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The relative peace that has been enjoyed in the Niger Delta, may soon be a thing of the past if the words of the Niger Delta Avengers (NDA) are anything to go by. In a statement released on their website, the militant group announced the suspension of a ceasefire that had been in place since 2016.  The militants also issued a disclaimer regarding a group called the Reformed Niger Delta Avengers (RNDA) calling them disgruntled elements allegedly being sponsored by officials of the Buhari administration.

Why the militants took the action

Spokesman for the militants, Major General  Murdoch Agbinibo blamed the resumption on the inability of talks anchored by Niger Delta elders under the aegis of Pan Niger Delta Elders Forum (PANDEF) and ex militant Government Ekpemupulo alias Tompolo to yield benefits.

The real reasons behind the action

The militants may have been influenced by news of the recent rebound in oil prices to about $60 a barrel in the international market. Forthcoming elections and the fragile security in several parts of the country, may also influence the government to find a means of nipping any potential unrest in the bud.

Implications of a resumption in militant activities

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Revenue from crude oil, could take a hit if the militants make do their word to resume attacks on oil installations. Oil revenue has recovered from an all time low due to a drop in global prices and militant attacks. The Trans Forcados pipeline, which is Nigeria’s major export route has been shut down due to the repair works after militant attacks, just resumed operations this year.

The country’s exchange rate which has been relatively stable, could also be affected as crude oil revenue is the major source of much needed foreign exchange. The drop in crude oil earnings last year lead to the Central Bank of Nigeria (CBN) managing foreign exchange supply and placing several items on a banned list. The apex bank has since relaxed those controls.

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A militant attack could also push the economy back into recession, as was witnessed last year. The country recently recovered from its first recession in almost 30 years, due to a rebound in oil prices and production volumes.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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