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Bismarck Rewane: Government Failure Has Led Niger Deltans to Seek Self-Compensation

Economist Bismarck Rewane, MD and CEO of Financial Derivatives Company Limited, has shared his expertise on Nigeria’s macroeconomic issues, including the naira’s value, inflation, interest rates, and oil theft.

“Our view is that the naira is misaligned from its fair value… due to a combination of structural and transitory factors,” Rewane said.

He attributed the disparity to inflation and interest rate differentials between Nigeria and the US.

“If you look at that, there is a negative carry as far as Nigeria is concerned. But in fairness, when we looked at the PPP value of the naira, it comes in at about almost N970; therefore, the whole PPP value is N970, but it’s trading at N1600.”

Rewane noted that the central bank’s recent increase in interest rates and adjustments have made the naira more expensive, but government spending has also contributed to liquidity saturation in the market.

 “The Central Bank of Nigeria has truly increased rates and also adjusted their product, making naira more expensive,” he said.

On oil theft, Rewane emphasised that it’s not a new problem and that the government needs to address the root causes, including poverty and lack of development in the Niger Delta region.

“The reality is that because of the failure of various governments to improve the quality of life of Nigerians from the Niger Delta, the people take the law into their own hands… It’s a fundamental failure of government at all levels,” he said.

He said, ‘President Tinubu’s mandate has always been there; there was never a mandate to allow oil to be stolen. It has always been to make sure there is security in that area.’

“A lot of people talk as if Nigeria just started last week, but the reality is that oil theft cannot be the main role of the oil industry.

“It would be a fringe activity of 10 to 20 thousand barrels, but when you say oil theft is taking 400,000 barrels when Nigeria is producing 1.3 million, then it means the meal has become the fringe and vice versa.

“So, if people are now having to do the job for which they’ve been paid and call it a new mandate, that could be disingenuous,” he said.

He continued, ‘The reality is that because of the failure of various governments – federal, state, local government – to improve the quality of life of Nigerians from the Niger Delta, the people take the law into their own hands and try to compensate themselves, which is a fundamental failure of government at all levels, including the oil company, to actually improve the quality of life and welfare of the citizens.

“The part of the country that produces oil is the most backward area in the country; therefore, morally, equitably, the people there have a right to be angry and to do whatever it takes to compensate themselves for the loss of revenue and the loss of confidence.

“It is the ability of the government to protect them from the deterioration in their quality of life. So, once you understand that, then we get to a point of what do we do about it.

“We need to ensure that the people who have been charged with the ability of protecting them should not be the ones stealing the oil.

“There is no way that level of oil theft can take place without the complicity of the people that are there,” he said.

Rewane expressed skepticism about the government’s ability to address these issues, stating, “I’m not going to be carried away by those statements… It needs to be a genuine attempt to do things differently.”

In response to the second outlook for the year, he said, “I assume that the protests would fade out, the government has to meet some of the aspirations of what the people are asking genuinely, people are really suffering, and therefore, we have to be genuine about how we deal with that.

“If there is a cost of living crisis, it is the responsibility of the government to accommodate and do it aggressively in a way that people can feel it,” he concluded.

Boluwatife Enome

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