As many as 1,844 prisoners were freed on 05 April, when armed assailants attacked a prison complex and police facility in the Imo state town of Owerri. Similar to prison breaks that marked the ascendency of the Boko Haram insurgency in Nigeria’s north-east, the assailants attacked the detention facility with small arms and explosives. In the immediate aftermath of the incursion, authorities in the neighbouring state of Abia imposed curfews in the cities of Aba and Umuahia, which also experienced acts of violence by armed assailants targeting security personnel and interests.
Igbo insurgents
While there have been no immediate claims of responsibility for these attacks, the violence has been attributed to the Eastern Security Front (ESF). Formed in December 2020, the ESF has emerged as the armed wing of the Indigenous People of Biafra (IPOB) which is seeking the creation of an independent Igbo state in south-east Nigeria. The raison d’etre of the IPOB and ESF is resurrecting the secessionist state of Biafra that briefly existed between 1967 and 1970 prior to being dismantled by federal forces. Although secession may be the primary objective, both IPOB and the ESF have shifted their focus to a more immediate objective aimed at preserving the political, cultural and economic dominance of Nigeria’s Igbo community over its resource-rich south-east.
As per the nationalist movement, the primary threat to this dominance stems from members of President Muhammadu Buhari’s Fulani community, whose generally nomadic and pastoralist vocations have increasingly seen pockets of the ethno-religious grouping migrating from northern and central Nigeria to the south-east. This, as per IPOB and the ESF, has come at the expense of the livelihoods of Igbo indigenes (particularly farming communities) who have become the targets of banditry, land theft and kidnapping – all attributed to Fulani communities.
In response, the ESF has increasingly mobilised against Fulani interests, while threatening state governments with sustained violence should they not enforce laws regulating Fulani pastoralism within the region. With south-east governors largely wavering on IPOB demands for ethnic marginalisation, the ESF has resorted to an increasingly militarised response involving targeted attacks on security and Fulani interests.
Fuelling the fire
In addition to the threat of a nascent nationalist uprising in Nigeria’s south-east, the Buhari administration has also had to stave off civil discontent linked to prevailing socio-economic conditions in the country.
While a rally in the price of oil – which accounts for as much as 90 percent of the country’s foreign earnings – has bolstered revenue inflows, it has created problems for the state’s attempts at deregulating the petroleum sector, including the removal of price-distorting subsidies.
This is one of the key objectives of the country’s long-awaited Petroleum Industry Bill, which – as per a statement by petroleum minister Timipre Sylva on 25 March – is set to be imminently passed by the Nigerian legislature. However, attempts at such deregulation continue to face significant contention from labour unions that are staunchly opposed to any increase in fuel prices.
This much was highlighted on 11 March in reports that the Petroleum Products Pricing Regulatory Agency (PPPRA) was set to increase fuel prices by as much as NGN 200 in line with the increase in the global oil price. The price increase set by the PPPRA contradicted a statement issued in early March by the Nigerian National Petroleum Corporation (NNPC) that there would be no fuel price increases until at least April.
In response, the Nigeria Labour Congress – the country’s largest union collective – threatened mass countrywide protests on 15 March should there be any increase in the fuel price. The proposed agitation drew the support of various civic organisations and student unions, which similarly rejected any increase in the cost of petroleum products. On 14 March, a day before the threatened agitation, the petroleum ministry dismissed media reports that the PPPRA was planning to raise the fuel price. In turn, the threatened labour union agitation was suspended.
Breaking records
Union sensitivities to fuel price increases are largely indicative of worsening socio-economic conditions in Nigeria and the growing burden on the country’s households. Highlighting this fact, the National Bureau of Statistics (NBS) issued a report detailing that Nigeria’s unemployment rate increased to 33.3 percent in the final quarter of 2020. As per reports on 17 March, unemployment in the fourth quarter of 2020 increased by more than 6 percentage points, rendering the country second only to Namibia in terms of countries with the highest unemployment rates globally.
The detail on the degree of unemployment in Nigeria came exactly a month after the NBS provided its most recent assessment of inflation. In a 16 February communique, the NBS noted that inflation increased to 16.47 percent year-on-year in January, the highest to be recorded in the country in 33 months. The NBS attributed the accelerating inflation to a spike in the cost of basic foodstuffs, partly due to import bans associated with the country’s import substitution policy (which is intended to promote local production and employment).
Godwin’s law
Another mechanism implemented by the Nigerian state to balance economic growth and inflation has involved the country’s key lending rate. In this regard, Central Bank of Nigeria (CBN) governor Godwin Emefiele announced on 23 March that the current benchmark lending rate of 11.5 percent would be maintained in the near term. This, according to the governor, was aimed at striking a balance between the need for price stability and growth.
There were considerations for the benchmark lending rate to be increased, in order to contain inflationary pressures. However, Emefiele claimed that the CBN’s policy at this time remains growth-driven, as Nigeria attempts to exit from a recession – the second to be experienced in the country in as many years – which has been linked to the acute economic impact of the coronavirus pandemic and associated drop in global oil demand.
The CBN has demonstrated similar consistency on another matter. On 24 March, Emefiele issued a communique dismissing reports that the country had formally adopted a new exchange rate for all government transactions. Emefiele noted that reports claiming that the CBN was formally adopting its Nafex rate, and thereby devaluing the local currency for the third time in the past 12 months, were incorrect and had misquoted a statement made by finance minister Zainab Ahmed on 22 March.
Emefiele confirmed that the CBN will continue to use a variable managed float exchange rate. The central bank governor’s position has doused optimism that Nigeria may seek to unify the country’s multiple exchange rates – a directive stipulated by multilateral institutions such as the World Bank and International Monetary Fund (IMF) as a necessary policy reform. Indeed, the CBN’s continued adoption of multiple exchange rates was cited as a key factor in dissuading the World Bank from releasing a USD 1.5 billion loan to the Nigerian government in the final quarter of 2020, which would have otherwise eased growing pressure on the country’s foreign exchange reserves.
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