how after so much resources were supposedly put towards assisting IDPs, they could still be in such deplorable circumstances.

There has not been similar controversy around the humanitarian efforts of NGOs, private-sector actors and multilateral organisations. What they have in transparency and efficiency, they lack in scale, however. In other words, while the NHF PSI is likely to avoid some of the problems found to be associated with the government’s efforts, it would require much more heft to have a huge impact.

Thankfully, there were generous pledges by the many deep pockets at the launch of the NHF PSI. I am also aware that the Lagos Business School Alumni Association (LBSAA), the governing council of which I am a member, plans to help out in the northeast as well. As do many other similarly-minded bodies in the country.

Still, you do not have to be wealthy to help out. Every raised voice in advocacy for more relief efforts in the region matters. And the ubiquity of social media means almost everyone can add their voice to the cause relatively cheaply.

Voices must also be raised about the welfare of our men and women in uniform. If they are not able to secure the region, there can be no meaningful humanitarian assistance to the displaced. The recent killing of soldiers by terrorists in the region should be a wake-up call to the government not to become complacent. Our soldiers should be well-equipped and kitted to perform their patriotic duty. Their salaries and welfare packages must be paid in full and on time.

Another set of people I had a chat with at the launch were some young medics. It was not long before they started bemoaning the state of the country. I was a little bemused. After all, they were employed. Naturally, they want more. And they were convinced their chances would be better abroad. England, America and Canada were top choices. Having travelled a bit myself, I tried to convince them that things are not as rosy over there as they think. Silence would have been golden.

macroafricaintel Weekly | 3 Dec

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Click here for PDF version

Date Data / Event Period Forecast Previous
4 Dec South Africa GDP, % qq saa Q3 2018 0.4 -0.7
4 Dec Botswana Policy Rate, % 5.0 5.0
5 Dec Namibia Policy Rate, % 6.75 6.75
6 Dec South Africa Current Account Balance, % GDP Q3 2018 -3.4 -3.3
Seychelles CPI, % yy (mm) Nov 2018 4.1 (0.2) 3.4 (0.2)
Tanzania CPI, % yy (mm) Nov 2018 2.9 (0.2) 3.2 (-0.3)
Botswana CPI, % yy (mm) Nov 2018 3.8 (0.4) 3.6 (0.7)
Namibia CPI, % yy (mm) Nov 2018 5.3 (0.4) 5.1 (0.4)
Nigeria CPI, % yy (mm) Nov 2018 11.4 (0.9) 11.3 (0.7)
Ghana CPI, % yy (mm) Nov 2018 9.2 (0.6) 9.5 (0.7)
South Africa CPI, % yy (mm) Nov 2018 5.3 (0.3) 5.1 (0.5)
Ethiopia CPI, % yy (mm) Nov 2018 11.1 (0.3) 11.5 (-0.3)
Mauritius CPI, % yy (mm) Nov 2018 2.7 (0.3) 2.8 (0.4)

macroafricaintel | Making the case for #SouthAfrica and #Nigeria

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

There are some concerns about emerging markets at the moment; for no fault of theirs in some respect, as central banks in advanced economies normalise hitherto extraordinary monetary policy measures. Peculiarly structural issues in some EM countries like South Africa, which though being tackled, continue to cast a shadow as well. In general, debt and inflation are ascendant. Thankfully, the two key EM countries on the African continent, South Africa and Nigeria, are doggedly on a monetary tightening path to curb accelerating prices. That is, even as these economies are in dire need of growth to moderate retractable problems like high unemployment. Similar restraint has not been exercised towards indebtedness, however. Even so, veteran EM investors know to look below the surface. There are myriad opportunies for the discerning.

Still, rising political risk ahead of polls in 2019, necessitate some caution; albeit more so in the case of Nigeria than in South Africa. Cyril Ramaphosa, the technocratic president of South Africa provides some comfort. Evidence of this can be seen in the relative success of his investment drive. And he is almost certainly going to remain in office for at least another five years. However, most agree a competent and well-meaning head of state atop a system with many palpable governance weaknesses may still flounder nonetheless. Revelations at the ongoing judicial inquiry into so-called “state capture” during the presidency of Jacob Zuma show how deep the structural fissures are, for instance. And the enormity of the task to repair them. Curiously, Mr Ramaphosa has chosen to play it safe. A recently underwhelming cabinet reshuffle by the South African president, some argue, was a missed opportunity to sanitize the cabinet of old party cadres. Especially as it is increasingly obvious most of them got their hands soiled in one form or another during the administration of Mr Zuma. The other argument is that the president is playing for time. A likely stronger mandate in 2019 would enable him make revolutionary changes then, his supporters argue.

In the Nigerian case, there is a predominant feeling that President Muhammadu Buhari could have done more to attract investment and make doing business easier. The administration refutes such assertions by pointing to the country’s improved ease of doing business ranking by the World Bank. There is more that could have been done regardless. And without a doubt, the disaffection between the executive and legislative arms of government, even as they are both governed by the same political party, weighed greatly on the economy. The appointment and clearance of government officials took ages, budgets were approved far too late; to name a few. And with elections on the horizon, much is now in abeyance till afterwards. But would much change then? Atiku Abubakar, the leading opposition contender for the presidency, argues they would. It helps that he is perceived to be more business-friendly. Ironically, Mr Abubakar is also seen as representative of the mostly corrupt elite. How much food has been put in the mouths of Nigerians by Mr Buhari’s anti-corruption stance is a common rebuttal by Mr Abubakar’s supporters. They also argue corruption has been rife under Mr Buhari. So, it probably would not matter much who wins. What is more important is that the polls be free, fair and peaceful.

Nonetheless, there is reason to be optimistic. If, as is often argued, poor governance and corruption are the major constraints on Africa’s development, increased accountability and citizens’ engagement, owing to social media especially, suggests better African leaders would increasingly emerge. A case in point is the Nigerian case, where a couple of seasoned technocrats have joined the presidential race this time around. Although, they have not attracted as much media coverage as the two leading candidates, their participation has greatly enriched the process. It is so gratifying now to see Nigerian politicians arguing over policies. True, politics remains extremely monetized. But even beneficiaries of such largesse increasingly engage the political leadership.

macroafricaintel | Renewable power in Nigeria: Progress report

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Renewable power sources are ascendant. China is leading the way, with a quarter of global solar capacity and a third of wind power output. Until recently, the cost of solar panels fell as economies of scale made each unit cheaper for the dominant Chinese manufacturers. But the unfolding trade war with America, which resulted in tariffs being imposed on Chinese-made solar panels, has added to costs. That is not stopping the rise of renewables. “In 2016, cumulative solar PV capacity reached almost 300 GW and generated over 310 TWh, 26% higher than in 2015 and representing just over 1% of global power output”, says the International Energy Agency (IEA). In 2016, “cumulative grid-connected wind capacity reached 466 GW (451 GW onshore wind and 15 GW offshore wind) and wind power accounted for almost 4% of global electricity generation.”

Given the prevailing trends, what are the prospects for renewable power in Nigeria, one of Africa’s most voracious energy consumers? “The prospect for renewable energy in Nigeria is quite enormous and there are opportunities for the development of grid-connected solar, wind, and geothermal power projects,” says Kayode Omosebi, energy analyst and head of research at ARM Investment Managers, a leading Nigerian investment banking firm. “Nigeria is endowed with abundant energy resources, both conventional and renewable, which provide her with immense capacity to develop an effective national energy plan,” Mr Omosebi adds.

More solar
In line with the government’s desire to have 25 percent of Nigeria’s power mix be via renewables by 2019 and about 40 percent by 2030, more than $20 billion of solar power projects are either planned or under construction. There is the $479 million 300MW Shiroro Solar Power project on the grounds of the Shiroro hydroelectric dam in northcentral Nigeria, and the $5 billion 3,000MW utility-scale solar photovoltaic (PV) projects by SkyPower and FAS Energy in Delta State in the Niger Delta region. In collaboration with Arrow Capital, an American firm, the University of Ilorin, located in the country’s middle-belt, is also constructing a 500MW solar power plant at a cost of $2.3 billion. Another is the $1 billion 1,000MW FirstGate solar power farm in Kogi State in northcentral Nigeria. There are numerous other projects on a smaller scale.

“Solar is a major renewable energy resource in Nigeria from a geographical perspective, and consensus projects that Nigeria has the potential to generate 600,000MW by deploying Solar PV panels from just 1% of Nigeria’s land mass,” says ARM’s Omosebi. “The high level of solar radiation in the northern part of Nigeria makes it easy to utilize solar power generation in the northern part of the country to steadily increase the power generation capacity in Nigeria.”

Regulation
The regulatory environment for renewable energy in Nigeria is favourable. And judging from the number of ongoing solar power projects, investors think so too. ARM’s Omosebi explains the specifics: “In terms of policies, [the] Nigerian Electricity Regulatory Commission (NERC) has recently issued a Regulation on Feed in Tariff for Renewable Energy Sourced Electricity in Nigeria (REFIT Regulations) passed in December 2015, which provides for the tariff framework for renewables…The REFIT Regulations indicate that the government has set an on-grid target for solar renewable generation of 380MW by 2018. This means that there is a deliberate drive by the government to ramp up electricity generation from solar sources.”

Hydro still main renewable focus
But for sometimes unpredictable and meagre rains, hydropower has proved reliable. Large dam projects can sometimes be unwieldy and take too long to complete, however. One such project is the longsuffering 3,050MW Mambilla hydropower project in northeastern Nigeria; besieged by corruption hitherto. Now underway with a Chinese contractor, the $5.792 billion project is expected to be ready by 2023, if all goes according to plan. Other ongoing hydropower projects include 40MW in Kashibila, 30MW in Gurara, 700MW in Zungeru, and 29MW in Dadin Kowa. Wind power has not enjoyed as much enthusiasm, however. That relative to solar power, wind power systems require greater maintenance and are not so practical for residential use, are some reasons why. In this regard, there is only one major project: the 10MW Katsina Wind Farm in Rimi Village in northwestern Nigeria.

Make cheaper
Still, “renewable, except hydro, today can’t replace other sources of energy due to [the] intermittent [nature] and the high cost of storage. Storage will become cheaper but it’s not clear when wind and solar will serve as real alternatives both in terms of the amount of power available and the cost. It is also not clear that it will be able to properly serve dense urban areas without some form of grid, since the roof space per person is small you will need the solar panels or wind farms to be away from the households that they are serving,” says an experienced investor in the power sector. Yet judging from the trends thus far, solar power is likely to increasingly gain traction. Off-grid solar power would be a challenge in urban areas, however. But as it is ideal for rural and agricultural communities, it would free up the grid to serve more power-hungry urban areas via other power sources; which although not environment-friendly, would not be as harmful as less power would be needed from them. With government regulation in place, what would really drive renewable power sources like solar in Nigeria and elsewhere is if it becomes cheaper than other sources.

An edited version was published by African Business magazine in October 2018

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. https://www.businessdayonline.com/columnist/rafiq-raji/article/renewable-power-nigeria-progress-report/