Wednesday, 31 August 2016

Nigerian economy slips into recession

BBC

Nigerian economy slips into recession

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Media captionNigeria in recession: How the country got here

Nigeria has slipped into recession, with the latest growth figures showing the economy contracted 2.06% between April and June.

The country has now seen two consecutive quarters of declining growth, the usual definition of recession.

Its vital oil industry has been hit by weaker global prices, according to the Nigerian Bureau of Statistics (NBS).

But the government says there has been strong growth in other sectors.

Crude oil sales account for 70% of government income.

The price of oil has fallen from highs of about $112 a barrel in 2014 to below $50 at the moment.

Outside the oil industry, the figures show the fall in the Nigerian currency, the naira, has hurt the economy. It was allowed to float freely in June to help kick-start the economy, but critics argued it should have been done earlier.

a money changer counts Nigerian Naira currency — Image captionNigeria is facing high import prices following the devaluation of the currency, the naira

The government, however, has found some positive news in the figures.

"There was growth in the agricultural and solid minerals sectors... the areas in which the federal government has placed particular priority," said presidential economic adviser Adeyemi Dipeolu.

Nigeria, which vies with South Africa for the mantle of Africa's biggest economy, is also battling an inflation rate at an 11-year high of 17.1% in July.

"A lot of Nigeria's current predicament could have been avoided," said Kevin Daly from Aberdeen Asset Management.

"The country is so reliant on oil precisely because its leaders haven't diversified the economy.

"More recently, they have tried, and failed, to prop up the naira, which has had a ruinous effect on the country's foreign exchange reserves and any reputation it might have had of being fiscally responsible."

Analysis: Martin Patience, BBC Nigeria correspondent

This economic recession comes as no surprise to millions of Nigerians. Many say they've never known it so tough.

The slump in global oil prices has hit Nigeria hard. The government depends on oil sales for about 70% of its revenues.

But critics say government policies made a bad situation even worse. The decision to delay devaluing Nigeria's currency meant many businesses struggled to get foreign currency to pay for imports, which had a cooling effect on the entire economy.

Following enormous pressure, the government changed tack this summer, allowing the naira to float.

That's led to a spike in inflation, but the hope is that it will attract foreign investors. The government also says the country needs to import less: it wants to see more products made in Nigeria.

Factfile: NSO

Founded in 2010 and has had several different names
Based in Herzliya, Israel, and owned by US investment firm Francisco Partners
Could be worth $1bn

Security-savvy human rights lawyer Ahmed Mansoor found himself targeted by the attack when his iPhone received a message promising "secrets" about torture happening in prisons in the United Arab Emirates.

Had he tapped on the link, the phone would have been plundered. Huge amounts of private data: text messages, photos, emails, location data, even what’s being picked up by the device’s microphone and camera.

Thankfully, he didn't do that. Instead, he passed on the message to experts at Citizen Lab and Lookout, who peeled back the covers on what they described as one of the sophisticated cyber weapons ever discovered. With it came evidence that it was the NSO Group’s expertise at the heart of it all.

Big money deals

Earlier this year, UK-based watchdog Privacy International launched a database tracking the global trade of cyber arms. Its intention was to track deals between cyber arms companies and governments.

According to the Surveillance Industry Index (SII), the NSO Group was founded in 2010 and is based in Herzliya, an attractive city north of Tel Aviv that is known as being a cluster of tech start-ups. The group was likely funded by the elite 8200 Intelligence Unit, an Israeli military-funded scheme for start-ups.

According to Forbes, the 8200 Intelligence Unit was heavily involved in providing expertise and funding for Stuxnet, a cyber attack on Iran that was a joint operation between the US and Israel.

Image captionThe texts had been sent to human rights activist Ahmed Mansoor

Listed in the SSI were multi-million dollar deals made between the NSO Group and government entities in Mexico and Panama. This is the tip of the iceberg - press reports of sales rely on leaks and anonymous sources, and so there are likely many more unknown to the general public.

In 2015, the NSO Group’s owners - US-based venture capital firm Francisco Partners - were looking to sell the company at a value of around $1bn. Neither firm has responded to the BBC’s requests for further comment.

That the NSO Group sells tools to governments is no secret - in a statement released in response to claims it was behind the attack on Mr Mansoor, NSO Group spokesman Zamir Dahbash said: "The company sells only to authorized governmental agencies, and fully complies with strict export control laws and regulations."

But the company has gone no further than that in describing who its customers are, and what exactly they buy. It does say it has no control over how its tools are used and for what purpose.

Outstanding work

Whatever the origin of the NSO Group, what has been created is an extraordinarily talented team of cyber specialists.

The attack on Mr Mansoor, had it worked, would have utilised not one but three zero day attacks. A "zero day" is a term given to vulnerabilities that were previously unknown to the security industry, and are therefore wide open to attack. To discover one zero day is rare, to find three is outstanding.

Clues to the origin of the attack came when the experts looked at the messages Mr Mansoor received. A link was included to a web domain known to point to servers set up by the NSO Group for its customers.

When the researchers analysed the spyware’s code, they noticed apparent references to "Pegasus", the name given, by the NSO Group, to one of its spying products.

Details about Pegasus were made public last year when another cyber arms firm, called the Hacking Team, was itself breached. Material used to market Pegasus was subsequently leaked.

When Apple was made aware of the vulnerabilities in its iPhone, it acted quickly, patching the problem in 10 days and pushing out an update to all of its users. That has neutralised this specific attack, sure, but there'll likely be many more that remain hidden from view.

In a rare interview with Defense News, the NSO Group’s co-founder, Omri Lavie, said their attacks would "leave no trace".

Thanks to the quick thinking of Mr Mansoor, and the forensic efforts of researchers, the group has been temporarily dragged into the limelight - but it will only be for a brief moment. Soon the NSO Group will rejoin the rest of the money-spinning cyber arms trade back in the shadows.

Follow Dave Lee on Twitter @DaveLeeBBC and on Facebook

Generation X

Wednesday, 31 August 2016