Nigeria’s President Muhammadu Buhari has painted a rosy picture of Nigeria’s economy saying its outlook remains bright with sustained investments in infrastructure, particularly in ICT.
He stressed that Nigeria’s business environment favours global businesses and has a friendly regulatory environment that supports Foreign Direct Investments (FDIs).
Buhari said this while delivering a keynote address on Wednesday in Paris, France, during the one-day Nigeria International Partnership Forum, with focus on, “Beyond the Pandemic.’.
This is just as the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, who also spoke at the same forum, disclosed that confidence in the Nigerian business environment was growing due to sustained policy interventions in the economy. Overall, Emefiele said the business confidence index was projected at 37.7 index points in November 2021 and 57.6 index points by mid-2022.
Continuing, President Buhari said the nation’s economy was being re-engineered and re-positioned to be globally more competitive, favouring business and entrepreneurship to drive growth and development.
According to him: “For us in Nigeria, lessons drawn from the pandemic prompted us to redouble efforts to mitigate its socio-economic effects. Despite prevailing uncertainties, our equitable and sustainable reform initiatives resulted in substantial economic gains and steady recovery.
“I can assure you that our administration is on the right path to achieving multi-sectoral progress. We have revitalised the economy by increasing investments in capacity building, health, infrastructure, women’s empowerment, climate change, and food security.
“Today, these actions are yielding self-employment, expanding our human resource pool and strengthening our national productivity for sustainable development.”
The President assured investors of the country’s willingness to create a win-win at every point.
“I am proud to reiterate our resolve to reduce and ultimately eliminate obstacles to access and retention of FDI. Our investment-friendly policies are backed by the rule of law, practical security policies and a resilient population.
“Let me finally stress that Nigeria is open for partnership and cooperation. I invite the French business community to take advantage of the vast investment opportunities in Africa’s largest economy.
“As our development partners, rest assured that we will stand together with you throughout our partnership journey to guarantee our mutual interest.”
President Buhari told a gathering of French and Nigerian businessmen that the government recognised the nation’s risk profile and decided to re-assess and update the National Security Strategy in 2019.
“The implementation of this multi-sectoral strategy has contributed to the progress we have made in fighting insurgents and terrorists in the north-east of the country. Working closely with international partners, we are firmly addressing the root causes of crimes, and taking measures to prevent and counter violent extremism,’’ he added.
“As I said at the fifth edition of the Future Investment Initiative Summit in Riyadh, Saudi Arabia, investing in humanity is investing in our collective survival.
“With this in mind, we have incorporated the Public-Private Partnership model into our economic recovery plan, to attract private sector participation in the financing and operations of critical economic and social infrastructure. This measure is already helping to mitigate COVID-19 triggered capital flight and decline in grant and development financing.
“Also, at the just concluded COP26 in Glasgow, I stressed the link between modern infrastructure and the overall economic development of a nation. Hence, the massive infrastructure expansion programme, we have been executing in various sectors since the beginning of this administration. 1.5 trillion Dollars is the cumulative amount estimated to be spent within a period of ten years from 2015,” the president added.
According to him, his administration has made significant investments in railways, seaports, roads, renewable energy, housing and many others attractive to prospective investors. He said institutions such as the Nigeria Sovereign Investment Authority and the recently created Infrastructure Corporation of Nigeria are run as independent world class institutions to support and facilitate investments in the country.
President Buhari stressed that opportunities in the mining sector had been expanded, with simplified licensing process, extensive investments in transportation of raw materials, equipment and other mining elements by road and by rail.
According to him, to keep the progress in the digital economy, the fastest growing sector in Nigeria in both 2020 and 2021 on track, government recently approved the national policy on Fifth Generation (5G) network.
He said: “Our ultimate goal is to leverage ICT platforms to spur further investments and create jobs, while diversifying support to other emerging sectors. Already, several foreign investors are taking advantage of our recent ranking as the leading start-up ecosystem in Africa.
“Over a week ago, I launched the eNaira, the electronic version of our national currency. When fully operationalised, this innovation will increase participation in fin-tech within Nigeria, increase efficiency in the banking sector, and boost our capacity to combat illicit flow of funds,’’ he said.
The president said the oil sector was also getting more attention to expand opportunities with the signing of the Petroleum Industry Act (PIA).
“Our plan is to increase Liquefied Natural Gas exports and expand our domestic market. Partnerships in textile and leather processing, tourism, and health sectors are also areas we can explore,’’ he further explained.
The president noted that the agricultural sector, through Anchor Borrowers Programme, provided loans and technical support to small holder farmers, leading to the expansion in the number of rice mills in Nigeria from 10 in 2014 to 40 today.
“The country has also increased the number of active fertilizer blending plants to more than forty-six, from fewer than five in 2014.
“Similarly, we have set aside several million hectares of available arable land for agriculture, and have embarked on the creation of Special Agriculture Processing Zones across the country,” he added.
Speaking further, Emefiele pointed out that headline inflation in the country was also expected to moderate to 15.35 per cent by December 2021 and 14.91 per cent by February 2022, respectively.
Similarly, he anticipated that core inflation would fall to 13.39 percent in December 2021 from 13.74 per cent in October 2021. “This is due to the favourable impact of the various CBN and government interventions in the agriculture and the real sector, the moderation of supply side constraints and the gradual increase in domestic economic activity, which is expected to keep prices low in the near-term,” Emefiele told his audience.
He estimated that Nigeria’s external reserves would surpass $42 billion by mid-2022. This, according to the CBN Governor was due to sustained increase in crude oil price, the impact of Eurobond Issuance, and the stable exchange rate condition.
According to Emefiele, the recent launch of the eNaira would improve the conduct of monetary policy in Nigeria, reduce transaction costs and increase financial inclusion in the medium to long term.
“We expect an increase in the availability of credit through the CBN intervention programmes to increase aggregate demand and stimulate growth in key sectors that face credit constraints.
“We expect higher revenue due to stronger revenue administration efforts by the fiscal authorities,” he added.
The CBN Governor reiterated that the take-off of the Dangote refinery and the implementation of the Petroleum Industry Act (PIA) which were expected to expand the fiscal space of government in the medium to long term, would also boost growth.
In addition, Emefiele told the gathering of foreign investors and global political leaders and diplomats that improvement in crude oil prices were expected to provide stability to Nigeria’s external reserves and exchange rate.
As part of efforts to drive the diversification of the Nigerian economy, the CBN said policies had been developed to reduce import of goods that could be produced in the country in order to create employment opportunities for Nigerians, reawaken Nigeria’s manufacturing industry and reposition them for the AFCFTA.
He pointed out that prior to the COVID-19 pandemic, the Nigerian economy had been on a positive growth trajectory and had witnessed 12 consecutive quarters of positive growth following the 2016 to 2017 recession, along with significant foreign capital inflows due to improved fundamentals of the economy.
Inflation rate rose to 18.17 per cent in March 2021 from 12.12 per cent in January 2020, and external reserves declined to about $34.3 billion in May 2021, from nearly $36.7 billion in January 2020.
Also then, market turnover on the Investors and Exporters’ window declined significantly too, from an average of $262.3 million daily in 2019, to about $44 million at the height of COVID-19 in the second quarter of 2020.
“The Nigerian economy rebounded after two quarters of contraction. The economy witnessed growth of 0.11 percent in the fourth quarter of 2020 from -3.62 percent in the third quarter of 2020.
“The non-oil and services sectors were the major contributors to growth in the fourth quarter. Headline inflation rate decreased to 16.63 percent in September 2021 from 18.17 percent in March 2020 and external reserves grew to nearly $41.5 billion.
“The quick recovery from the recession was due to targeted interventions in the critical sectors of the economy, monetary and exchange rate policies to stabilise exchange rate, the implementation of the Economic Sustainability Plan, and the nationwide improvement in vaccine administration and coverage,” he added.
While noting that the immediate effects of COVID-19 in Nigeria was felt through the loss of means of livelihood for many households during the lockdown, Emefiele highlighted various measures the CBN adopted to support households and firms in the wake of the pandemic.
Some of these included creating a N100 billion target credit facility for affected households and small and medium enterprises through the NIRSAL Microfinance Bank; creating a N100 billion intervention fund in loans to support pharmaceutical companies and healthcare practitioners and to expand and strengthen the capacity of our healthcare institutions; creating a N1 trillion facility in loans to boost local manufacturing and production across critical sectors; and creating a research fund, which was designed to support the development of vaccines in Nigeria.
Highlighting the CBN’s medium term policies to tackle COVID-19, he listed some of these to include the granting approval of three payment bank licenses which would accelerate the provision of digital financial services by bank and non-bank institutions and reduce the need for paper money; implementation of the Tertiary Institutions Entrepreneurship Scheme (TIES) to promote entrepreneurial activities and foster job creation among Nigerian youths, and supporting the Auto-Gas Conversion Programme of the federal government.
On the other hand, he listed the CBN’s long term policies to tackle COVID-19 to include the establishment of the InfraCo to address the funding challenges in financing the development of critical infrastructure which would act as a catalyst for growth in the medium and the long run while providing reasonable returns to investors.
Others are the planned establishment of the CBN CPP intervention to develop the human capital needed to build capacity in the financial sector.
“Through this program, the CBN will produce a critical mass of well-educated postgraduate degree holders in the fields of Accounting, Banking and Finance, Business Administration and Economics for the financial services industry, and the Nigerian economy as a whole.
“The creation of a Central Bank Digital Currency, or the eNaira, to support post COVID economic growth. The eNaira will increase financial inclusion, improve the conduct of monetary policy, and facilitate low-cost and efficient payments.
“The impact of our policy measures helped to prevent larger GDP contractions in 2020, as projected by analysts. Unfolding developments continue to indicate that the Nigerian economy will achieve strong growth while current inflation trends remain on track towards their desired levels,” he added.
In his presentation, the Founder/Executive Chairman of the BUA Group, Abdul Samad Rabiu, also called for a three-way partnership between the African private sector, government and finance institutions to fast-track growth and development in Nigeria, and in Africa.
According to Rabiu, who is the President of the France Nigeria Business Council, the partnership will identify sustainable solutions to the issues of infrastructure, climate and industrialisation.
Speaking at the Forum in Paris, France, Abdul Samad Rabiu noted that despite the challenges occasioned by the global pandemic, African governments must work with the private sector across board to develop sustainable policies that will aid investments and innovation while financial institutions must move with the times and come up with more innovative approaches to support growth in the continent.
According to Abdul Samad Rabiu, the Nigeria Partnership Forum was timely and a welcome development – especially for Nigeria and the rest of Africa, in the face of increasing global economic uncertainty and challenges brought about by the latest global pandemic.
“Numerous opportunities for global partnerships exist across Nigeria and Africa. Key amongst this is in the infrastructure space. By increasing our investments in infrastructure, creating access between borders, encouraging the free movement of goods and services under the AfCFTA, and opening up the continent, it is expected that supply chains will become more efficient, trade would be bolstered, new industries and industrial bases will emerge while intra-African integration would be enhanced. All of these will ensure that Nigerians and Africans will be better off.”
“We also need to see more three-way partnerships between the African private sector, governments and Development Finance institutions to fast-track growth. I believe conversations in this important forum will touch on this topic while also challenging our approach towards the future of Nigeria and the African continent. We can all agree that there are challenges but while they may appear numerous, we cannot give up or choose to remain docile in our bid to accelerate development and innovation,” he added.
The National Security Adviser to the President, Major General Babagana Monguno (rtd); Nigeria’s Special Envoy on Chad and Lake Chad Basin, Ambassador Babagana Kingibe; Minister of Communication and Digital Economy, Dr Isa Ali Pantami; Minister of State, Petroleum, Timipre Sylva; Minister of Information, Lai Mohammed and Minister of Foreign Affairs, Geoffrey Onyeama also gave an overview on key sectors of the Nigerian economy.
Some other business leaders from Nigeria at the event included Founder and Chairman of Oriental Energy Resources, Mohammed Indimi; Chairman/Editor-In-Chief of THISDAY Group and Arise News Channel, Nduka Obiagbena; and Founder/Chairman of Zenith Bank, Jim Ovia, Chairman of Heirs Holdings and UBA, Tony Elumelu.