Thread by @sbmintelligence

The needle shifted a little further into the red zone with concerns over an expanded security vote chest, an import rate hike bound to affect fuel prices, talk of water colonies, and the CBN’s continued fixation on forex.

The glue that holds up the inefficient political system in #Nigeria, and skews it against both the will of the people and a level playing field for better candidates to emerge, is the existence of slush funds that warp campaign funding.

Security votes rank high up in upholding this system.

When the existence of the security votes is taken along with the abysmal security situation across the country, the irony is not lost on observers.

Until black funds like these are unavailable to the state governors and @AsoRock, not much progress will be made in reforming our political system.

The proposed bill on water resources, the latest front in the raging debate over the appropriate amount of federalism and devolution necessary for #Nigeria’s development, is not only causing a rift between federal lawmakers,

it appears to be splitting states along what appears to be regional lines.

#Rivers, in the South for example, says that “states have conceded so much in #Nigeria, particularly those in #NigerDelta.”

#Ekiti, also in the South, has called the bill “a subterfuge to achieving another version of the failed cattle colony” and an effort in “recolonising the states for the benefits of the few.”

#Bauchi, in the North, is not only in support, it plans to create a regulatory unit.

Others such as #Kwara (Middle Belt) and #Osun (South) declined to state their official positions.

PANDEF, the group of #NigerDelta elders, on its part, said the bill was provocative.

As more southern states continue to weigh in on this issue and northern lawmakers and states double down, expect the political rhetoric to sharpen and legal challenges to be prepared – land and natural resources are nominally vested in state governors via the 1978 Land Use Act.

is large and increasingly unwieldy, yet still possesses the appetite to expand its responsibilities even more.

Most states will double down in order to protect their legal turf.

In the inevitable clash of interests, ordinary Nigerians will profit little.

While the price pressures brought by rising crude oil prices will arrive at our shores, @AsoRock is unlikely to allow prices rise in a season of electioneering, especially the price of petrol.

Hence we expect the subsidy bill currently borne via @NNPCgroup back-channels to rise dramatically, with further pressure on exchange rate to rise upwards.

Balancing the price of petrol and the exchange rate will lead to policy decisions which will be short term expedient, but damaging in the long term.

When @AsoRock finally has no choice but to pass the price increases to Nigerians in one go, the impact will be swift and heavy.

Recent happenings in the global markets are clearly spooking Mr. Emefiele who has made it clear that his primary goal is price stability.

Internationally, the US dollar has been strengthening due to many factors – political turmoil in #Italy and other @EU_Commission countries;

easing trade animosities between #America and #China; the American withdrawal from the multilateral nuclear pact with #Iran and continued #Brexit talks.

On the local scene, an exit of foreign portfolio investors and the approaching summer holiday break and minor Hajj are pushing the demand for dollars.

These factors and more have forced @cenbank to act in order to minimise exchange rate fluctuations.

As for BDC operators, they see @cenbank’s increased FX sales from $40k per week to $60k per week as insufficient, while loosening the requirements for banks to sell FX to customers over the counter as hostile to their survival.

The overall outlook is not pretty.