YCLOAK

McDonald’s is hoping to make a difference in its future seven seconds at a time.

 

The company that helped define fast food is making supersized efforts to reverse its fading popularity and catch up to a landscape that has evolved around it. That includes expanding delivery, digital ordering kiosks in restaurants, and rolling out an app that saves precious seconds.

 

Much of the work is on display in an unmarked warehouse near the company’s headquarters in suburban Chicago, where a blowup of a mobile phone screen shows the app launching nationally later this year. McDonald’s estimates it would take 10 seconds for a customer to tell an employee their order number from the app, down from the 17-second average of ordering at the drive-thru, a difference that could help ease pileups. Elsewhere at the Innovation Center, the digital ordering kiosk shows how customers can skip lines at the register.

 

“Five, 10 years ago, we were the dominant player in convenience, as convenience was defined in those days,” CEO Steve Easterbrook said last month. “But convenience continually gets redefined, and we haven’t modernized.” 

 

The push come as McDonald’s Corp.’s stock has hit all-time highs as investors cheer a turnaround plan that has included slashed costs and expansion overseas. Yet the asterisk on the headlines is the chain’s declining stature in its flagship U.S. market, where it is fighting intensifying competition, fickle tastes and a persistent junk food image.

 

In an increasingly crowded field of places to eat, the number of McDonald’s locations in the U.S. is set to shrink for the third year in a row. At established locations, the frequency of customer visits has declined for four straight years, even after the launch of a popular “All-Day Breakfast” menu. 

 

The chain that popularized innovations like drive-thrus in the 1970s acknowledges it has been slow to adapt, and is scrambling to better fit into American lifestyles. 

 

Running to keep up

 

Lots of once-dominant restaurant chains are feeling the pressure of people having more eating options.

 

An estimated 613,000 places were selling either food or drink in the U.S. last year, up 17 percent from a decade earlier, according to government figures. Supermarkets and convenience stores are offering more prepared foods, and meal-kit delivery companies have been expanding. 

 

“Better burger” places like Shake Shack and Habit Burger Grill don’t come close to McDonald’s roughly 14,000 U.S. locations, but they’re growing. And even if Starbucks and Dunkin Donuts don’t serve burgers and fries, they are among those promoting food more aggressively.

 

“They’re still taking customers from the same market pool,” said Nick Karavites, a McDonald’s franchisee with 22 locations in the Chicago area and chairman of a regional leadership committee.

 

Richard Adams, a former McDonald’s franchisee who is now a consultant to those businesses, has questioned whether the chain can return to the height of its popularity in such a fragmented marketplace. He also noted that many of the new offerings the company is pursuing, such as delivery, are already available at other places.

 

Still, McDonald’s needs to make changes to keep customer visits from falling further. 

 

‘Turning a very large ship’

 

One main focus is the drive-thru, where McDonald’s gets roughly 70 percent of its business. 

 

Customers who place orders on the mobile app, for instance, could also pull into a designated parking spot where an employee would bring out their order. That would theoretically ease backups at the drive-thru, which in turn might prevent potential customers from driving past without stopping during peak hours.

 

Then there’s the partnership with UberEats to offer delivery. McDonald’s gives an undisclosed percentage of the sale to UberEats, in addition to a fee of about $5 that customers pay. So a risk is that delivery could draw from in-store sales, eating into profitability.

 

So far, however, McDonald’s says delivery is bringing in new business during slower times at the roughly 3,500 locations where it has rolled out since the start of the year. 

 

Either way, such changes aren’t likely to transform operations overnight, since most of McDonald’s customers might prefer to order the way they always have. 

 

“That’s like turning a very large ship,” said Karavites, noting the range of company efforts intended to build sales over time. At his remodeled restaurant in Chicago where delivery was recently launched, he said sales are climbing. 

 

To bring more people in over the short-term, the company is promoting $1 sodas and $2 McCafe drinks. Glass cases displaying baked goods are also popping up in stores. And at about 700 locations, the company is testing “dessert stations” behind the counter where employees can make sundaes topped with cake or brownie chunks. 

 

Those stations could eventually handle an expanded menu of sweets.

 

Junk food image

 

At the same time, McDonald’s is trying to shake its image for serving junk food, especially since its appeal to families with children has long helped keep it ahead of rivals like Burger King and Wendy’s.

 

It’s made changes to its Happy Meal, and made a high-profile pledge to offer healthier options. It plans to start using fresh beef instead of frozen patties in Quarter Pounders. But as other chains emphasizing quality or health keep emerging, it may get harder for McDonald’s to hold onto families or change perceptions. 

 

Larry Light, a former chief marketing officer at McDonald’s, says the company strayed in recent years by chasing customers who may have been going to places like Chipotle, but that it is refocusing on burgers and fries. He thinks that will help get people visiting more often.

 

“You cannot build an enduring, profitable business on a shrinking customer base,” Light said.

 

And Bernstein analyst Sara Senatore cited the changes the company is pursuing in raising her rating on McDonald’s to “buy” in April.

 

“I wouldn’t underestimate the power of scale,” Senatore said.
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Working 50 meters (164 feet) under ground with minimal air supply, Uuganbaatar is one of thousands of Mongolians trying to make a living digging for coal.

Although the mining season does not begin until autumn, when the ground freezes and work is safer, the 31-year-old and his colleagues are seeking to gain a head start by digging a shaft in Nalaikh, one of the nine districts of Mongolia’s capital Ulaanbaatar, in late June.

But their mine could soon be shut by the government, which has launched an unprecedented crackdown on sites that don’t meet safety standards.

That would mean even fewer opportunities for Mongolia’s individual prospectors, who have already been hit hard by the privatization of mines previously open to all.

Miners such as Uuganbaatar dig for coal under loose arrangements with local unions and private companies.

“Things seem really tough for private miners now,” said Uuganbaatar, who, like many Mongolians, goes by one name. “All the licenses have been bought up by influential big shots. Whenever you start to dig somewhere, someone shows up and chases us away. It’s impossible to find a place or mine to dig in.”

A weak economy and particularly harsh winters drove herdsman from across Mongolia to Nalaikh’s private mines in the late 1990s and early 2000s.

The district, with a population of nearly 30,000, was home to Mongolia’s first state mining company, which collapsed in the 1990s in the midst of a post-communist economic crisis. The firm’s dilapidated buildings dot the landscape.

With the economy slowing again after a commodities boom earlier in the decade, authorities fear more people could be tempted down the mines.

“More mines will probably be shut down,” said Byambadorj, a woman who ran two private mine shafts with her husband for 13 years until the government closed them in June.

“In Nalaikh, life revolves around mining, and mining is the main means to support our lives,” she says, insisting that her mines were operating according to the safety standards.

The government had tried to get companies to improve safety by issuing licenses. An official said nine companies had been granted licenses, but not all had met the standards.

“People were working in shafts with no air supply,” said S. Battulga, an official whose department is responsible for reviewing mining licenses across the country.

“Therefore, it was requested that the private mining licenses in Nalaikh be cancelled” on health and safety grounds, he added.

Nalaikh authorities would like people to switch from mining to work in brick factories, but no one seems keen to switch despite the danger.

In the past 25 years, the government has recorded 234 fatalities in Nalaikh’s coal mines, although residents say the real number is hundreds higher.
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Spanish companies will commit millions of pounds of investment to Britain on Thursday, the British government said, as it seeks to limit the economic impact of leaving the European Union.

The investment plans, which include building trains and trams in Britain, coincide with a three-day state visit to Britain by Spain’s King Felipe and Queen Letizia.

King Felipe and British trade minister Liam Fox are due to address a U.K.-Spain business forum in London on Thursday, before the Spanish monarch holds bilateral talks with Prime Minister Theresa May at her Downing Street residence.

Britain said the investments would include Spanish manufacturer CAF committing 30 million pounds ($39 million) to build trains and trams at a new factory in Wales, creating 300 jobs, and Spanish infrastructure company Sacyr unveiling plans for a new office in London.

Bilateral trade strong

Bilateral trade between the two countries was worth 40 billion pounds in 2015, and more than 400 Spanish companies are registered in Britain, the government said.

“The sheer scale of Spanish investment in Britain demonstrates Spain’s continued confidence in the strength of the UK economy, and shows that we can and will maintain the closest possible relationship,” May said in a statement.

The government also highlighted more than 100 million pounds which is being invested in the expansion of Luton Airport, majority owned Spanish airport operator AENA, and the construction of a 26 million pound factory in the West Midlands by Spanish steel producer Gonvarri Steel Services.

Gibraltar remains issue

Away from the financial deals, the Spanish royal visit comes amid tensions over the post-Brexit future of the British territory of Gibraltar, which Spain wants back.

The future of Gibraltar, a rock on the southern tip of Spain captured by Britain in 1704, and its 30,000 inhabitants, is set to be a major point of contention in the Brexit talks.

During an address to members of both houses of parliament in London on Wednesday, Felipe said he was confident that Spain and Britain could work towards an acceptable arrangement over Gibraltar.

May to meet with King Felipe

The EU and Britain have also yet to agree on guarantees for EU citizens living in the UK and British expats living in other EU countries. More than 300,000 Britons live in Spain, while more than 130,000 Spaniards live in Britain.

On Wednesday, Felipe said these citizens had “a legitimate expectation of decent and stable living conditions” and urged the British and Spanish governments to work to ensure the Brexit agreement provided sufficient assurance and certainty.

May’s office said that during her talks with Felipe she would welcome the contribution that Spanish citizens make to Britain’s economy and society.

 
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It’s nearly midday at the bustling Tegeta bus terminal in Tanzania’s biggest city and Olivia Mbiku is busy preparing ugali – a popular maize meal – beef stew and vegetables for her customers.

“I wake up early, light up the fire and rush to the market to buy meat, cooking oil, tomatoes and everything I need for the day,” said the 25-year-old mother of two.

Shrouded in a cloud of smoke, and with a traditional colorful ‘khanga’ tied round her waist, Mbiku takes some maize flour from a sachet and sprinkles it into boiling water while briskly stirring with a stick to make it stiff.

“I cook ugali every day because most of my customers like it,” Mbiku told the Thomson Reuters Foundation. “It’s not a lucrative business, but I get enough to feed my family.”

Mbiku is among dozens of food vendors trying to earn a living amid the hubbub of the Dar es Salaam bus terminal, where conductors hoot and yell to attract customers.

She works eight hours and day, earning around 45,000 shillings ($20) to supplement her husband’s income as a mason.

But unlike licensed hawkers who work from rows of wooden stalls, Mbiku cooks in the open air and is often harassed by the city militias for selling food without the proper papers.

“They often seize my cooking pots and sometimes lock me up. I have to pay some money to be released and get my stuff back,” she said.

Mbiku and other women with unlicensed businesses finally have a glimmer of hope after the Tanzanian government last month announced it would recognize them as part of its broader policy of empowering women.

Maria Ezekiel, 31, who has a stall serving chicken soup, chapati and tea along the busy Bagamoyo highway each morning, said the move to formalize micro-enterprises like hers was an important milestone for small-scale entrepreneurs.

A license would allow her to apply for credit to upgrade her business, she said.

“I think it’s a very good opportunity for me. As soon as the identity cards are issued I will start processing my bank loan,” Ezekiel told the Thomson Reuters Foundation. “I want to borrow at least 500,000 shillings ($225) to modernize my cooking business.”

The roadside chef wants to buy better equipment and switch to a gas stove to replace the smoky firewood she now cooks on.

Unprotected

Operating in the informal sector leaves women without protection and unable to access credit, experts say.

“Urban food vending may be a good tool for creating livelihood security for the urban poor, but to achieve this there has to be better policy initiatives,” said Haji Semboja, economics professor at the University of Dar es Salaam.

Presenting the annual budget in June, Tanzania’s finance minister, Philip Mpango, said all food vendors – most of whom are women – would be brought into the mainstream sector.

The government would work with regional authorities to identify informal businesses and license them before 2020, he said.

“We will issue identity cards and designate special premises for them,” the minister told parliament.

Margareth Chacha, a banker and former chief executive of Tanzania Women’s Bank that supports small-scale women entrepreneurs, said women are held back because of strict loan conditions imposed by banks.

“Most of the women can’t access the loans because the conditions are too tough,” she said. “But if the government can act as a guarantor, I’m sure the banks will be willing to give loans.”

The benefits of thriving women-led businesses are felt throughout the economy, she said.

Back at Tegeta bus terminal, Olivia Mbiku says she is now hoping for a more stable, prosperous future.

“I would very much like to get a bank loan and start a big catering business,” she said.
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The speaker of Brazil’s lower house vowed Wednesday to fight any changes President Michel Temer makes to a labor reform bill passed by the Senate, highlighting new tension between longtime political allies.

The speaker, Rodrigo Maia, would replace Temer if Congress allows the Supreme Court to move ahead with a corruption charge against the president, a vote that Maia has said he wants to have this week.

The bill, a business-friendly measure modernizing labor laws dating from the 1940s, passed by a wide margin in the Senate on Tuesday following approval in the lower house and will be sent to Temer to be signed into law.

Given that any changes in the Senate would have sent the bill back to the lower house for fresh debate, Temer assured senators Tuesday that he would use a decree to tweak the legislation as they suggested after he signed it into law.

Maia rejected any such arrangement.

“The lower house will not accept any change to the law. Any [presidential decree] will not be recognized by the House,” the speaker said in a Twitter post.

Graft scheme

Prosecutors charged Temer last month in a graft scheme involving JBS SA, the world’s biggest meatpacker. Executives said the president took bribes from the company in exchange for resolving tax matters and facilitating loans from state-run banks.

Temer has repeatedly denied any wrongdoing.

The presidential press office said in a statement that Maia has remained loyal to Temer since becoming speaker last year.

“The presidential palace rebuffs the attempts to create a false crisis between the executive and legislative power without connection to facts and reality,” the statement said.

Under Brazilian law, two-thirds of the lower house of Congress must vote to allow a criminal charge against a sitting president to move to the Supreme Court. The vote could happen Friday or possibly be delayed until early August, after a congressional recess.
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Zambia’s parliament has imposed a 90-day state of emergency, after the president last week declared the need for one. The situation is likely to deepen the political crisis in the country, and analysts say it also could scare away much needed investors to the copper-dependent, landlocked nation.

The president called for the state of emergency after a fire destroyed the capital’s main market earlier this month. He described the fire as an arson attack by “a few unpatriotic citizens” and said, in a speech to the nation, that this and other fires were “premeditated acts, which if left unchecked could have serious socio-economic consequences capable of drawing the country backwards.”

Parliament unanimously passed the measure Tuesday. No opposition lawmakers voted, as 48 of them were suspended last month for boycotting a speech by President Edgar Lungu. Their leader, Hakainde Hichilema, has been in jail since April, facing a treason charge. The few opposition who remained Tuesday boycotted the vote.

Opposition spokesman Charles Kakoma says his opposition United Party for National Development would have voted against the measure, which he says limits citizens’ essential freedoms. Additionally, he says he fears it will scare away visitors.

“People obviously, investors and even tourists will be scared to come to a country that has just declared a threatened state of emergency,” he told VOA. “They are not sure about their investments, and about their safety once they are in Zambia.”

Falling copper prices and an energy crisis had already sent Zambia’s economic growth downward in 2015. That was well before the disputed 2016 poll that pitted Lungu against Hichilema and led to today’s bitter political landscape.

Martyn Davies, managing director of emerging markets and Africa at Deloitte, says local business owners expressed heightened concern to him during his recent visit to Zambia. He notes, though, that Zambia has never quite lived up to its promise.

“The country always had this perennial word which is used for many countries in the region, ‘potential,’” he told VOA from Johannesburg. “The potential doesn’t quite trickle down, didn’t quite result into real strong robust growth and real trickle down economics, i.e. creating a competitive private sector.

“And I think this is something which a small economy — a small, arguably vulnerable economy like Zambia, landlocked as it is, dependent on a single economy source — you have to be stable. You can’t have these sort of swings in policy and fiery political rhetoric. That just undermines the confidence of capital, both domestic and foreign, in your economy,” said Davies.

Analyst Nicole Beardsworth, of the Johannesburg-based Center for the Study of Violence and Reconciliation, notes that parliament enacted Article 31 of the constitution, the milder “Declaration Relating to Threatened Emergency,” instead of Article 30, “Declaration of Public Emergency.” She says the effect is the same, however, and Lungu’s soft-pedaling of the situation could be making things worse.

“He’s trying to play a very dangerous game, which is he is imposing legislation that curbs, or has the potential to curb, the freedoms of Zambians,” she told VOA. “But he is trying to sell it as not being a state of emergency, and not legislation that will curb the freedom of Zambians. I don’t think that anyone really believes him in the statements that he made where he said Zambia is a democracy and people’s rights and freedoms will be respected. Because to be quite honest, his behavior over the last 18 months has proven that to not be the case.”

A spokesman for Zambia’s president told VOA last week that the emergency measure is not intended to curb liberties, but to keep Zambians safe.

Lungu now has three months to apply his new powers to solve the case of the fire that gutted the country’s busiest market and destroyed the livelihoods of some 1,900 traders. Officials have estimated it will take one year and cost $20 million to rebuild.

 
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Iraq says it will offer new oil and gas exploration rights as it looks to boost energy revenues to fund its war against the Islamic State group and shore up its finances amid low oil prices.

 

Oil Minister Jabar Ali al-Luaibi said late Tuesday that his ministry plans to put nine border exploration blocks up for bidding by international energy companies. Five are shared with Iran, three with Kuwait and one is in the Persian Gulf.

 

He did not provide a timetable.

 

Iraq has the world’s fourth largest oil reserves. This year, it added 10 billion barrels, bringing its total reserves up to 153.1 billion. Low oil prices have taken a heavy toll, as some 95 percent of the country’s revenues come from the energy sector.

 

 
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When Janet Yellen delivers her testimony on the Federal Reserve’s semiannual report to Congress on Wednesday, investors may listen as much for clues to her own future – and the Fed’s – as they will to what she says about interest rate policy.

The Fed chair is likely to repeat a message she has been sending about rates: That further gradual increases will follow the three rate hikes the Fed has made since December. She is expected to say that even though inflation has slowed further below the Fed’s target level, the job market appears healthy enough to justify slightly higher borrowing costs.

But lawmakers may prod Yellen about her own plans and about the potential reshaping of the Fed itself resulting from a forthcoming influx of new board members selected by President Donald Trump. During last year’s presidential campaign, Trump was critical of the central bank for its low-rate policies, which he said were helping Democrats, and for its efforts to enact tougher regulations on banks in response to the 2008 financial crisis.

On Monday, the administration announced that it had chosen Randal Quarles, a Treasury Department official under two Republican presidents, to serve as vice chairman for supervision, the Fed’s top bank regulatory post.

Including the post Quarles would fill, the Fed has three vacancies on the seven-member board. Trump has yet to announce his other choices, though at least one person –  Marvin Goodfriend, an economist, a former staffer at the Federal Reserve Bank of Richmond and now a professor at Carnegie Mellon University – is considered a leading candidate for one of the spots.  All of Trump’s nominations will require Senate approval.

Yellen so far has deflected questions about whether she would accept a second four-term term as chairman if Trump asked her to remain after her term ends in February. But lawmakers may try to glean some insight into her own wishes and about how the Fed could potentially change under the influence of Trump’s nominees.

On Wednesday, Yellen will address the House Financial Services Committee and on Thursday the Senate Banking Committee. She will be testifying on the Fed’s Monetary Policy Report, with one wrinkle this time: For the first time, the Fed released the report five days before Yellen’s testimony. In the past, the two had occurred the same day.

The central bank explained the change by saying Fed officials wanted to give lawmakers more time to review the semiannual monetary report before Yellen addressed questions about it.

The report said the Fed “expects that the ongoing strength of the economy will warrant gradual increases in the federal funds rate,” referring to its benchmark short-term rate.

The Fed had slashed that rate to a record low near zero in December 2008 to combat the worst economic downturn since the 1930s – and kept it there for seven years until nudging it up modestly in December 2015. It then left the rate unchanged for another year until raising it again in December of last year, followed by increases in March and June this year. Even so, the rate remains in a still-low range between 1 percent and 1.25 percent.

The Fed’s report noted that officials had affirmed at their June meeting that they foresee a total of three rate increases in 2017, if the economy performs as they expect. If so, that would mean one additional increase before year’s end. The Fed also expects to raise rates three times in 2018 if economic conditions evolve as they expect.

This week, Yellen will surely face questions about sticking to that pace, given that while job growth has been solid, inflation has slowed this year rather than edging closer to the Fed’s 2 percent target.

In a speech Tuesday, Lael Brainard, a Fed board member who has often argued for a go-slow approach to rate hikes, said she wanted to “monitor inflation developments carefully and to move cautiously on further increases” in the Fed’s key rate.

Brainard suggested that she would support a move soon to begin paring the Fed’s $4.5 trillion balance sheet, which swelled to five times its previous size after the Fed bought Treasury and mortgage bonds to hold down long-term borrowing rates in the aftermath of the 2008 financial crisis.

At its June meeting, the Fed signaled that it could begin shrinking its balance sheet later this year, a step that could put gradual upward pressure on longer-term rates for such items as home mortgages.
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Japanese car parts company Takata on Tuesday recalled another 2.7 million air bags that it previously thought were safe.

The recall affects certain Ford, Mazda and Nissan cars from the 2005 through 2012 model years.

Takata’s air bags are inflated by a chemical — ammonium nitrate — in emergency situations, but it can deteriorate in conditions of high humidity and heat. The company added a desiccant to stop the chemical inflators from degrading and thought they had then been made safe.

However, tests by the U.S. National Transportation Safety Board showed that Takata air bags were still subject to inflating without warning, expanding with great force and sending metal parts flying. Previous problems with Takata air bags have killed at least 17 people and injured more than 180.

Takata, which has filed for bankruptcy protection, has already recalled 42 million cars to replace the defective inflators, the largest automobile-related recall in U.S. history. But the latest recall raised doubts about the safety of other Takata inflators. The company has agreed to recall all original equipment inflators without a drying agent in phases by the end of 2018. The National Highway Traffic Safety Administration gave Takata until the end of 2019 to prove that inflators with the drying agents are safe, or they must be recalled as well.

U.S. Senator Bill Nelson, a Florida Democrat, said federal regulators have to act faster to determine whether all Takata air bag inflators are safe.

“We certainly can’t afford to wait until the December 2019 deadline. … If even more are found to be defective, it will take us from being the biggest recall ever to something that could become mind-boggling,” Nelson said.
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Three years ago, at the peak of the Boko Haram insurgency, Nigerian soldiers stopped all fishing activities in the country’s section of Lake Chad. Militants had infiltrated the ranks of the fishermen, the army said, and were using the guise to fund arms purchases and launch surprise attacks on innocent people.

The local fishermen’s union said it understood the army’s actions but pushed for an easing of the ban, because its members had no other way to earn a living in the largely dry and remote area.

Relief came to the local fishermen over the weekend, when the Nigerian Army commander in charge of the area, Major General Ibrahimn Attahiru, addressed the fishermen and said they could return to work based on some guidelines the army had reached with their leaders.

Fishermen support changes

The president of the Lake Chad Fishermen Association, Alhaji Abubakar Gamande, confirmed the development in an interview Monday with VOA’s Hausa Service and pledged that fishermen will follow the new rules.

“Based on what happened in the past, we will not continue to operate as we used to, where everyone did as he deemed fit,” he said. “We and the army will watch the activities of the fishermen and anyone whose work requires entering the lake. We will not let him operate as he wishes. We will screen all our members. We have to know where they are coming from and where they are going.”

In normal times, the fishermen can still make a decent living off Lake Chad despite the lake’s radical shrinkage over the past 50 years, which scientists believe is a result of overuse and shifting rainfall patterns brought on by climate change.

Local authorities back in control

But Boko Haram’s takeover of northeastern Nigeria severely disrupted a fishing industry that draws traders from Nigeria’s Lake Chad neighbors  Chad, Cameroon and Niger  and enables many locals to support themselves. By early 2015, the well-armed militants had seized effective control of the areas along the lake, and there was little the fishermen could do to stop Boko Haram activity.

Local authorities are now back in control, following a 30-month regional offensive by the army and a multi-national task force that includes soldiers from Cameroon, Chad, Niger and Benin.

Gamande was full of praise for the army, which he said has worked tirelessly to restore peace to the area.

Quiet on new rules

Asked how the new rules will prevent Boko Haram activity, the union leader said he cannot reveal all the details for security reasons.

“On our own part as a union we have laid down guidelines that enable us to know who comes for fishing, those who buy, and those who come to sell,” Gamande said.

“We will do all we can to ensure that what happened in the past will never happen again. Enough is enough.”
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