Babangida and Gusau – Nigerian political elite with high-stakes in oil smuggling

The country risk score for Nigeria on Exclusive Analysis’s Foresight Country Risk Platform is now 4.3, which is in the Severe Risk Band. Only the country risk scores for Somalia and Sudan are higher in the sub-Saharan African region.

President Jonathan’s April 2011 electoral victory and policy agenda has widened north-south divisions both nationally and within the ruling party, the People’s Democratic Party (PDP). Jonathan’s reformist policies, which included anti-corruption drives, the transformation of the excess crude account into a tightly ring-fenced sovereign wealth fund, the intensification of the privatisation of parastatals and the long-delayed oil reform, have compromised the economic interests of many influential leaders.

In January 2012, following the partial reinstatement of the fuel subsidy due to nationwide protests, Jonathan launched investigations into subsidy claims by oil marketers. Petroleum products agency PPPRA then announced that over $4 billion was paid out in subsidy claims to illegal petroleum importers in 2011. Numerous Nigerian politicians have highlighted that high-ranking northern peers, like General Ibrahim Babangida and former national security adviser General Aliyu Muhammed Gusau, both of whom ran against Jonathan for the 2011 PDP nomination, are involved in oil smuggling (bunkering). Babangida is a former junta leader who had originally awarded many of the fuel import contracts, and Gusau is a former intelligence chief reportedly associated with Vitol.

In the wake of the fuel subsidy protests, southern leaders claimed that such northern leaders were trying to sabotage Jonathan’s presidency with dual threats: an intensifying Boko Haram insurgency stoking sectarian division and the nationwide protests that disrupted businesses in major cities.

Northern politicians, both from the opposition and the PDP, will likely attemptto sideline  President Jonathan, possibly through impeachment, unless he makes concessions to them. Such concessions would include appointing members of the northern elite to top government and military positions, suspending anti-corruption drives (especially into oil smuggling), and offering an amnesty to moderate Boko Haram members and supporters (as done with Niger Deltan militants, MEND). They are also likely to seek the permanent reinstatement of the fuel subsidy, a guarantee that the 2015 PDP mandate goes to the north and revisions to legislation. These would include the Petroleum Industry Bill, the Sovereign Wealth Fund Bill and the privatisation of underperforming parastatals.

Boko Haram – Increasing Civil War Risks or Decreasing in Influence?

Boko Haram has increased the scale and sophistication of its attacks. It is also shifting its strategy from targeting security forces and government assets to inciting sectarian violence as a means to weaken the Nigerian state. On 25 December 2011, Boko Haram carried out attacks against churches in northern cities which left 48 people dead, while on 1 January 2012 it issued a three-day ultimatum for all southerners living in the north to leave the region.

If Boko Haram could mobilise pre-existing sectarian conflicts in the Middle Belt region, in particular the highly volatile Plateau area, this would present a credible escalation pathway to north-south civil war. Leaders of influential Christian organisations, such as the Christian Association of Nigeria, have called for the mobilisation of Christian self-defence groups and warned of retaliatory attacks against Muslims in the south if Boko Haram further incites sectarian violence in the north. Armed groups most likely to engage in such attacks would include former Niger Delta militants and other ethnic militias like the Oodua People’s Congress from Lagos and the Igbo separatist militia MASSOB.

However, it is important to note that Boko Haram is losing support from northern leaders and more generally due to high civilian and Muslim causalities that it causes.  On 1 February 2012, an alleged splinter faction called Ansaru emerged from Boko Haram. It expressed ideological differences with Boko Haram, mainly the group’s  targeting of Muslims and intent to escalate sectarian violence. Likely splits within Boko Haram and its lack of grassroots’ support limit the group’s ability to expand its area of operations outside of northern states such as Borno, Kaduna, Gombe, Kano and Bauchi. A reduction of support from its northern political backers would also mitigate the risk of an escalation into civil war. The likelihood of such a loss of support would increase if President Jonathan makes the aforementioned political concessions to northern elites.

Exclusive Analysis Ltd will be holding a web briefing on this topic on 28 February 2012. Head of Africa Forecasting Natznet Tesfay will deliver the briefing and will hold a Q&A session. To register for the briefing or to find out more, please contact Amanda Russo at arusso@exclusive-analysis.com.