Suicide bomber kills six in Maiduguri, Nigeria

A suicide bomber who was stopped from entering a government compound killed at least six people, including two police officers, on Thursday in the northeastern Nigerian city of Maiduguri.

There was no immediate claim of responsibility for the attack but the Islamist extremist group Boko Haram was suspected. Maiduguri was the birthplace of Boko Haram and has been the scene of numerous attacks by the group’s fighters in the past seven years.

In recent weeks, the Nigerian military’s operations against the group had kept fighters out of the city center for the most part and residents had been starting to look ahead to a possible end of the long war with the militants.

But the attack Thursday, which also wounded more than a dozen people, shattered the city’s fragile sense of calm.

The bomber, who was riding a tricycle taxi, was stopped around noon outside a heavily guarded complex of government offices in the city center, officials said. He then set off his explosives, killing two police officers and at least four other people.

Tricycle taxis — yellow, motorized and covered — have replaced motorbikes, which the government banned in the city several years ago because Boko Haram was using them for drive-by shootings and suicide attacks.

The attack came a day after two separate bombings in the area, witnesses said. The first was at a mosque and killed only the bomber, but the second killed four people.

The Nigerian Army said in a statement that the situation in Maiduguri had “reinforced the need for more security consciousness and awareness on the part of all of us.”

“The remnants of the Boko Haram terrorists and their sympathizers still mingle with the society,” the statement said.

New York Times

Five reasons why Nigerian government ended fuel subsidies

Africa’s largest oil producer, Nigeria, had introduced fuel subsidies to keep prices at bay. But on Wednesday, President Buhari said his government would no longer be able to sustain the process.

DW spoke to professor Usman Mohammed Muntaqa of Ahmadu Bello University about what could have inspired Buhari's government to remove the contraversial fuel subsidy.

Corruption

Since the year started Nigeria has spent an excess of $5 billion (4.3 billion euros) on keeping fuel subsidies. The expert said the process of subsidizing the petroleum industry was corrupt and hugely inefficient. He claimed that it does not alleviate the sufferings of low income earners nor end fuel scarcity.

DW: Why did the government of Nigeria decide to remove the subsidies now?

Muntaqa : We were taken aback by the government's decision to remove the subsidy which we believe did not exist in the first place. Surcharge is what exists not subsidy. There is too much corruption in the Nigerian oil industry.

Drop in global oil price

With global crude oil prices dropping to unprecedented levels, the International Monetary Fund (IMF) advised the Nigerian government to remove subsidies. Nigeria is known for it's over dependence on oil revenue, but cannot sustain a continuous subsidy payment.

Why did Nigeria introduce subsidies in the first place?

Muntaqa: Nigeria started subsidizing its petroleum industry in the 1980's after the state-owned company, the Nigerian National Petroleum Corporation (NNPC), had planed to unify the price of crude oil in accordance with the global market. But then-incumbent president, Olusegun Obasanjo, said average Nigerians would not be able to afford a gallon of petrol at the pump. Instead, President Obasanjo introduced subsidy plan to keep the price of petrol low.

Diversion and smuggling

According to Ibe Kachikwu, deputy minister of petroleum, a large volume of petroleum products is diverted by corrupt senior government officials. Kachikwu said these officials connive with marketers and transport owners to divert already subsidized fuel from depots to neighboring West African countries including Cameroon, Chad, Togo and Benin.

What are the direct effects on Nigerians?

Muntaqa: Nigeria's economy relies heavily on oil. But low oil prices at the international market thrust a huge blow on government earnings and rating agencies downgraded the economy. President Muhammadu Buhari also had to slash his budget and reduce the country's growth's prospects.

The standard of living in the country also fell as a result, but instead of falling pump price as is in the case of the international market, Nigerians had to pay more for fuel. This has automatically led to an increase in prices of food commodities.

Competition in the oil industry

According to the Nigerian ministry of petroleum, removing fuel subsidies will lead to more players and competition in the oil industry.

How would this affect the Nigerian economy and the West Africa region?

Muntaqa: West African countries will also be affected because a lot of products exported to these countries from Nigeria will increase in prices.

Foreign exchange crisis

The Nigerian government determines how much foreign currencies private businesses receive to import fuel into Nigeria. There a few oil refineries in the country, but most of them are unable to meet domestic demand. Hence the country relies on fuel importers to fill the gap.

But due to less availability of foreign currencies in the Nigerian market, fuel importers have had to turn to local ‘black markets.' This means fuel importers have to spend more local currency, the Naira, on buying the dollar. Fuel importers hence have a major influence on the prices of fuel. So low fuel prices at the international market, does not automatically translate into low fuel prices in Nigeria.

Can Nigeria depend on its local refineries fully in the future?

Muntaqa: This government promised us that the refineries will get back to work but nothing has happened. We have the human resources to make these refineries work.

Secondly, the government said after removing subsidies, oil marketers will be allowed to source for foreign currencies from parallel markets, meaning the Naira will be under pressure because the demand for the dollar will increase and ultimately lead to a crash.

DW

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New militant group Niger Delta Avengers disrupting oil supply in Nigeria

Chevron shut down an offshore oil facility after "unidentified attackers" bombed it last week, causing an oil spill.

And a new militant group calling itself the Niger Delta Avengers has claimed responsibility for the attack, according to the WSJ.

Notably, this attack is not an isolated incident, but rather reflects the deteriorating political and security dynamics posing an immediate threat to Nigeria's oil output.

Since the government ordered an arrest warrant for members of the Movement for the Emancipation of the Niger Delta (MEND), including the ex-leader Government Ekpemupolo, the country has seen a spike in attacks this year, including one on the Forcados export pipeline operated by Shell. (The Avengers have taken credit for this attack, too, according to reports cited by Bank of America analysts.)

The Niger Delta Avengers reportedly want locals in the Niger Delta to have more control over the oil resources in the region, as well as higher living standards for those living there and the continuation of the Niger Delta amnesty program, according to Bank of America Merrill Lynch's Oyin Anubi.

(Although, Anubi cited local press reports noting that Ekpemupolo has tried to distance himself from the Niger Delta Avengers, who aren't part of the existing Niger Delta Amnesty program.)

The Avengers' agenda seems to parallel the situation back in the 2000s, when armed militant groups, including MEND, routinely kept hundreds of barrels of oil off the market.

At the time, MEND portrayed "itself as political organization that wants a greater share of Nigeria's oil revenues to go to the impoverished region that sits atop the oil," according to The Economist.

In 2009, the government signed an amnesty agreement pledging to provide monthly cash payments and vocational training programs to the nearly 30,000 former militants in exchange for cooperation.

But although the arrangement was a pretty good band-aid, it failed to address the fundamental drivers of instability in the region, such as poverty, corruption, and the proliferation of weapons.

Moreover, Nigeria's current economic slump adds more pressure to the situation, and the current administration under Muhammadu Buhari has vowed to reduce corruption and excessive government spending.

Notably, the recent attacks have taken a toll on oil output in Nigeria. According to data cited by Anubi, oil production is now down to mid-1990s lows, with unplanned supply outages ranging from 200,000 to 300,000 b/d.

And although the country has previously delt with similar threats, Anubi argues that there are three major reasons to be more concerned now than in previous years:
The large-scale attack on an offshore facility — as opposed to an onshore one — shows that the scale of militancy has increased.

The regulation of Nigeria's oil sector remains a bit unclear as a new bill is intended to split the national oil company into two parts.
The current Nigerian government under Buhari, which aims to reduce corruption and excess expenses in the lower oil environment, is "incompatible with spending large sums of money to appease Niger Delta militants," writes Anubi.

In short, as RBC Capital Markets' Helima Croft noted back in late March, "the government appears to be on course for a head on collision with armed militants in the oil region."

Business Insider