Nigeria unions to resume strike after failed negotiations over fuel subsidies



LAGOS, NIGERIA // A nationwide strike in Nigeria over spiraling fuel prices will continue, two major unions said yesterday after negotiations with the government failed.

The statement from the Nigeria Labour Congress and the Trade Union Congress came as confusion remained over whether a threatened shutdown of oil production will occur in Africa's top oil exporter. A major oil workers union had promised to stop production at midnight Saturday in solidarity with the demonstrations, jeopardising the country's production of 2.4 million barrels of oil a day.

During negotiations on Saturday between the unions and government, organisers asked the government to restore an estimated US$8 billion (Dh29.3b) a year in fuel subsidies that keep gasoline prices low in Africa's most populous nation, the statement said. The government countered by promising to lower prices slightly, the unions said.

The talks broke down just before midnight, and the unions said that demonstrations against the government's decision would resume today.

President Goodluck Jonathan did not show up for a meeting with union representatives held at the presidential villa in Nigeria's capital Abuja, nor did Vice President Namadi Sambo. Instead, the nation's Senate president and its House speaker represented the government along with other officials.

It was unclear whether any additional negotiations between the government and the unions would be held yesterday.

The strike began January 9, paralysing the nation of more than 160 million people. The root cause remains gasoline prices: President Jonathan's government abandoned subsidies that kept gasoline prices low on January 1, causing prices to spike from 45 cents per litre to at least 94 cents per litre. The costs of food and transportation also largely doubled in a nation where most people live on less than $2 a day.

Anger over losing one of the few benefits average Nigerians see from living in an oil-rich country, as well as disgust over government corruption, led to demonstrations across this nation and violence that has killed at least 10 people. Red Cross volunteers have treated more than 600 people injured in protests since the strike began, the International Committee of the Red Cross said Friday.

The Petroleum and Natural Gas Senior Staff Association of Nigeria threatened Thursday to stop all oil production in Nigeria at midnight Saturday over the continued impasse in negotiations. The association said Thursday it had supported the strike in solidarity, but wanted to hold off until midnight Saturday to pull its workers from the fields over the financial damage that could be done by production shutting down.

Though the president of the Nigeria Labour Congress said the production shutdown would not take place late Saturday, oil workers' association president Babatunde Ogun and other union officials have been unavailable for comment.

The association's ability to enforce a shutdown across the swamps of Nigeria's southern delta to its massive offshore oilfields remains in question. Much of Nigeria's land-based oilfields remain largely automated and an increasing amount of production comes from large offshore oilfields far from the country's coasts.

But the threat of a strike caused jitters on global oil markets Friday. Even if strikers are only partially successful, fears of tightened global supplies could raise oil prices by $5 to $10 per barrel on futures markets next week. Gasoline prices would follow.

The Nigeria Labour Congress and the Trade Union Congress called for a brief hiatus on demonstrations this weekend, allowing Nigerians to leave their homes to stock up on gasoline, food and other supplies. However, the mood remains tense in a nation already uneasy over a wave of sectarian attacks by a radical Islamist sect that have killed at least 67 people since the start of the year, according to an Associated Press count.

The unions addressed that concern in their statement, saying: "We are ... not campaigning for 'regime change."'

"The labour movement is wedded to democracy, therefore, anybody or group that wants a change in the political leadership of the country at whatever level should do so through the ballot box," the groups said.

However, tension could be felt at an Armed Services Remembrance Ceremony held Sunday in Nigeria's capital Abuja. The programme, aired live on the state-run Nigerian Television Authority, showed a sombre Mr Jonathan attending. An announcer also tried to relax the crowd ahead of a 21-gun salute.

"Please, it is a part of the ceremony, don't panic," the announcer said.

The years Ramadan fell in May

1987

1954

1921

1888

RESULTS

6pm: Al Maktoum Challenge Round-2 – Group 1 (PA) $55,000 (Dirt) 1,900m
Winner: Rajeh, Antonio Fresu (jockey), Musabah Al Muhairi (trainer)

6.35pm: Oud Metha Stakes – Rated Conditions (TB) $60,000 (D) 1,200m
Winner: Get Back Goldie, William Buick, Doug O’Neill

7.10pm: Jumeirah Classic – Listed (TB) $150,000 (Turf) 1,600m
Winner: Sovereign Prince, James Doyle, Charlie Appleby

7.45pm: Firebreak Stakes – Group 3 (TB) $150,000 (D) 1,600m
Winner: Hypothetical, Mickael Barzalona, Salem bin Ghadayer

8.20pm: Al Maktoum Challenge Round-2 – Group 2 (TB) $350,000 (D) 1,900m
Winner: Hot Rod Charlie, William Buick, Doug O’Neill

8.55pm: Al Bastakiya Trial – Conditions (TB) $60,000 (D) 1,900m
Winner: Withering, Adrie de Vries, Fawzi Nass

9.30pm: Balanchine – Group 2 (TB) $180,000 (T) 1,800m
Winner: Creative Flair, William Buick, Charlie Appleby

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”