Federal Government has said that the almost 8-fold over-subscription of its recent Eurobond (orders in excess of $7.8 billion compared to a pre-issuance target of US$1bn) demonstrated strong market appetite for Nigeria, and showed confidence by the international investment community in Nigeria’s economic reform agenda. The federal government position was contained in a bulletin of the Aso Villa, “Government at Work,” released, in Abuja.
According to the President Muhammadu Buhari administration, the nation’s economy was already recovering from recession as evidenced by the marginal non-oil sector growth rate of 0.03 per cent in 2016 Q3, (after two quarters of consecutive negative growth), among others positive developments.
It attributed the marginal growth to the continued good performance of agriculture and the solid minerals, two sectors prioritised by the Federal Government.
The federal government said agriculture grew by 4.54% in the quarter under consideration, with growth in crop production recording nearly 5 per cent, its highest since the first quarter of 2014.
Growth in the solid mineral sector was said to have averaged about 7%.
The second reason which government said gave it confidence the economy was recovering was the Anchor Borrowers Programme (ABP) of the Central Bank of Nigeria which it said substantially raised local rice production in 2016 (yields improved from 2 tonnes per hectare to as much as 7 tonnes per hectare, in some States).
The FG added that the Fertilizer Intervention Project (which involves a partnership with the Government of Morocco, for the supply of phosphate) is on course to significantly raise local production, and bring the retail price of fertilizer down by about 30 percent.
Another reason given by government that the economy is bullish is the newly established Development Bank of Nigeria (DBN). That bank was established with an initial take-off of US$1.3bn (provided by the World Bank, German Development Bank, the African Development Bank and Agence Française de Development) to provide medium and long-term loans to MSMEs.
The government added, “A new Social Housing Programme is kicking off in 2017. The ‘Family Homes Fund’ will take off with a 100 billion naira provision in the 2017 Budget. (The rest of the funding will come from the private sector).
“More than N800 billion has been released for capital expenditure in the 2016 budget, since implementation started in June 2016. This is the largest ever capital spend within a single budget year in the history of Nigeria. These monies have enabled the resumption of work on several stalled projects – road, rail and power projects – across the country.”
Another factor which government said was a point to economy recovery is the implementation of the Social Investment and Empowerment Programme (SIP).
It added that all the four components of the SIP have now taken off, even as, it described the SIP as the largest and most ambitious social safety net programme in the history of Nigeria, with more than 1 million beneficiaries so far: – 200,000 N-Power beneficiaries; 23,400 Government Enterprise and Empowerment (GEEP) Scheme beneficiaries, 1,000,000 Homegrown School Feeding Programme (HGSFP) beneficiaries, as well as, ongoing Conditional Cash Transfer (CCT) payments across nine pilot states.
The government said further, “Strategic Engagements with OPEC and in the Niger Delta have played an important part in raising our expected oil revenues. Already, Nigeria’s External Reserves have grown by more than $4 billion in the last three months.
“Collaboration with China, proceeding from President Buhari’s April 2016 visit, has unlocked billion of dollars in infrastructure funding. Construction will begin on the first product of that collaboration, a 150km/hour rail line between Lagos and Ibadan, in Q1 2017.
“The National Economic Recovery and Growth Plan (NERGP), the Federal Government’s medium-term Economic Plan, is due for launch in February 2017, and will chart a course for the Nigerian economy over the next four years (2017 – 2020).”
