Tumbling oil prices have been a gift to some but they’ve blown a huge hole in Nigeria’s balance sheet which some fear may set the once promising African economy into a tail spin.
What could be worse than finding you have a trillion dollar budget gap and an insurgent group that threatens to hit whatever oil wells remain?
Last week Nigeria startled the finance markets by announcing plans to ask the World Bank and the African Development Bank for a $3.5 billion loan.
CNN Money bluntly headlined the story “Nigeria is running out of cash.”
Nigeria’s finance minister, Kemi Adeosun, denied the loans were an “emergency” measure, but merely the cheapest way possible to fund the deficit. “It’s my strategy for borrowing for capital projects,” she coyly told the Financial Times.
But the undeniable fact is that since 90 percent of Nigeria’s export revenue comes from the sale of petroleum, according to OPEC, and oil prices have fallen about 70% in the last year and a half, she has to make haste to plug the record budget gap of 3 trillion naira.
President Muhammadu Buhari will face lawmakers in Nigeria’s parliament this week with his proposed 6.08 trillion naira “budget of change” – the country’s largest ever – that aims to stimulate the economy by spending on long-overdue infrastructure projects. But at least one interest group – the Nigerian Medical Association – is already crying foul over a large cut to the health ministry.
Authorities will begin roadshow meetings with investors to sound out a potential sale of $1 billion of Eurobonds in February, Adeosun said. But these carry a heavy interest price tag.
The price of these bank loans is unpleasant to contemplate. They include devaluing the naira and loosening capital controls. Recently, President Buhari made his views known on that program, saying that devaluing the naira was not in the best interests of Nigerians, particularly the poorest citizens.
Meanwhile, Angola, another major oil producer, is seeing hunger in the population as a consequence of shrinking revenues due to the oil price crash. “We can confirm that the level of acute malnutrition across Angola warrants a high impact emergency response,” said the World Vision development agency. Supplies of essential medicines have been disrupted, and in-patient nutrition centers are unable to provide the required level of service,” the group said.
In 2014, oil prices were around $100 per barrel. Currently they are at about $23 per barrel.
Yet another consequence of the low per barrel price has been the rise in big car purchases. The oil plunge is fueling a boom in SUV sales in China – up 60 percent year-on-year in the last three months, while overall passenger vehicle sales are growing robustly at 22 percent.
And after years of stagnation, vehicle miles traveled in the U.S. also ticked higher in 2015. w/pix of Minister K. Adeosun
SILENT AIDS CRISIS IN KENYA STILL TAKING LIVES
Africa appears to be registering lower AIDS infection rates around the continent but with some exceptions. This week, a pediatric study found 19,000 children in Homa Bay county, Kenya, are infected with HIV.
While HIV is rarely a page one story these days, the virus is particularly rampant in Kenya where one in every four people in the county of Homa Bay, bordering Lake Victoria, lives with HIV. The area contributes the highest number of new infections in the country, recording 15,000 new HIV infections in 2013 alone, according to the Kenya HIV Prevention Revolution Road Map 2014.
“The rate at which HIV is spreading in this county is worrying and the high infection rate among children is a big threat for the country’s future generation,” said Eliud Mwangi, national director of the Washington DC-based Elizabeth Glaser Pediatric AIDS Foundation.
Local governor Cyprian Awiti called for a special fund for fighting the virus. The current 4 million shillings available in the current fiscal year, he said, is inadequate for the fight against the disease.
According to several health studies, local women traders who sell fish are the largest group of victims of HIV infection. They become sick when they’re forced to have unprotected sex in order to obtain a regular supply of fish to vend.
“I used to wonder why some of us got more supply from the fishermen compared to others who got little supply of fish,” Rhoda Atieno told the Kenyan Star in an interview. “Later I came to realize that there is something locally known as “jaboya” that the fishermen and fishmongers were involved in.”
This year, an international charity from Turkey came to the aid of the trading women by donating ten fishing boats to ten women’s groups so that they can catch their own fish and break their dependence on “fish for sex.”
The country government has also bought boats for some of the women’s groups. But Esther Soti, head of a health NGO, says more needs to be done to stop Jaboya.
“Fishermen and women need health clinics where they can get medication. They need access to ARV drugs.”
Kenya has the fourth-largest HIV epidemic in the world with 1.6 million people living with HIV in 2013.
GUSHING PIPELINES BOMBED BY MILITANTS FOUL WATER, FARMS AND FISHING GROUNDS
Oil is spewing unchecked into delicate ecological systems in southern Bayelsa state, Nigeria, after multiple bombings by militants in the area.
Community leader Eke-Spiff Erempagamo told AP news that the spill was “massive—the biggest in years.” Fishermen said oil had flowed unchecked for two days.
A spokesman for the Nigeria Agip Oil Company estimated a loss of 16,000 barrels a day, totaling at least 48,000 lost barrels of oil.
Attacks against the region’s oil and gas facilities had been a signature feature of the Movement for the Emancipation of the Niger Delta (MEND) until a negotiated settlement in 2009. Rebels handed in their weapons in exchange for unconditional pardons, education and vocational training.
But with the victory of Muhammadu Buhari as president, these programs were threatened with cancellation. Mr. Buhari recently agreed to extend the program for another year but attacks on the pipelines have returned with new vigor.
Elsewhere in Nigeria, Boko Haram militants reportedly firebombed huts in the village of Dalori, some seven miles from the northern city of Maiduguri, the biggest city in Nigeria’s north-east.
Some 86 people are said to have died in the attack including children.
Meanwhile, the reinstatement of a Nigerian general accused of war crimes in the fight against Boko Haram has drawn condemnation from Amnesty International.
According to an Amnesty investigation, Maj. Gen. Ahmadu Mohammed was I command of operations when the military executive more than 640 detainees following a Boko Haram attack on the detention center in Giwa barracks in March 2014.
It is unthinkable” to recall the officer who was sacked in 2014 before an inquiry had even begun,” the human rights group said.
But military spokesman Gen. Rabe Abubakar dismissed the Amnesty findings. “These are just allegations – until proven, no-one should be punished unnecessarily,” he said.
The London-based group said since March 2011, more than 8,000 young men and boys have been either shot, starved, suffocated or tortured to death in military custody and no-one has been held responsible.
President Muhammad Buhari promised to look into the issue when he came to power last year.
AFRICA’S NONSTOP SUN NOW POWERS A SOLAR BUS
The Ugandan manufacturers of a solar-powered bus are showing off their creation at a stadium in Kampala. A 35-seater, it uses two batteries and the direct rays of an equatorial sun.
Solar panels attached to the roof power the 35-seater. Hopefully, partners will be found to help manufacture the bus for the mass market.
The brainchild of Kiira Motors Corporation (KMC) of Uganda, the bus was dubbed ‘Kayoola’ -loosely translated as ‘mass carrier’.
Mr Isaa Musasizi, the chief executive officer of KMC, told journalists during the test drive at Namboole stadium on Sunday that Kayoola was built at a cost of 500 million Ugandan shillings.
The solar panels yield energy to run the bus on a range of 80kms about 8 hours of uninterrupted drive.
“Uganda is privileged to be among the 13 countries in the whole world that are situated along the equator. We decided to take advantage of this strategic position to improve transport technology,” Mr Musasizi said.
Most features on the bus are locally sourced and were brought together by a team of about 100 Ugandans who did the wielding, spraying, and wiring, among others.
Prof Sandy Stevens Tickodri, the Minister of Higher Education Science and Technology, said Kayoola could go a long way in addressing Uganda’s mass conveyance problem.
“We have buses all over the world but Ugandans must be proud to be championing a technology that represents clean energy,” said Prof Tickdori who launched the idea of manufacturing Uganda’s first electronic car Kiira EV while still a don at Makerere University.
The Kayoola bus will be officially launched at the Kampala Serena Hotel on Feb. 16. Pres. Yoweri Museveni will be in attendance.
