Menas Nigeria Focus 0 6 /15 >>> Politically independent monthly news and analysis of strategic developments in Nigeria 06 Buhari faces insurgency, · Number 16 empty coffers, and · Volume partisan manoeuvres 015 The first month in power for President Muham- This would be a further recognition of Nigeria’s states such as South Africa and Kenya are more will be moving the military’s command and con- June 2 madu Buhari has been a whirlwind of summit central importance to US commercial and tendentious. trol centre to Borno State capital Maiduguri in meetings with world leaders, regional diplo- security interests in Africa. The fact that Obama order to demonstrate its determination to tackle macy, economic turmoil, tough negotiations made his first African visit as president to At the same time, Nigerians form one of the the Boko Haram insurgency at its source. with state governors, and gamesmanship within Ghana – not Nigeria – in 2009 still rankles with largest groups of economic migrants to Europe his own All Progressives Congress (APC). some top officials in Abuja. at a time when the migration issue is prompting The counter-insurgency effort political disarray. Buhari also diplomatically explained to his The scorecard is mixed so far. Buhari’s atten- For Western leaders, a reformed Nigeria is cen- regional counterparts that Nigeria wants to dance at the G8 meeting in Germany, hosted by tral to many of their policy imperatives in Africa. Buhari’s foreign policy strategy takes the form assume leadership of the multinational counter- Chancellor Angela Merkel, revealed the level of The trade and investment potential of the of concentric circles of priority: starting with the insurgency effort. Tensions have already sur- goodwill shown to his government by Western biggest economy on the continent is consider- region, then the continent, then the developing faced in this relationship – particularly between leaders. During the meeting, discussions started able, and its oil and gas resources make Nigeria world, and then global institutions such as the Nigeria and Chad – and Islamist insurgents are between Nigerian and US officials about an one of Africa’s top energy producers. As well, UN, World Bank, and IMF. With that in mind, he trying to exploit those strains by stepping up arrangement for President Barack Obama to resolving Nigeria’s security is key to tackling made his first foreign trips to Chad and Niger. terrorist operations in both countries. add a stopover in Nigeria to his planned trip to the crises in the wider Sahel region, and a cred- There he explained to Presidents Idriss Déby Kenya and Ethiopia in July. ible government in Abuja makes Nigeria a key Itno and Mahamadou Issoufou, respectively, After a suicide bomb in N’Djamena, the Chadian interlocutor because the West’s relations with how Nigeria is reordering its security policy. It air force announced it would be bombing >>> Spotlight 1 Energy industry 2 Niger Delta 5 Politics & society 6 Economy & finance 10 > Buhari faces insurgency, empty coffers, and > Corruption investigations mount > Oil spill compensation disputes > Senate and House leadership > Central Bank policy news partisan manoeuvres > Acquisitions news > Paying protection contracts > Buhari delays nominations > Banking sector scrutiny grows > Shuffles at the DPR > Oil theft in brief > Policy priorities > Falling oil revenue > Fuel crisis raises questions > Rivers State governors clash > Tackling Boko Haram > PDP in opposition 2 Boko Haram encampments, some of which are ENERGY INDUSTRY >>> Menas Associates in Nigeria. This prompted a predictably hostile response from Abuja, which has long claimed Corruption that arms supply networks close to President Nigeria Focus is published monthly Sold by subscription only Déby are linked to the insurgents. investigations mount Produced by Menas Associates staff 015 Managing Director: Charles Gurdon Resolving these issues and ensuring better Only a few weeks into President Muhammadu Editor: Patrick Smith regional coordination on security are evidently Buhari’s tenure, the oil industry faces several Production Editor: Blakeley Words+Pictures June 2 aspects of Buhari’s priority of priorities: to defeat corruption investigations, some old and some ISSN 1477-2426 the Boko Haram insurgents decisively within the new. © 2015 All rights reserved year. He does not accept the more commonly Goodluck Jonathan Menas Associates Ltd held view that real success against the insur- The claim by former Central Bank governor 31 Southampton Row gents will take many years. To some extent he stronger concern about the level of federal Lamido Sanusi, covered in a PricewaterhouseC- Nigeria Focus · Nigeria Focus London WC1B 5HJ sees the region through the prism of the 1980s, financial malfeasance under the Goodluck oopers (PwC) forensic audit, that billions have United Kingdom when the Nigerian military was in far better Jonathan administration, which is being blamed gone missing from the Nigerian National Petro- +44 (0)20 3585 1401 condition despite having a far smaller budget. for the current budgetary crisis. leum Corporation (NNPC) finances still has to be fully investigated. [email protected] www.menas.co.uk Buhari’s key adviser on security matters is Buhari was being ironic. He and his advisers now former chief of army staff Abdulrahman well know that financial malfeasance extended Nigerian Investment Promotion Commission tax Dambazau, who is likely to be named minister of to both the federal and state governments, holidays, flagged by former president Goodluck defence in the coming days. He is likely to preside and that many of the governors now petition- Jonathan’s finance minister, Ngozi Okonjo- over an extensive but gradual restructuring of ing Buhari for a bailout had wasted previous Iweala, allegedly allowed indigenous Seplat the military, with trainers from Britain and India allocations on white elephant projects, bloated and other oil companies to benefit. arriving soon to help develop specialised counter- administrations, and outright corrupt procure- insurgency programmes and boost the army’s ment and contracting. The matter of Malabu Oil & Gas and OPL 245 is Copyright capacity to handle information technology. being reviewed. In fact, the Economic and Finan- All information contained in this publication is copyrighted in Some of Buhari’s advisers are suggesting the cial Crimes Commission (EFCC) questioned former the name of Menas Associates Ltd and as such no part of this Economic strains publication may be reproduced, repackaged, redistributed, government embark on a new programme of petroleum minister Dan Etete, whose company resold in whole or in any part, or used in any form or any means The economic backdrop to high-level diplomacy municipal and state bonds issuance to raise Malabu received US$1.1 billion, at its Abuja office graphic, electronic or mechanical, including photocopying, and regional security issues is complicating many funds to rescue the state governments. The on 19 June. Further interviews are planned. recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the of the new government’s policies: particularly its governors want the federal government to publisher. reforms to oil and gas, and the power sector. transfer funds from the back taxes owed by the Investigations are also being made into the Disclaimer Nigerian Liquefied Natural Gas (NLNG) export role of Jonathan’s petroleum minister, Diezani Menas Associates Ltd cannot ensure against or be held responsible for inaccuracies. To the full extent permissible So depleted are the federal and state treasuries company and joint-venture oil companies. But Alison-Madueke, in controversies such as crude by law Menas Associates Ltd shall have no liability for any that Buhari held a meeting with the 36 state collecting those taxes is likely to be complex oil swaps, diesel subsidies, and strategic alliance damage or loss (including, without limitation, financial loss, governors on 23 June to discuss the deepening and surrounded by legal disputes. agreements. loss of profits, loss of business or any indirect or consequential loss), however it arises, resulting from the use of any material financial crisis and the payment of federal and appearing in this publication or from any action or decision state salary arrears. The president expressed The Nigerian Extractive Industries Transpar- taken as a result of using the publication. >>> www.menas.co.uk www.menas.co.uk surprise that the governors had not voiced ency Initiative (NEITI) is calling for Buhari >>> Spotlight 1 Energy industry 2 Niger Delta 5 Politics & society 6 Economy & finance 10 3 to investigate an allegedly missing US$18 and offshore processing agreements (OPAs) the NNPC and its subsidiary Duke Oil and various senior officials at the NNPC, Nigerian billion – comprising US$11.6 billion in Nigerian between the NNPC and foreign oil trading com- denying March allegations that it owed up to 20 Petroleum Development Company (NPDC), Liquefied Natural Gas (NLNG) dividends sup- panies that some believe to have links to Jona- cargoes to the NNPC and its subsidiaries. Aiteo and Petroleum Products Marketing Company posedly paid to the NNPC and at least US$7.5 than and senior Peoples Democratic Party (PDP) then announced, however, that it is ending its (PPMC). The passports of key oil traders have billion in underassessment or underpayment of members. The investigation has significantly swap and