The Third RailBy Nana AmpofoThe International Monetary Fund

The Third Rail

By Nana Ampofo

The International Monetary Fund (IMF) released its world economic outlook report in April 2013 forecasting 7.2% per annum real GDP growth for Nigeria in 2013. That’s marginally above Nigeria’s five year trend and considerably in excess of the outlook form the world at large and Sub-Saharan Africa this year: 3.3% and 5.6% respectively. 

Beyond this, there is the expectation that current power sector reforms will transform Nigeria over the medium term as industrial activities currently relegated to internationally uncompetitive, minor or non-existent recesses of the economy by unreliable power supply are given the help they need. Therein lies some of the excitement around government plans to raise a US$1 billion Eurobond before the end of the year. 

Still, despite the excitement of growth and reform in Nigeria, there are substantial concerns marring the outlook over the short to long-term: the most prominent include security, governance and political stability. This brief paper will focus on questions of security and political stability. 

Delta Insecurity

Nigeria’s 2013 budget assumes oil production this year will inch up from 2.48 million barrels per day (bpd) in 2012 to 2.53 million bpd at US$75 per barrel. However, those ambitions have not been realised thus far. 

Earlier last month, Finance Minister Ngozi Okonjo Iweala confirmed that Nigerian oil production is at a low ebb. Similar statements have been made by the Nigerian National Petroleum Corporation (NNPC) bemoaning contingent falling income for government and independent operators alike, not to mention environmental damage and destruction of human life. Shell for example declared force majeure at its Nembe Creek Trunk Line facility in April 2013. 

This “quantity shock”, as the minister put it, has been attributed to illegal oil bunkering and pipeline vandalism in remote areas of the south-eastern states with a view to illegal supply of crude locally and internationally.
 The official response includes

•    Inter-Agency Maritime Operation Committee consisting of the NNPC, the air Force, navy, police, state-level security services, customs and the judiciary to ensure there is a coherent policy across government. 

•    Military ‘Joint Taskforce (JTF)’ in the Ondo, Edo, Delta, Bayelsa, Rivers and Cross Rivers states: military activities include interception of criminal vessels, refineries, kidnappings and the 
criminals themselves but there are also     initiatives to engage local communities     and persuade them away from sabotage.
•    Repairs to damaged military infrastructure, which may also cause     delays to production.

Northern Instability 

Despite the centrality of oil output to government revenue and export earnings alike, events to the north appear even more pressing. Approximately 3,000 people have been killed since 2009 in violence involving the Islamist group, Boko Haram, and its offshoot Ansaru. The antagonists are nebulous but could be neatly summarised as home-grown salafists campaigning violently for the repudiation of ‘western’ cultural imports (and associated individuals), the imposition of Sharia law and/or the creation of an Islamic state separate from Nigeria. In addition to the above ultimate goals, Boko Haram operatives have been demanding the release of their members arrested by Nigerian authorities. 

On Tuesday, 14 May President Goodluck Jonathan announced a state of emergency in the north-eastern states of Yobe, Borno and Adamawa where Boko Haram activities have been concentrated (legally this allows security forces greater leeway in the application of deadly force as well as additional powers of arrest). The president’s televised statement also announced the deployment of additional forces to those states in order to reassert Federal hegemony. Thus far, the move appears to have been received with a mixture of welcome and trepidation. Welcome because the government is being seen to act (though there have been other states of emergency in the past) and trepidation because of concerns around implementation and its repercussions. 

We’ve seen counter-insurgency ‘surges’ applied in other parts of the world with varying degrees of success. But going by the (applied) book, victory depends on:

(i)    Political commitment as well as the financial and technical capabilities of the state(s) involved. 
(ii)    The separation of the population at large from insurgents 
(iii)    Conversion and reintegration of the majority of insurgents into normal society. 
(iv)    Detaining or killing a minority of insurgents who fight the most fervently 
President Goodluck Jonathan’s televised statement admitting that sections of the country have slipped     from federal control and that this situation will not be allowed to continue stands out as an indicator of commitment; even more so because it is backed up by new troop numbers and the declaration of a state of emergency. Additionally, defence spending has increased steadily in recent years e.g. 2013 budget allocation of 348.91 billion Naira compared to 326.35     billion Naira for 2012. It appears that the chief executive at least is serious about finding a solution.         
Nigerian forces appear well-resourced and experienced. However, looking to precedent, separating the civilian population from insurgents may be a source of weakness in the application of this policy. On 1 May, for example, Human Rights Watch released evidence alleging that Nigerian military had destroyed 2000-2275 homes and killed 183 following a Boko Haram attack on a military patrol in which one soldier died. One interviewee was quoted saying he’d hear soldiers say “since you people are not cooperating with us and are hiding your brothers, we will treat you as one of them”. Failing to interrupt this kind of rationale among Nigerian forces sent to the north east risks failure on the first pillar and radicalising locals over time. 

On point (iii), President Goodluck Jonathan has also announced an amnesty programme for Boko Haram members (despite his own earlier reticence and poorly received by Christian communities). It includes a detainee release programme, the first phase of which has an emphasis on “women and children who have been in detention on suspicion of involvement and/or connection with insurgency in some parts of the country”, according to Senior Special Assistant to the President on Public Affairs Doyin Okupe quoted by This Day newspaper  to be followed by “other phased releases where cases will be treated on their individual merit by the Defence authorities and security agencies”. The idea of releasing ‘hardened criminals’ as put by a representative of the 19 Northern States Christian Forum is difficult to swallow and there is the fear of turning out large numbers of radicalised individuals on to the streets. 

However, the purpose is to drive a wedge between the most fervent Boko Haram combatants and the more open periphery–in the interests of peace and limiting the use of force. Implementation is the key. Civil rights organisations have long lamented detention without charge in the north (well before the state of emergency). Presumably focus will be put on those individuals who have not been charged with any crime and against whom evidence is weak. There is also the fact that ‘women and children’ are the initial beneficiaries. Morally, the incarceration of children is problematic (even more so when for extended periods without charge) and it seems reasonable to assume that children will be more amenable to reintegration than the aged and battle-hardened. 

Political Dimensions

Nigeria will hold general elections in 2015. Predicting results two years beforehand would be premature but some things are clear even at this early stage. Support for President Goodluck Jonathan’s People’s Democratic Party (PDP) will be shaped in part by the ability of the present administration to end painful power rationing and erratic supply, and to neutralise Boko Haram. As such, policies in Yobe, Borno and Adamawa to the North, and in Ondo, Edo, Delta, Bayelsa, Rivers and Cross Rivers to the South outlined above will be key areas to watch. 

Although the PDP has won every election since the 1999 return to multiparty democracy thus far, it will face a new threat in 2015 if party politics continue on their present trend–the Action Congress of Nigeria, the Congress for Progressive Change, the All Nigeria Peoples Party and the all Progressives Grand Alliance opposition parties united in February 2013 to form the All Progressives Congress. Taken together they won 111 House of Representatives seats against 123 for the PDP in 2011 and 39.8% of the presidential election support against Goodluck Jonathan’s 58.9%. Assuming they are able to create and maintain a cohesive identity e.g. by agreeing on a single presidential candidate, they could present a serious pan-Nigerian challenge to PDP hegemony. The CPC for example is particularly strong in the North, the ACN in South West. 

Observers will watch the remainder of the year closely. The constitution allows a state of emergency to last six months before lapsing or being renewed by the president. Of course, the president may terminate a state of emergency before the six months are up.


The law of unintended consequences, we have learnt, governs military adventure. In 2009, Boko Haram’s founder Mohammed Yusuf was killed and Nigerian security forces claimed responsibility. What followed was not a diminution in violence but an explosion. 

Given the heavy handedness of military action reported by Human Rights Watch and others, there is reason to worry whether the security forces can isolate Boko Haram’s most intransigent and violent members rather than punishing communities as a whole: a short-term tactical victory that fails in this aspect could damage peace and political stability long-term. 
As one security sector operative put it, “at what price peace?” Meaning how is peace to be achieved? Will it be via broad-based military action or through compromise? The latter may leave a bad taste in the mouth of those who have suffered at the hands of Boko Haram and its supporters but is a better servant of peace long-term.  

It is not trite to say that in challenges one may find opportunities. On the eve of its centenary, settling the question of how to bind Nigeria’s disparate parts to each other securely would leave the country on a sure footing from which to exploit the gargantuan opportunities about which investors at home and abroad are increasingly aware. 

Nana Ampofo, a Financial Nigeria Columnist, is a Partner in Songhai Advisory LLP, a bespoke business intelligence consultancy based in London and Accra, which focuses exclusively on sub Saharan African economies:

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