From Juliana Taiwo-Obalonye, Abuja
The Federal Government has said the over subscription of its recent eurobond by almost eight-fold (orders in excess of $7.8 billion compared to a pre-issuance target of $1 billion) showed the world’s strong appetite for Nigeria, adding that is evidence the country will be out of recession soon.
This is even as it has said strategic engagements with Organisation of Petroleum Exporting Countries (OPEC) and the Niger Delta agitators contributed to the rise in oil revenues, leading to the nation’s reserves growing by more than $4 billion in the last three months.
This disclosure was contained in Issue 23 of the Aso Villa Newsletter called “Government at Work” released on Monday.
Government added that it was a demonstration by the international business community of its faith in the country’s economic reform agenda. In the newsletter, government listed 11 reasons why it thinks the economy is on its way out of recession. It stated that after two consecutive quarters of negative growth, the non-oil economy showed, in Q3 2016, a modest return to positive territory at 0.03 per cent.
The newsletter attributed this marginal growth to the continued good performance of agriculture and the solid minerals, two sectors prioritised by the Federal Government. It said agriculture grew by 4.54 per cent in the quarter under consideration of which growth in crop production at nearly 5 per cent was at its highest since the first quarter of 2014. Growth in the solid mineral sector was said to have averaged about 7 per cent.
Another reason government gave for confidence the economy was recovering was the Anchor Borrowers Programme (ABP) of the Central Bank of Nigeria (CBN), which it said substantially raised local rice production in 2016 (yields improved from two tonnes per hectare to as much as seven tonnes per hectare in some states) and produced a model agricultural collaboration between Lagos and Kebbi states.
It also said that the Fertiliser Intervention Project (FIP), which involves a partnership with the government of Morocco for the supply of phosphate, was on course to significantly raise local production and bring the retail price of fertiliser down by about 30 per cent.
The fourth reason for hope in economic recovery is the newly established Development Bank of Nigeria (DBN). According to the government, the bank is finally taking off, with initial funding of $1.3 billion (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 Micro, Small and Medium Enterprises (MSMEs).
The newsletter reads: “A new social housing programme is kicking off in 2017. The ‘Family Homes Fund’ will take off with a N100 billion 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 – roads, rails and power projects – across the country.”
Another factor, which government said pointed to economic recovery is the implementation of the Social Investment and Empowerment Programme (SIP). According to the newsletter, all the four components of the SIP have now taken off.
It described the SIP as the largest and most ambitious social safety net programme in the history of Nigeria, with more than one million beneficiaries so far: 200,000 N-Power beneficiaries, 23,400 Government Enterprise and Empowerment (GEEP) scheme beneficiaries one million Homegrown School Feeding Programme (HGSFP) beneficiaries, as well as ongoing Conditional Cash Transfer (CCT) payments across nine pilot states.
The newsletter reads: “Strategic engagements with OPEC and 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 billions 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).”