The SBM Intelligence research group has released its report on 2015 which reviews key sectors and issues in Nigeria as relates to governance and the economy while also making forecasts for 2016.
The report begins with a review of essentially the most significant highlight of Nigeria’s political scene – the 2015 general elections, acknowledging that the elections were generally peaceful despite pockets of violence in a few places, particularly in such states as “Rivers, Akwa Ibom and Delta.”
Former President Goodluck Jonathan’s timely decision to concede defeat before the announcement of results is stated as a major reason for the peace enjoyed across the country. A contrast is made with the many state governorship elections that resulted in controversies, many still the subjects of ongoing litigation.
The report blames corruption for the failure of the past administration to effectively tackle terrorist group, Boko Haram, especially in the light of recent revelations in ongoing investigations into the activities of former National Security Adviser (NSA), Col Sambo Dasuki (rtd). The insurgency, which has gradually waned in recent months is expected to be further addressed by the President Muhammadu Buhari administration in 2016 but may not be completely stopped, the report says.
The SBM Intelligence report listed key areas the government may face challenges in the coming year.
Internal Security
According to the report, the expected end of the Presidential Amnesty Programme this month may signal the return to militancy in the Niger Delta as former warlords who may not take kindly to the cessation of financial handouts may take up arms against the state. Militancy in the region may adversely affect oil production and consequently affect the economy.
SBM Intelligence said 2016 “may also see the intensification of ethno-political violence in both Nigeria’s South-East and North-Central regions.” The secessionist agitations in the South-East led by Nnamdi Kanu who was for many weeks detained by the government, as well as clashes between herdsmen and farmers leading to at least 2000 deaths in the North-Central are listed as sources of concern requiring urgent attention.
The report equally cites the “gradual but significant increase in intolerance between Sunni and Shi’a groups in the North-West” as a challenge that needs a closer look. A December 12 confrontation between the Nigerian Army and the Shiite group led by Sheikh Ibraheem Zakzaky led to the death of many people, an issue that is yet to be properly investigated or resolved.
The Economy
SBM Intelligence said there will be economic pressures in Nigeria in 2016 with oil prices expected to remain low especially in the first and second quarters of the year. Hinging the eventual fate of the economy on the managerial ability of its handlers, the report also states that “there remains a clear risk of recession and debt default by some states.”
Key economic decisions which the group identified that the federal government would have to make in 2016 include decisions on devaluation, subsidy, diversification, lending rates and capital controls which are all expected to have effects on businesses. A delayed budget may also worsen the situation of the economy, it is feared.
The group faulted the decision of the Central Bank of Nigeria (CBN) to continually peg the value of the Nigerian currency – the Naira – and said further that for economic reasons, the Naira will continue to lose value whether it is pegged, devalued or left to float.
According to the report, the CBN’s policies have hurt businesses and scared away investors, adding that if the trend continues, “the Naira will trade at N300/dollar by the end of the first quarter of 2016 and close up at N300 – N350 by end of 2016 (even if oil prices appreciate).”
The States
SBM Intelligence said the majority of Nigeria’s states have failed to plan for budget financing and hardly have any sustainable revenue models outside federal allocations. The impact of the decline in crude oil prices may be felt more at the states with the citizenry most affected by the squeeze.
Legal Issues and Legislation
The report anticipates a flurry of corruption cases but advocates more effective judicial reforms, recommending that the vice president, Prof Yemi Osinbajo, SAN brings to bear his experience in this regard while he served as the attorney-general of Lagos state.
The National Assembly is seen as the most critical institution of government in 2016 which is expected to come under close scrutiny from the public just as some of its leaders will continue to face actions from law enforcement agencies. However, should the National Assembly get its acts together, the parliament is expected to make important legislations on key issues like electronic voting, social security, state policing, citizenship rights, age of marriage, amendment of the Land Use Act and the grant of the states the power to exploit solid minerals by removing it from the exclusive legislative list.
Fashola as a key to Buhari’s Success
The activities of the minister for Power, Works and Housing, Mr Babatunde Fashola, SAN are expected to determine to a large extent the success or otherwise of the Buhari administration, the report states. The implementation of Fashola’s recently disclosed plans are expected to reduce unemployment and address Nigeria’s infrastructure deficiency.
SBM Intelligence however faults Fashola’s figures on housing projections. “On housing, the numbers do not add up for Mr. Fashola. Publicly available records indicate that Nigeria has a housing deficit of 17 million units. Mr. Fashola has said he hopes to spend N360 billion per year on government directly building houses and deliver 17,760 flats in the first year. This means that the average cost of each apartment he hopes to build is N20.27 million. These are too expensive, and the number of apartments that will be put up at that rate, will not make a dent in Nigeria’s housing deficit,” the report states.
2016 Predictions
SBM Intelligence predicts that there will be consistent and sustainable efforts at resettling the 2.5 million people displaced by insurgency in the north-east and that Boko Haram will be dislodged from all their bases but will maintain some active cells. The group further predicts that there will be an escalation of crisis in the Middle Belt and a return to militancy in the Niger Delta but that the Shia’a/Sunni clashes in the North-West will not escalate to the level of an insurgency even though there will be more incidents of conflict.
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