N30 Billion Debt Issuance

N30 Billion Debt Issuance N30 Billion Debt Issuance

N30 Billion Debt Issuance

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Spotlight Nigeria

Hurrying to an uncertain destiny Beset by security problems and governance issues, Nigeria continues to confound its critics, with an economy that posts handsome growth – and a football team that can deliver satisfying results Antony Goldman in Abuja

When a constitutional furore threatened population is now estimated at 160 mil- marginalised regions. In the Niger Delta, to rip Nigeria apart in 1964, the country’s lion, infrastructure is at breaking point which produces for export more than 2 leading newspaper observed that, just four or beyond in at least a dozen teeming cit- million barrels a day and generates more years after independence from Britain, “we than 90 percent of foreign exchange earn- have perfected the art of staring into the ings, violence remains ever present, despite abyss without toppling in”. This talent for A sustainable peace will the adoption of amnesty in 2009 by many escapology has been sharpened through 50 militia groups fighting for a greater share years of emergency and crisis management, come not simply from of the region’s oil wealth. International oil marked by a civil war, several coups and a military victory over companies estimate that up to 20 percent of today a pattern of violence that begs ques- Nigeria’s production from fields on shore, tions as old as Nigeria itself: who is the extremists, but with or in shallow water, is regularly stolen by country for – and what will it take for it to organised criminal networks, often with remain as one? substantial investment to the complicity of officials in those same oil The challenges Nigeria faces today are rebuild the battered legacy companies and partners in the military and more severe than at any time since its government. It is a trade worth billions of disparate regions in the old Islamic em- of government dollars, supplemented by sidelines in pi- pires of the North, the oil-rich swamps racy from Cameroon to Ivory Coast – and of the Niger Delta, Yoruba kingdoms in the abduction of expatriates or prominent the west and feisty republicans in the ies and the ranks of the unemployed and locals, including in 2012 the octogenar- east were fenced together for colonial underemployed continue to swell. ian mother of the finance minister, Ngozi convenience by the British in 1914. The Tensions have been greatest in the most Okonjo-Iweala.  Curt Carnemark/World Bank Curt Carnemark/World

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Spotlight Nigeria

 The Ministry of Petroleum Resources ia itself. They also claim that while Ansaru notes that Nigerian output has climbed sig- has no real constituency in Nigeria, Boko nificantly since the 2009 amnesty and is Haram has been able to tap into a sense of presently at record levels. But delays over alienation from the secular state in one of the adoption of reforms first presented to Nigeria’s impoverished regions – and that parliament nearly four years ago have put a sustainable peace will come not simply a brake on new investment in oil explora- from a military victory over extremists but tion, while technological advances in the needs substantial investment to create jobs exploitation of shale gas mean that interest and new initiatives to rebuild the battered in Nigeria’s prodigious reserves of natu- legitimacy of government. ral gas has dwindled. While thousands of Opponents of President Goodluck former militants have undergone training in Jonathan maintain that security issues are a diverse range of skills, signs of opportu- symptoms of a deeper malaise, and that nity and jobs generated by a confident and his administration has shown little will or expanding private sector are few and far capacity to deal with longstanding govern- between. ance and infrastructure issues. Opposition In the North, the situation is potentially parties in February pledged to work togeth- more explosive still: an Islamist insurgency er to overcome personal rivalries between Shiraz Chakera CC by SA-2.0 threatens to place Nigeria on a new front- Kwa Falls and the Cross River State rainforest their leaders to create a political merger that line in a War on Terror that the USA and its could challenge the hegemony of the Peo- allies in Europe had hoped was fizzling out. ple’s Democratic Party (PDP), which has Boko Haram (Western education is a sin) curity police station in Abuja in November, lasted since the restoration of civilian rule began life as a fringe religious cult in Borno kidnapped a French national in Katsina in in 1999. State in the early 2000s. The administration December and ambushed an army convoy Within the PDP, powerful forces are lob- of Olusegun Obasanjo (1999-2007) stood in January. Pledging retaliation against bying quietly to ditch Jonathan in favour by as it morphed into a more militant force international interests, in protest at the of a northern candidate who might prove with links to the political establishment – French-led military coalition deployed more electable in 2015. Jonathan’s sup- and a military strike ordered in 2009 by against Islamists in Mali, it kidnapped and porters maintain he is in a stronger posi- his successor Umaru Yar’Adua provided killed foreigners in Bauchi State and in tion now than when he defeated a northern only a brief respite as Boko Haram went neighbouring Cameroon during February, rival for the PDP nomination before the underground and forged links with jihadist transforming the security environment in last elections, and are confident that the groups in other parts of Africa. northern Nigeria into an international issue. opposition will again splinter over per- Boko Haram has engaged in assassina- Security sources inside Nigeria say there sonal ambition. tions and suicide bomb attacks against a has been a huge improvement in the capac- The government is proud of the record of range of targets including police headquar- ity to combat terror, but that it is a regional strong economic growth, averaging more ters in Abuja, army barracks, police sta- rather than a national issue. While efforts than six percent a year since Jonathan came tions, banks and churches. But in 2012 a to defeat Islamists in Mali are critical for to office in 2010, and there is new interest separate faction, known as Ansaru, emerged the long term security in the region, in the by international funds in Nigeria. A tangi- with closer links to Al Qaeda in the Mah- short-term the fall-out from the interven- ble increase in services such as power sup- greb (AQIM). It attacked a maximum se- tion in Mali could further destabilise Niger- ply would be a further boost but, with pre- 2015 campaigning already gathering pace, the window for effecting change is begin- ning to narrow. It was for this reason that Jonathan so warmly embraced Nigeria’s victory in the African Cup of Nations football tour- nament in February, a triumph for one of the country’s few truly national institu- tions that was celebrated in all parts of the country. “Our enemies blame us even for natural disasters like floods,” one close ad- viser to the President said, “so the least we can do is take the credit when something goes right.” l

Antony Goldman, a regular commentator on Nigerian affairs for international media outlets, is director of Promedia Consulting, which specialises in business risk analysis

UN Photo / Devra Berkowitz and due diligence in Africa Ngozi Okonjo-Iweala

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Spotlight Nigeria Understanding the democratic de cit The way in which the return to civilian rule was organised in 1999 means that the democratic process is still falling short of delivering the expected benefi ts for Nigerian citizens Sylvester Odion Akhaine

After many years of authoritarian rule, Ni- political parties, which should be the en- In spite of their disenfranchisement, citi- gerians expected a better deal from the re- gine of the process. But Nigeria’s ‘political zens have continued to clamour for a share turn of democratic rule in May 1999. The parties’ do not operate as elsewhere. They of the ‘dividends of democracy’. But how nation’s oil wealth would have seemed to lack ideological content and are highly much of a democracy dividend is possible in make that practicable. However, after 14 idiosyncratic. A discerning commentator, a rentier economy where the informal sector years of civil rule, its democracy is still Dr Edwin Madunagu, captured this point preponderates and corruption holds rational grossly inhibited. when he said: “In Nigeria, most of the peo- planning to ransom? The country’s neigh- The ‘pacted’ nature of the country’s tran- ple who aspire to high-profi le elective po- bours, like Ghana and Niger, have smaller sition to democracy has turned out to be its sitions fi rst announce their ambitions, and reserves of crude oil but at least they have Achilles’ heel. Authoritarian rule had left Ni- then seek political platforms on which to functioning refi neries, while Nigeria’s four geria badly divided and also splintered the realise them.” refi neries are comatose and subjected to per- solidarity of the powerful military, which, The shortcomings have brought a new petual maintenance, which is often a conduit in the words of one of its former chiefs, had phenomenon – the emergence of state gov- for siphoning public funds. The venality of become an “army of anything is possible”. ernors as powerful players. With control politicians is deeply rooted and politics has After the death of the dictator Sani Abacha over state resources, they have blocked any become the only game in town. Public funds in May 1998, the military leaders were at last democratic deepening in the country. are misappropriated and misapplied with im- ready to look for a way out of the problems Most elections held under the country’s punity. At best, those who steal public funds they themselves had created and so ordered fourth republic have not met minimum are either set free through plea-bargaining or the transition to civil rule as the solution. electoral standards. The 2003 electoral ex- given a soft landing with a conviction that The northern region had, for the most part, ercise was dismissed as a charade by Justice involves the option of a fi ne. exerted central authority ever since Nigeria’s Sylvester Nsofor in a dissenting judgment Optimists would like to see the current independence in 1960. And in 1993, the mili- at the Presidential Election Petition Tri- setbacks as typical of a learning curve. tary, largely led by northern offi cers, had an- bunal. The 2007 elections were so tainted With time, the rule of law will improve, nulled a free and fair presidential election that the Commonwealth Observers Group politicians will take to politics with spirit of won by Chief M. K .O. Abiola, a Yoruba man said that Nigeria fell below the standard it sportsmanship and the dividends of democ- from the south-west region. set for itself. And the 2011 elections were racy will trickle down. Yet, the errors of Ni- A pact between the major regional power not without drawbacks, being character- geria’s democracy are a deliberate subver- brokers had, in effect, become essential to ised by process-rigging, under-age voting, sion of a known path for self-indulgence. It restore stability. The one that emerged in ballot-stuffi ng and violence which left sev- will take more than optimism to transform 1998 did reduce the uncertainties of the tran- eral members of the National Youth Service the country that most Africans look up to sition process itself but it simultaneously un- Corps dead. for leadership. ● derlined its defi cit – the narrowing of demo- cratic space in terms of participation and Sylvester Odion Akhaine, a former general inclusivity. The transition process produced secretary of the Campaign for Democracy, is only two presidential candidates: General senior lecturer in the Department of Political Olusegun Obasanjo, a former military head Science, State University of state, and Chief Olu Falae, a one-time Finance Minister and Secretary to the Fed- eral Government. Both were from the south- west, but it was only Obasanjo who could be trusted to guarantee the interests of the military. The transition arrangement man- aged to assuage the people of the south-west on the issue of the earlier annulment, while the military were indemnifi ed by the consti- tution they themselves had approved. The pact was, at best, a temporary solu- tion in that it did not tackle the problems of skewed federalism, the fi scal emasculation of resource-bearing states and the issue of corruption. It was democracy by undemo- cratic means. Democracy, even of the au- thoritarian hue, does not run well without

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Spotlight Nigeria The energy sector powers up Millions of Nigerians who have for decades endured epileptic electricity supplies, or none at all, are hoping for a brighter future as government reform of the country’s troubled power sector enters a crucial stage Tunde Obadina

The privatisation of the power sector is ex- on-grid generation is now above 4,000 MW. tion or have been licensed to be built. There pected to lead to one of the biggest advance- There has been more gas to fuel thermal are investment and financing agreements for ments in the Nigerian economy since Af- generation plants as well as additional out- the power sector with a number of major in- rica’s most populous nation first embarked put from four new plants under the National ternational companies and financial organi- on its structural adjustment programme in Integrated Power Project (NIPP). sations, including USA’s General Electric the mid-1980s. The government hopes the reforms will and Germany’s Siemens, as well as the ex- “Today is a very significant day for Ni- boost supplies to 14,000 MW by the end of port-import banks of the US and China. Last geria, significant because this is the issue 2013 and 40,000 MW by 2020. This may year, South Korea’s Daewoo Engineering of public-private partnership in action,” seem over-ambitious, given current levels and Construction signed a memorandum of Tony Elumelu, the chief executive officer of production, but officials say it is feasible, understanding to facilitate the production of of Transcorp/Woodrock, the preferred bid- given that more than 40 new electricity gen- 10,000 MW while China-based Sinohydro- der for the Ughelli Power Plc generating eration plants are currently under construc- CNEEC Corporation agreed to build a 700  plant, said in February 2013 at the signing of agreements between power companies and the state-owned Nigerian Bulk Elec- tricity Trading Plc. President Goodluck Jonathan’s admin- istration last year appointed the Canadian firm, Manitoba Hydro International, to manage the national grid under a three-year contract to operate the state-owned Trans- mission Company of Nigeria (TCN). And now, the government is in the final stages of concluding the sales of five power genera- tion plants and ten distribution companies to private investors. Officials expect that these utilities, unbundled from the notoriously inefficient Power Holding Company of Ni- geria (PHCN), will be in the hands of the foreign and local companies approved by the National Privatisation Council as the preferred bidders for the assets by mid-2013. Although Nigeria is Africa’s second big- gest economy and its leading oil producer, more than half the population have no ac- cess to electricity. For households and busi- nesses connected to the grid the experience has been an endurance of frequent and of- ten long daily power outages. Most compa- nies and wealthy households must rely on private electricity generators for backup, which can be expensive in fuel costs. Despite spending, on average, US$2 bil- lion annually on the power sector, succes- sive federal governments have struggled to find a lasting solution to the underperform- ance of the PHCN, which until recently did not produce much above 3,000 MW for a na- tion with an estimated demand of more than 10,000 MW. But since President Jonathan launched his administration’s Roadmap for the Power Sector reform in August 2010,

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Spotlight Nigeria

 MW hydro power station in Niger State at a Less progress is visible in implement- the fourth quarter of 2014. The state-owned cost of about $1 billion. ing long-standing plans to reform Nigeria’s Nigerian National Petroleum Corporation The government has also taken steps to ineffi cient downstream oil sector to end (NNPC) is also working on a $23 billion make the power sector more attractive to decades of dependence on imported petro- deal reached with the China State Construc- private investors by adjusting existing pric- leum products and perennial fuel shortag- tion Engineering Corporation in May 2010 ing regimes that hitherto limited the ability es. Strong opposition from powerful trade to build three new refi neries in Nigeria with of producers to make a profi t. In June 2012 unions and politicians seeking to maintain total capacity of 750,000 barrels per day, as the authorities launched a new Multi-Year- the status quo have thwarted attempts to well as a petrochemical complex. Tariff Order (MYTO) that provides for a privatise state-owned refi neries and abolish Nonetheless, many economists remain phased increase of electricity retail tariffs sceptical about the prospects of the gov- over the next fi ve years. Sam Amadi, chief ernment achieving its twin objectives of executive offi cer of the Nigerian Electric- Economists remain getting private investors to build refi neries ity Regulatory Commission, said: “The sceptical about the and turning Nigeria into a net fuel exporter. MYTO has restored confi dence in the Ni- These changes are unlikely to occur with- gerian electricity supply industry. This con- prospects for the out Nigeria’s rulers mustering the political fi dence is more important than the increase will to push through controversial reform in generation because it is confi dence in government’s objective of of the downstream sector. Deregulation Nigerian electricity market that will spur getting private investors and liberalisation of the sector is one of the investment in sustenance and sustainability objectives of the Petroleum Industry Bill of electricity supply.” to build re neries and (PIB) currently with the National Assem- Disappointments are likely as the realities bly. Initially introduced to parliament in of transforming a sector that has been im- turning Nigeria into a net 2008 and presented again in modifi ed form paired by decades of neglect and misman- fuel exporter in July 2012, the PIB also aims to restruc- agement become more evident. The biggest ture the NNPC into a profi table concern, challenge could arise in getting the available raise taxes paid by international oil compa- energy to consumers. Although existing pow- fuel subsidies. The failure to deregulate has nies and increase development funding for er plants can produce about 6,000 MW, the stopped many private investors from build- petroleum host communities. This crucial poorly maintained transmission infrastructure ing new refi neries, despite the government and complex legislation has been delayed struggles to deliver more than 4,000 MW. having issued several licences to private in parliament, largely as a result of differ- Unlike generation and distribution compa- companies in recent years. ences between the various stakeholders nies that will be partly privately owned, the The Minister of Petroleum Resources, vying for bigger slices of the nation’s oil transmission system will remain under state Diezani Allison-Madueke, said in Octo- profi ts. ● ownership. Offi cials are aware of the fi nan- ber 2012 that government plans to spend cial implications of this and are exploring around $1.6 billion on the turnaround main- Tunde Obadina is an economist and freelance ways to involve private investors in fi nancing tenance and upgrade of its three refi neries. writer transmission infrastructure projects. It aims for the repairs to be completed by www.nog-logistics.com

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Spotlight Nigeria “I am very confident there will be a massive new wave of investment activity”

IntervIew Atedo Peterside, member of the National Council on Privatisation and chairman of the NCP’s Technical Committee

Global: With the anticipated finalisation of subsidy from the Federal Government and the sale of power generation and distribu- a cross-subsidy too. The intention is that the tion companies to private sector operators, very rich should pay more than they need to are you confident that the management of pay for electricity so that the very poor can Nigeria’s power sector can soon become pay tariffs which are significantly less than sufficiently well harmonised for a new the cost of providing electricity to them. wave of investment in electric power to begin all across the country? Will the regulator be seen to be truly Atedo Peterside: Yes, I am very confident independent of government and free from that there will be a massive new wave of political interference? investment activity. Many analysts overly Yes, the National Electricity Regulatory emphasise insufficient power generation in Commission (NERC – the Regulator) is Nigeria. They forget that 40-50 percent of sufficiently independent. The Chairman of the power we generate is traditionally lost NERC and its commissioners cannot be on account of transmission and distribu- fired except via a Senate vote. tion inefficiencies. Of this total distribu- similar to what the Nigerian telecommuni- tion losses alone account for 35-40 percent, cations sector witnessed over the course of Do you expect the power plants that are while the transmission losses typically fluc- the last decade. currently being built by government to be tuate between five and ten percent. privatised sooner or later? Privatisation of all the 11 Distribution For new investment to be sustainable, the The power plants currently being built by the Companies (Discos) is therefore the key. traditionally low customer tariff will clearly Government are the National Integrated Pow- At present there is a very poor alignment of have to be increased over time. How dif- er Project (NIPP) plants. These are owned by goals between staff of the Power Holding ficult do you think it will be to establish a all three tiers of Government (Federal, State Company of Nigeria (PHCN) and the con- pace of increase that is acceptable to both and Local). I expect these plants to be priva- sumer. PHCN staff know that they will be customers and investors? tised eventually after a consensus emerges to paid their salaries in full whether or not they Tariffs were increased on 1 June 2012 dispose of them. The plants that we are pri- rectify a local distribution fault. With pri- and that went a long way towards making vatising in 2013 (the Gencos) are the Federal vatisation of the Distribution Companies, the entire value chain healthy. All things Government plants which belonged to the old the new core investor pays out between being equal, we expect privatised Discos State Monopoly Power Company – the Power NGN9.3 billion and NGN26.5 billion to ac- to collect enough cash via the pre-paid Holding Company of Nigeria (PHCN). These quire a 60 percent equity in a Disco. This is meters of consumers to cover all their are four Thermal plants (Afam, Geregu, an upfront payment and a financial outflow. outgoings, while also leaving them with Sapele and Ughelli) and two Hydros (Kainji The core investor only receives financial a healthy profit. Of course, a major out- and Shiroro). In addition, there is the Egbin inflows when there is electricity running going for the Disco is payments for the thermal Genco, which was sold to Kepco through a consumer’s meter and so he has power they are consuming as stipulated of Korea by a previous government, but the a vested interest in rectifying all reported in the vesting contracts they signed with transaction did not progress because it got faults/losses speedily, so that he can keep the Bulk Trader. The Bulk Trader will, in bogged down by a protracted stalemate. This the inflows rolling in. Likewise, the private turn, pay the Generation Companies via transaction is being re-activated and I expect sector controlled Discos would accelerate Power Purchase Agreements. closure soon on the basis of modified/re-ne- new investment activity that will lead to a The tariff regime that was established in gotiated terms. There are two other thermal sharp reduction in power outage on account June 2012 is anchored on a formula built plants (Olorunsogo and Omotosho) which of distribution faults/losses. into a Multi-Year Tariff Order. The tariffs were in the process of being built for PHCN The case for new investment activity in will adjust naturally from then on because by Chinese contractors when a decision was the Generation Companies (Gencos) and they are tied to various parameters such as taken to privatise PHCN. These plants should transmission is also very strong. New IPPs the cost of fuel and the inflation rate. The be disposed of by offering the Chinese con- will spring forth as distribution becomes tariffs are also progressive and so the unit tractors the first right of refusal to purchase more efficient and electricity demand surg- cost of electricity jumps up as the usage them. I expect substantial progress in this es. I expect an entire sector awakening, increases. The poorest consumers enjoy a area very soon. l

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Spotlight Nigeria Growth lures big investors Africa’s sleeping giant has finally awoken to the potential of becoming a highly favoured emerging market, with the ambition of becoming one of the world’s top twenty economies Tunde Obadina

Nigeria is acquiring the look of an economy the continent. Local businesses and multi- Government officials say there is grow- in rapid transformation. Having grown at nationals already established in the country ing investor confidence in the administra- an average annual rate of 8.4 percent since are leading the new push. An obvious ex- tion’s economic reforms, especially in its 2000, according to IMF data, the economy ample of the former is the expansion of the policies geared to achieving macroeco- is currently forecast by Nigeria’s National industrial empire of the Dangote conglom- nomic stability and providing incentives Bureau of Statistics to grow by 6.75 percent erate, owned by Aliko Dangote, Africa’s to support private enterprise. In his budget in 2013 and 7.27 percent in 2014, which wealthiest man. In June 2012 the industrial- speech in October 2012, President Good- should place it among the world’s better ist opened an extension of his company’s luck Jonathan boasted that his administra- performing economies. Obajana plant in Kogi State, raising its tion’s reforms to involve the private sector With such enviable growth prospects, as capacity to 10.25 million tonnes, making in agribusiness had so far succeeded in at- well as a rapidly expanding middle class it one of the world’s biggest cement facto- tracting $7.8 billion in commitments to the and consumer markets, it is little wonder ries. The Dangote group, which has cement agricultural sector, with the prospect of cre- that Africa’s most populous nation has be- plants in other parts of Nigeria and in other ating 3.5 million new jobs by 2015. He said come an emerging market attracting the African states, has invested some $6.5 bil- the latest fiscal measures had resulted in the interest of local and international inves- lion in its cement business in recent years establishment of 13 new private rice mills, tors alike. in a drive to become one of the world’s top with total capacity of about 240,000 tonnes. Officials in Abuja have lately been busy eight cement companies by 2015. The growth in private investment could playing host to executives of international Dangote has also taken steps to expand yet help Nigeria realise its ambition to be- corporations that have visited the Nigerian sugar production in Nigeria, including re- come one of the world’s 20 largest econo- capital to size up the nation’s market with a cently acquiring a 95 percent stake in Sa- mies by the year 2020. Officials point to view to entering into investment deals with vannah Sugar Company. evidence of a more friendly business en- government and local business partners. Companies are expanding to take ad- vironment in a country where economic In January this year alone, firms from the vantage of the growing purchasing power nationalism used to be prevalent. “There USA, Canada, the Netherlands and Turkey of Nigeria’s fast expanding middle class. has been a change of attitude to investors signed accords that held promises of invest- Guinness Nigeria hopes to complete a among officials and ordinary people in Ni- ment in Nigeria totalling NGN800 billion US$372 million investment to expand its geria. They now know that investors are (US$5.2 billion), according to reports in beer production by 50 percent, by Novem- coming to add value to the economy, not Lagos-based BusinessDay. ber 2013. Nestle Nigeria, part of the Swiss to cheat the nation,” said Amos Y. Sakaba, Most remarkably, the attraction is now food processing multinational, plans to in- chief operating officer of the One Stop more towards the non-oil sector, rather than vest $635 million over the next ten years, Investment Centre at the Nigerian Invest- the country’s lucrative hydrocarbon indus- with a view to tripling its sales in Nigeria ment Promotion Commission. “Now local try – the main magnet for foreign investors over the period. communities are willing to defend foreign in the past. In January, the USA’s General and domestic investments in their areas be- Electric signed a memorandum of under- cause they see it as helping to improve their standing with the Federal Government lives.” to invest $1 billion in the next five years, But some observers worry that the rise with an initial commitment of $250 million in economic growth and investment in Ni- to build a factory in the free trade zone in geria may not herald the fundamental trans- Calabar in the south east. Last year, Swiss- formation of the economy needed to lift the based Glencore International signed an majority of the country’s population out of MOU to invest $1 billion in mining, energy poverty. “It is hard to say if more invest- and infrastructure. ment in Nigeria is a reflection of growing Although not all investment pledges ma- confidence in the country’s economy or terialise, some significant progress has been if it is just a reaffirmation of the fact that recorded in the past decade in the scale and no matter what, there are some sectors in scope of private investment in agriculture, Nigeria where the profit yield is just too telecommunications and retail business. tempting to be ignored,” said Soji Akinri- According to the UN Conference on Trade nade, a journalist and director of Mayfive and Development, foreign direct invest- Media in Lagos. “The problem is that the ment (FDI) flows into Nigeria rose from increase in the level of investment hasn’t $6.1 billion in 2010 to $8.9 billion in 2011, brought down poverty rates or tackled the making it Africa’s biggest FDI recipient The Dangote group has invested $6.5 billion in its biggest problem of Nigeria today: unem- and accounting for a fifth of all flows into cement business ployment.” l

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Spotlight Nigeria Security challenges: the Islamist threat Islamist insurgency in parts of the north has been in the news headlines, but is just one of several issues threatening Nigeria’s security in difficult times Sola Tayo

With an Islamist insurgency in the north, sectarian violence in the Middle Belt and a costly amnesty programme failing to end militant activity in the Niger Delta, Niger- ia’s government is battling against several threats to the nation’s security. When the Islamist group Boko Haram announced a ceasefire in its campaign of violence in northern Nigeria earlier this year, the news was greeted with caution. The ceasefire was not recognised by some of the group indicating a split, with one half seemingly keen to lay down their arms and engage in dialogue while the other half con-

tinue to terrorise the region with shootings Nigerians Saving Nigerians http://nigerianssavingnigerians.org and suicide bombings. Crackdowns by the police are not always effective Boko Haram has made headlines since the group launched its armed offensive in out militants. This has created antipathy to- tween Muslims and Christians have result- response to a government crackdown in wards the government and a reluctance for ed in sporadic and deadly acts of violence 2009. The group’s then leader Moham- civilians to engage with security services in the Middle Belt. With Boko Haram op- med Yusuf was killed along with dozens about the whereabouts of suspected mili- erating across the north the likelihood of of members when they attempted to storm tants. revenge attacks or retaliation from angry police and government buildings in Maid- Regional intervention in Mali could fur- Christians will increase. uguri, its base in Nigeria’s far north. ther aggravate the crisis. While there is Before Boko Haram came to promi- Opinion is divided on the sources of the no conclusive evidence of its being an Al nence, militant activity in Nigeria was as- group’s funding. The finger has been point- Qaeda franchise, more information is sug- sociated with groups in the Niger Delta, ed at wealthy northern Nigerian business- gesting that Boko Haram operates with in- that waged war on the oil companies they men and politicians. There is also specula- surgents in the Sahel and Al Qaeda in the accused of impoverishing the local people tion that they receive support from Salafist Islamic Maghreb. The foreign minister of and profiteering from their misery. An am- groups in the Gulf. The alleged links be- neighbouring Niger recently warned that nesty programme in 2009 promised mili- tween Boko Haram and politicians makes Nigerian militants were being trained in tants a monthly income of $400 in return for uncomfortable reading and, if true, is an camps across the Sahara. As West Africa’s for an end to the violence and kidnapping indication of why the government is seem- economic and military giant, Nigeria is tra- that had turned the area into a hotbed of ingly unable to put an end to the violence. ditionally the largest contributor of troops lawlessness. Around 30,000 militants were In April 2012, President Goodluck Jonath- to regional conflicts. The French-led inter- signed up to the programme. an said he believed that the government and vention in Mali is being supported by the The amnesty programme has created re- security services had been infiltrated by the Economic Community of West African sentment in the impoverished north with group and its sympathisers. In November States but, while Nigerian troops are fight- locals questioning the government’s reluc- 2011, a northern politician, Senator Ali ing Islamists in the Sahel, opportunists are tance to offer a similar deal to Islamist mili- Nduma was arrested and accused of being a likely to capitalise on the security vacuum tants, and the winding up of the programme sponsor of Boko Haram. His case is await- and further escalate attacks in the north. in 2015 could prove to be problematic for ing trial. In January 2012, it was reported A failure to establish security in the north the government. At its peak, militant activ- that Ibrahim Shekarau, the former governor will almost certainly see an increase in off- ity in the region resulted in almost halving of Kano state, had been arrested and ques- shoots or splinter groups like Ansaru, who the country’s oil production, costing Niger- tioned over allegations that he had made have claimed responsibility for the kidnap- ia’s economy billions of dollars. Worrying- regular payments to Boko Haram. These ping of foreign workers in Bauchi. The ly, as the amnesty programme will end dur- reports have been denied by his office. group issued a statement claiming that it ing an election year we could see increased There have been crackdowns by the po- would avenge interventions in Afghanistan violence in the south during a traditionally lice, army and intelligence services and and Mali by western powers with more kid- volatile time. l emergency rule where necessary. The ef- nappings of foreigners. fectiveness of this is questionable. The In addition to Boko Haram, the Nigerian Sola Tayo is an Associate Fellow with the Joint Task Force (JTF) has been accused government has to deal with other national Africa Programme at Chatham House of antagonising civilians in its zeal to root security threats. Long held grievances be-

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Spotlight Nigeria Where Eagles dare to fly

Victory in the African Cup of Nations in Soweto in February brought glory and riches to Nigeria’s Super Eagles and their coach , who will now have a stadium named after him Leonard Lawal in Lagos

If there is a nation crazy about football it is are now instant superstars, with millions Nigerian coaches,” Keshi told journalists Nigeria. It can be taken as a certainty that of naira raining down on them from every in Soweto after the match. And the next the English Premier League side, Chelsea possible source. Coach Stephen Keshi, who day, following a meeting with Nigeria’s FC, has more fans in Lagos than it does in was previously derided by the Nigerian me- sports minister Bolaji Abdullahi, the coach Chelsea – even if most of them can’t spell withdrew his resignation (which had been the word Chelsea and can manage to live on prompted by a series of disagreements with less than US$2 a day. Regaining the African the Nigerian Football Federation). Here in Nigeria, foreign-made goods are Keshi – who will now have a stadium favoured over any home-grown variety, and championship for the first named after him in Asaba, the capital of so it is with our football. Much was expect- time since 1994, the Super his home state, Delta – can now set about ed of two Chelsea players, boosting the profile of the game in Nigeria and , in bolstering the Nigeri- Eagles are now instant at all levels. an national squad, the Super Eagles, as they “Often talents playing at home have been played their way to victory over Burkina superstars, with millions under-appreciated,” said Samuel Elumelu, Faso in the recent African Cup of Nations of naira raining down on a Lagos-based sports writer with Daily (AFCON) tournament in South Africa. Newswatch. “It is because we run one of But the scorer of the crucial winning them from every source the worst leagues anywhere. How do you goal in the 10 February final in Soweto explain a league that plays 32 matches in 14 was , who normally plays for months and [whose] winners have emerged the little-known and little-favoured Warri dia for choosing too many “local boys” for from the boardroom rather than from the Wolves FC. his team, has emerged as a national hero. points amassed?” Regaining the African championship for “Winning this tournament is mainly for “Nigerian national coaches, because of the first time since 1994, the Super Eagles my nation. I want to dedicate this to all such complications, prefer the ease of a Christian Liewig – Abacapress/France Telecom Abacapress/France Christian Liewig –

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Spotlight Nigeria

Younger generation makes a stylish mark One of the performances before the Soweto final of the African Cup of Nations was that of Oliver Twist, a popular number by Nigeria’s Dapo Daniel Oyebanjo, better known as D’Banj. The whole stadium erupted as fans from across Africa sang along. D’Banj is not the only Nigerian star on the rise in Africa. Another is 2Face Idibia, who had a hit with his song African Queen in 2006 and has gone Christian Liewig – Abacapress/France Telecom Abacapress/France Christian Liewig – on to win a series of international awards. As the Nigerian fans celebrate the team’s victory entertainment industry expands, the swagger of foreign-based player who plays [in a] regu- Don Jazzy of Mo’ Hits records and other Nigerian lar league and trains with the best training stars has become funkier as the money rolls in. facilities available,” Elumelu added. “But Nigeria is now a top entertainment even with that, there are pockets of Sunday destination, with producers arriving to find Mbas here and there, at home… I guess and sign up new hip-hop talent, while popular what Keshi is clamouring for is to look American rappers come on the lookout for deeper and give true potentials a chance.” collaborations. Endorsement is ripe with mobile Akin Ajanaku, a sports consultant and phone companies spending millions of dollars manager, said: “Nigerian local players are on adverts for local shows and artists. Serious getting bolder and ready for the world, is a household name money is also being made in the Nollywood thanks to Stephen Keshi’s doggedness.” Foreign clubs may have wasted no time film business, which turns out some 200 videos for the home video market every month. In short, in bidding to sign up Sunday Mba, but there Nigerians are making their mark across the continent. will certainly be other players well able to Actress is well-known enough around the world to have appeared on Oprah take his place. Nigeria is not lacking in tal- Winfrey’s show, while CNN has interviewed her alongside other Nigerian stars such as Omotola ent but the management of the abundant Jalade Ekeinde, Tontoh Dikeh, Mercy Johnson, Desmond Elliot and Ramsey Noah. In Malawi, talent has usually turned out to be both in- Kenya and Botswana, Nollywood star Rita Dominic is a household name, winning commercial adequate and corrupt. endorsements as long as her legs. The prospect of brighter times for local In the swanky Eko Hotel in Lagos, fashion shows are held every weekend, all with locally made teams should at least enhance football’s fabrics and local models – some of which, like Adaora Akubilo, have an international profile. The appeal for young Nigerians, who in recent streets of Lagos turn into catwalks at the weekend as fashionistas dress to kill. years may have found themselves drawn And this creative boom is all down to Nigerian youths staying and making their mark at home more readily into the music scene, if not the booming Nollywood film business or even rather than seeking fame abroad. its emerging software industry. Lagos State governor Babatunde Fasho- la, himself a football enthusiast, has urged sports administrators to sustain the mo- mentum and to upgrade both the national league and the game at the grassroots level. After Nigeria’s unexpected triumph at the AFCON final, he approved the distribution of N59 million ($380,000) to be divided among the coaches, the captain, , and the rest of the team. And the money has not stopped flowing since. governor Emmanuel Ud- uaghan gave Keshi a house in the state cap- ital, Asaba, as well as a cheque for NGN8 million ($51,000), and he promised each Eagles player NGN2.5 million ($16,000). Other benefactors have included leading businessmen such as Aliko Dangote and Mike Adenuga. l

Leonard Lawal is a Lagos-based writer D’Banj has won a series of international awards

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