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Nigeria’s Q1 GDP numbers show poverty still on the rise

There were no surprises in the latest GDP numbers for Nigeria published by the National Bureau of Statistics (NBS) on Sunday.

Africa’s largest economy expanded at a tepid 0.51 percent in the first quarter of 2021, a rate too slow to reduce rising poverty or address the country’s record unemployment rate (33.3 percent as of the end of 2020) the highest globally after Namibia.

Growth in the three months ending March 2021 was slower than the 1.87percent growth recorded in the corresponding quarter of 2020 but higher than 0.11percent recorded in the previous quarter (Q4 2020).

The economy may take another year to return to its pre-pandemic levels, according to the IMF’s estimates.

But even when it does, it will still be too slow to create opportunities for a population expanding at an annual rate of 2.6 percent. The economy has not grown above 2.5 percent since 2015.

Nigeria’s poverty rate has been rapidly rising so much so that in 2018 it overtook that of India to become the highest globally despite having only a fifth of India’s population, according to a report by Brookings Institution which said 87 million Nigerians lived below $1.90 a day.

Without reforms, Nigeria’s economy will continue to struggle, according to a motley crew of economic advisers to the President whose pieces of advice have gone largely unheeded since they were first assembled in 2019.

While the economy may have turned the corner since slipping into a recession last year, the oil sector is recovering but not yet out of the woods.

Oil GDP contracted by 2.21 per cent in Q1 compared to a contraction of 19.76 per cent in Q4 2020 and growth of 5.06 per cent in Q1 2020.
Non-oil GDP grew 0.79 per cent in Q1 compared to 1.69 per cent in Q4.

Optimism Over Reopening Economy Boosts US Stocks

Wall Street stocks were mostly higher early Tuesday, adding to the prior session’s momentum as optimism over the reopening economy offset concerns about inflation.

Analysts pointed to a pullback in the yield on the 10-year US Treasury note as an indicator that inflation worries may be ebbing. Anxiety that a jump in inflation could spark a sudden shift in Federal Reserve policy has weighed on the market in recent weeks.

Briefing.com analyst Patrick O’Hare characterized the sentiment as a “tentative calm,” adding that “we’re still at base camp for a few more months, where high inflation prints can be rationalized on the basis of low base effects.”

About 20 minutes into trading, the Dow Jones Industrial Average was flat at 34,382.21.

The broad-based S&P 500 added 0.1 percent at 4,201.12, while the tech-rich Nasdaq Composite Index gained 0.4 percent t to 13,714.38.

Among individual companies, Moderna rose 4.2 percent after the drugmaker said trials had shown its Covid-19 vaccine is “highly effective” in adolescents aged 12-17, and the company would seek regulators’ approval in June.

Lordstown Motors tumbled 14.4 percent as the electric truck startup warned it would need to raise additional capital to meet its production targets.

Manufacturers say positive GDP growth masks sector’s true health

Manufacturers are saying the growth recorded by the sector in the first quarter of 2021 is not reflective of the obstacles in their path.

After three consecutive quarters of contraction in 2020, the sector expanded by 3.4 percent in the first quarter, according to data by the National Bureau of Statistics (NBS).

Analysts say after the disruption occasioned by the COVIDe -19 pandemic, activities in the sector have dragged significantly due to challenges around rising production cost, supply cuts and foreign exchange shortages.

Segun Ajayi-Kadir, DG, Manufacturers Association of Nigeria (MAN) noted that even though the sector’s positive GDP performance was indicative of a rebound from the lows of the pandemic, it still did not fully capture current realities in the sector.

Similarly, Muda Yusuf, director-general, Lagos Chamber of Commerce & Industry (LCCI) said the sector is still struggling to fully recover from the shocks of the pandemic. Yusuf said most foreign exchange dependent manufacturers have been hammered by FX shortages and exchange rate depreciation in the economy.

The FX volatility in Nigeria has been a nightmare for manufacturers. The naira was devalued twice in 2020 alone due to the dip in oil income which made foreign exchange scarce.

Foreign exchange shortages have been an ongoing challenge in Nigeria and led to the death of 54 manufacturing firms in 2016 alone. Many more have followed since then with manufacturers saying they get two to 10 percent of their dollar needs from the market even after waiting for 30-90 days.

This was affirmed by 82 percent of business managers in the Manufacturers CEOs Confidence Index (MCCI) for Q4’20 who complained that the rate at which FX is sourced and accessed has not improved adding that the unavailability of FX has negatively impacted the sector’s performance.

Experts are of the opinion that if issues around FX availability and accessibility are not addressed promptly, many of these companies will fold up which will consequently collapse the sector and affect job creation.

Furthermore, the COVID-19 pandemic emanated from China, the world’s manufacturing powerhouse and Nigeria’s largest trading partner especially for manufacturing inputs, this caused an abrupt stop in the supply of raw materials, goods, tools, and machinery for manufacturing companies which forced many of them to suspend business operations.

The cut in global supply forced manufacturers to source for inputs locally however this also posed a struggle on the back of rising insecurity which caused scarcity of raw materials.

With eye on fragile economic recovery, CBN holds benchmark interest rate at 11.5%

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The Central Bank of Nigeria (CBN) on Tuesday retained its benchmark interest rate at 11.5 percent after the two-day Monetary Policy Committee (MPC) meeting in Abuja due to slow economic recovery.

Analysts in the financial services sector had expected a hold following persistent uptick in inflation rate and weak growth.

Nigeria’s inflation declined to 18.12 percent in April 2021 from 18.17 percent in March 2021, according to data from the National Bureau of Statistics (NBS).

Real GDP grew by 0.51 percent in the first quarter of 2021 from 0.11 per cent in Q4 2020, according to data from the National Bureau of Statistics (NBS).

In the fourth quarter of 2020, Nigerian economy sluggishly recovered from recession it slipped into in the second quarter (Q2) 2020 – after output contracted for the second consecutive quarters.

By vote of 10 Members of the committee the CBN also retained the Cash Reserve Ratio (CRR) at 27.5 percent, Liquidity Ratio at 30 percent as well as the Asymmetric Corridor around the MPR at +100/-700 basis points.

Razia Khan, managing director, Chief Economist, Africa and Middle East Global Research, Standard Chartered Bank, had said, “Still-high inflation and what could emerge as tentative FX market reforms will likely keep the CBN on hold at the May meeting.”

Given the fact that the rise in inflation has been due to cost-push factors rather than demand pull factors, Godwin Emefiele, governor of the CBN said the Monetary Policy Committee has placed greater weight on utilizing tools that would strengthen the nation’s productive base as a nation.

Mali in turmoil as strongman ousts transitional leaders

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Political turmoil in Mali deepened Tuesday as the country’s strongman pushed out transitional leaders who had been tasked with steering the return to civilian rule after a coup last August.

Assimi Goita, who headed a junta which seized power less than 10 months ago, said that President Bah Ndaw and Prime Minister Moctar Ouane had been stripped of their powers, and he promised elections in 2022.

The announcement marks the latest crisis to hit the vast, impoverished West African country, which is already struggling with a brutal jihadist insurgency.

Ndaw and Ouane have been heading an interim government that was installed in September under the threat of regional sanctions, with the declared aim of restoring full civilian rule within 18 months.

In a move that sparked widespread diplomatic anger, the pair were detained on Monday by army officers who were disgruntled by a government reshuffle, two senior officials told AFP.

In a statement read on public television, Goita said Ndaw and Ouane had been stripped of their duties for seeking to “sabotage” the transition, which would “proceed as normally.”

“The scheduled elections will be held in 2022,” he said.

Former colonial power France condemned what it called a “coup”, with Foreign Minister Jean-Yves Le Drian demanding the release of the president and prime minister.

Monday’s government reshuffle, designed to respond to growing criticism of the interim government, saw the military keep the strategic portfolios it controlled during the previous administration.

But two other coup leaders — ex-defence minister Sadio Camara and ex-security minister Colonel Modibo Kone — were replaced.

Colonel Goita, who holds the rank of vice president in the transitional government, accused Ndaw and Ouane of failing to consult him on the reshuffle.

“This kind of step testifies to the clear desire of the transitional president and prime minister to seek to breach the transitional charter,” he said, describing this as a “demonstrable intent to sabotage the transition”.

The transitional charter, a document largely drawn up by the colonels, sets down principles for underpinning Mali’s return to civilian rule.

The detention of Ndaw and Ouane sparked international condemnation, which included a rare joint statement by the United Nations, African Union (AU), Economic Community of West African States (ECOWAS), the European Union and the United States.

UN Secretary-General Antonio Guterres tweeted a call for calm, and urged the leaders’ “unconditional release”.

AU head Felix Tshisekedi, who is also the president of the Democratic Republic of the Congo, echoed the call, saying he “strongly condemned any action that aims to destabilise Mali”.

  • Brewing crisis –

Young military officers ousted the then president, Ibrahim Boubacar Keita, on August 18 after weeks of mass demonstrations over perceived government corruption and his handling of the jihadist insurgency.

ECOWAS, a 15-nation regional bloc, threatened sanctions, prompting the junta to hand power to a caretaker government that pledged to reform the constitution.

Goita was appointed as vice president of the caretaker administration, and the president, Ndaw, is a retired army officer.

But many have doubted whether the military-dominated government had the will — or the ability — to stage reforms on a short timescale.

Among other problems, the nation faces a major logistical and security challenge as swathes of territory are in the hands of jihadists.

  • Public discontent –

Monday’s reshuffle came amid signs of growing public discontent.

The opposition M5 movement — which spearheaded protests against Keita in 2020 — urged dissolving the interim government and demanded a “more legitimate” body.

On May 14, the government said it would appoint a new “broad-based” cabinet.

In the streets of Bamako, life seemed to continue as normal despite the ouster of Ndaw and Ouane, and many people interviewed by AFP said they were resigned to events.

“There was what happened in August and now we have this, but in real terms, it’s none of our business,” said Fatou Diakite, a doughnut seller wearing a purple head dress. “If I stop working, how do I live?”

Toumani Tangara, a 67-year-old former artilleryman, said “the military’s job is to fight. Let them go to the front, let them free (the north of the country) which is in the hands of terrorists! The rest is nonsense.”

Tahirou Bah, a civil society activist, attacked “putschist colonels…. (who) fight to the death for power” at a time when “80 percent of our country is under the control of terrorists, drug traffickers and bandits of every kind.”

But, he said, many people simply focussed on day-to-day living — “This is survival for many Malians.”

Tigrayan peacekeepers seek Sudan asylum, fear Ethiopia return

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Peacekeepers formerly posted to Darfur and hailing from Ethiopia’s conflict-hit Tigray region are requesting asylum in Sudan for fear of “torture” and “ethnic cleansing” back home, they have told correspondents.

The personnel were due to be repatriated in line with a withdrawal from Sudan of the joint United Nations-African Union mission in Darfur(UNAMID), after its mandate ended on December 31.

But the UN said earlier this month around 120 former peacekeepers had sought “international protection”.

AFP spoke to several of these Tigrayan peacekeepers at Um Gargour camp in eastern Sudan, where they have found interim sanctuary.

Halka Haqous, 47, a commander of the group that requested asylum, said he did not want to be repatriated “because of discrimination and ethnic cleansing in Tigray” region in northern Ethiopia.

He blamed Ethiopia’s government for the conflict, which erupted in early November, when the country’s Prime Minister Abiy Ahmed sent troops to detain and disarm leaders of the regional ruling party, the Tigray People’s Liberation Front (TPLF).

Abiy, winner of the 2019 Nobel Peace Prize, said the move came in response to TPLF attacks on federal army camps.

While he vowed the conflict would be brief, fighting continues and world leaders are warning of humanitarian catastrophe.

Hundreds of thousands of people have been displaced from their homes and over 60,000 fled into Sudan.

Rights groups have repeatedly alleged that Eritrean troops, operating in support of federal Ethiopian forces in Tigray, have perpetrated atrocities against civilians.

“All of the families from Tigray have been displaced,” said 40-year-old officer Arqawi Mahari.

“I don’t know where my father and mother are. A lot of rapes and other horrible crimes have been committed.”

“We are ethnic Tigrayans, that’s why they (Ethiopian troops) were oppressing us and telling us we were working for the TPLF,” Ferwini, 29, a peacekeeper who provided her first name only, told AFP.

“If I go back to Ethiopia they would kill me or torture me – that’s why I’ve asked for asylum in Sudan,” she added.

An Ethiopian military spokesman could not immediately be reached for comment Tuesday.

Abiy’s government has said it is committed to investigating allegations of atrocities in Tigray, and has denied claims it is discriminating against Tigrayans.

Sudan meanwhile is locked in disputes with Addis Ababa over a contentious border zone, and Ethiopia’s construction of a massive hydro-electric project on the Blue Nile.

Downstream Sudan and Egypt see the dam as a major threat to their water supply.

Nigeria urges international support for Chad transition

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Nigerian President Muhammadu Buhari on Tuesday called on the international community to support a peaceful transition in Chad after the sudden death last month of longtime leader Idriss Deby Itno.

Deby’s death has raised serious concerns about stability in Chad, whose army has also played a key role in battling jihadists in the Sahel and the fragile Lake Chad region.

Chadian forces were instrumental in helping Nigerian troops drive Boko Haram from areas in the northeast in 2015 and have acted as a buffer along the border between the countries where jihadist groups are active.

Chad’s new junta, headed by Deby’s four-star general son Mahamat, has appointed a transitional civilian government and promised to hold elections within 18 months.

“The need to support the Chadian government to effectively carry out its planned 18-month transition is sacrosanct,” Buhari said after a meeting with African leaders in Abuja.

“The sanctity of the Chadian constitution as the supreme guiding document defining the social contract in the country must be respected.”

The Nigerian leader urged development partners and countries including France, the United States and Britain, as well as the UN and European Union, to support the transition.

Deby died, according to the Chadian authorities, on April 19 after suffering fatal wounds fighting the Front for Change and Concord in Chad (FACT), a large armed group with a rear base in Libya.

Under Deby’s rule, Chad, with one of the most well-resourced militaries in West Africa, contributed to regional efforts to defeat Boko Haram jihadists and a breakaway faction, the Islamic State in the West African Province (ISWAP).

Mali strongman Assimi Goita says elections will take place in 2022

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As many as 2,500 homes were destroyed after the Nyiragongo volcano erupted in eastern DR Congo last weekend, according to an estimate by humanitarian groups Tuesday.

Molten lava destroyed between 900 and 2,500 dwellings, said Raphael Tenaud, deputy head of an International Committee of the Red Cross (ICRC) delegation, adding that this meant at least 5,000 people were now homeless.

Volcano aftershocks rattle DR Congo city as death toll rises

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Mali strongman Assimi Goita on Tuesday forced out two transitional leaders who had been appointed following a coup last August, and promised that elections would be held next year.

In a statement read on public television, Goita said President Bah Ndaw and Prime Minister Moctar Ouane had been stripped of their duties for seeking to “sabotage” the transition, which would “proceed as normally, and the scheduled elections will be held in 2022.”

Army officers upset with a government reshuffle have detained the pair, who were appointed in September under international pressure with the task of steering Mali back to full civilian rule within 18 months.

Mali strongman sacks transition leaders, vows elections ‘in 2022’

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Mali strongman Assimi Goita on Tuesday forced out two transitional leaders who had been appointed following a coup last August, and promised that elections would be held next year.

In a statement read on public television, Goita said President Bah Ndaw and Prime Minister Moctar Ouane had been stripped of their duties for seeking to “sabotage” the transition, which would “proceed as normally, and the scheduled elections will be held in 2022.”

Army officers upset with a government reshuffle have detained the pair, who were appointed in September under international pressure with the task of steering Mali back to full civilian rule within 18 months.