The World Bank has offered to give Nigeria a $500 million-loan to mop
up out -of-school children, according to an official of the bank.
A senior education specialist with the bank, Dr Olatunde Adekola, disclosed this in Sokoto on Sunday, February 26.
Adekola, who led a five-man team of the bank on a courtesy call on
Governor Aminu Tambuwal of Sokoto State, added that the loan would be
given under its ‘Better Education-For-All (BEDA)’ Project.
He said that the project would, specifically, focus on the northern
parts of Nigeria, specifically to bolster the girl-child education.
Adekola said, “The project will be results oriented to ensure that children are able to read and write.”
“This is to help the government to strengthen its service delivery
mechanisms to children, girls, women and other vulnerable groups.
“Most of the challenges in the country are education related and the five-year project is aimed at reversing the ugly trend.”
The World Bank official, however, expressed satisfaction with the
efforts so far made by Tambuwal to move the education sector forward in
the state.
Adekola lauded the state for allocating about 27 per cent of its annual budget to education in 2016 and 2017 fiscal years.
“The state government also deserves a pat on the back for ensuring the prompt payment of teachers’ salaries,” he said.
“We have also noted an unlimited appetite by parents in the state for the education of their children.”
Responding, Governor Tambuwal promised to sustain the existing partnership between the bank and the state government.
“We will continue to honour our own side of commitments to such agreements in terms of finances and other issues.
“We have begun the process of creating an agency to be in charge of the education of the girl-child.
“We will ensure the effective utilization of the funds, to avoid any infractions,” the governor said.
Sunday, 26 February 2017
Forex Intervention: CBN Disburses $221.37m for BTA, School Fees, Others
The Central Bank of Nigeria (CBN) says it has sold 221.37 million
dollars to 16 banks through the interbank foreign exchange (forex)
market.
The apex bank disclosed this in its Forex Forward Sales Report on the
second wholesale intervention, obtained by the News Agency of Nigeria
on Sunday in Abuja.
It said that the move was to enable the banks meet demand for Basic
Transport Allowance (BTA), school fees and medicals by customers and to
ease the stress of genuine customers in obtaining foreign currencies.
The bank said 10 banks accessed 162.8 million dollars at a qualified bid
for the United States dollars, ranging from N330 to N360 per dollar on a
30 days tenour, adding that it would mature on March 27.
‘’For the 60 days tenour, six banks qualified to access 58.52 million
dollars with bids for the United States dollars ranging from N315 to
N320.5 per dollar meant to mature on March 25, 2017.
‘’CBN recently unveiled a new policy action to make forex readily
available for personal and business travels, medicals and school fees,’’
it said.
CBN further said that it injected 370.9 million dollars into the
interbank market, through forward sales to 23 banks at a qualified bid
ranging from N315 to N360 per dollar.
The apex bank also disclosed that it made spot sales of 6 million
dollars to four banks and sold 35 million for the payment of school
fees, medicals and BTA.
NAN reports that about 24 hours after the announcement of the new
policy, the naira firmed up at the black market from about N520 to a
dollar down to the current exchange rate of N440 to a dollar as at
Sunday.
Market analysts believe that the dollar will continue to fall until
it stabilises at an average exchange rate of about N400 to a dollar.
Mr Emmanuel Ukeje, the Special Adviser to CBN Governor on Financial
Markets, said the new foreign exchange policy would help strengthen the
value of naira in the market.
Ukeje further said that to make foreign exchange readily accessible
to customers, CBN had also eliminated stiff conditions in applying for
BTA in banks.
“The central bank has waved tax clearance provision in accessing these funds,however, your journey must originate from Nigeria.
“You cannot leave overseas and buy BTA to travel. You must have a
valid ticket to travel with and a bank account as well as BVN to be
recognised as a bank account holder.
“A person is entitled to basic traveling allowance every quarter and
not more than 4,000 dollars and it is only those who are 18 years and
above that can access it,” he said.
Wednesday, 22 February 2017
Naira devaluation looms in spite of Buhari’s opposition
Traders increased bets that Nigeria will allow the naira to weaken
after the central bank eased some capital controls and President
Muhammadu Buhari, who opposes devaluation, extended his sick leave in
the U.K.
Forward contracts rose to the highest level since November after the
Central Bank of Nigeria said it would “increase the efficiency of the
foreign-exchange market” and make hard currency available to Nigerians
needing to fund business trips and overseas school and medical bills.
The regulator also announced the sale of $500 million of dollar
forwards.
Buhari is in London receiving treatment for an unspecified condition
after traveling there for medical tests on Jan. 19. The 74-year-old, who
has likened a depreciation of the naira to “murder,” handed power to
his vice president, Yemi Osinbajo, before departing and was initially
scheduled to return on Feb. 5. Buhari was also out the country with
Osinbajo in charge when Nigeria allowed its currency to weaken in
mid-2016.
“Tests showed he needed a longer period of rest, necessitating the
president staying longer than originally planned,” presidential
spokesman Femi Adesina said in an e-mailed statement Tuesday, without
explaining what Buhari’s illness is or when he’ll be back. “There is no
cause for worry.”
Buhari’s absence is heightening concern about government paralysis at
a time when the oil-dependent economy is in recession and the stock
market is near a 10-month low. Still, investors are betting that a more
flexible currency regime is at hand.
Naira forward contracts maturing in three months rose 3.9 percent to
371 against the dollar on Tuesday, the highest close since Nov. 11 and
suggesting the currency will depreciate about 15 percent in that period
from 315.5. Six-month contracts climbed to 396.5, while the black-rate
market rate strengthened to 515 on Wednesday from 520 earlier this week.
The Central Bank of Nigeria said Monday it would sell dollars to
people needing to pay for medical and school fees abroad at a rate of as
much as 20 percent above the spot price, or roughly 370 against the
greenback.
Forward Sales
The measures were part of “efforts to increase the availability of foreign exchange in order to ease the difficulties encountered by Nigerians,” the Abuja-based regulator said.
The measures were part of “efforts to increase the availability of foreign exchange in order to ease the difficulties encountered by Nigerians,” the Abuja-based regulator said.
The central bank this week sold $371 million of 30-day and 60-day
forwards to banks, almost $130 million less than it offered. The exchange rates ranged from 315 naira to
360 naira per dollar.
This week’s moves are positive for foreign investors and are probably
aimed at accessing funding from the World Bank, Ayomide Mejabi, an
analyst at the Nigerian unit of Standard Bank Group Ltd., said in a note
to clients.
“Full liberalization is still some way off” but it may be “one of a
few steps on the road to a lot more flexibility” and helping to clear a
$5.5 billion backlog of demand for dollars, he said.
Nigeria’s Senate President Bukola Saraki visited Buhari at the
country’s High Commission in London twice last week, according to the
presidency, sparking concern about the severity of his condition. The
uncertainty reminds Nigerians of President Umaru Musa Yar’Adua, who flew
to Saudi Arabia for medical treatment in November 2009 and was never
seen in public again, dying six months later.
To avoid a power vacuum similar to the one Yar’Adua’s absence
created, Buhari got lawmakers’ approval to transfer all executive powers
to his deputy, Yemi Osinbajo, before leaving for the U.K.
CBN intervenes positively with $370.9 million in Foreign Exchange Market
Sequel to its promise to ease the difficulties encountered by Nigerians in obtaining funds for Foreign Exchange transactions, the Central Bank of Nigeria (CBN) on Tuesday, February 21, 2017, carried out wholesale interventions in the interbank FOREX market by providing a total sum of $370,810,810.79 to 23 banks to meet the visible and invisible requests of customers.
A source at the CBN disclosed that the qualified bids for the United States dollars ranged from N315 to N360, adding that seven banks received full allotments of their respective bids valued at $37,500,000 each. Other banks received allotments ranging from $46, 512.50 to $15,578,081.51.
Confirming the information, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said the Bank’s intermediation in the Forex market was the first wholesale intervention aimed at easing the pressure of access to forex by Nigerians who intend to meet obligations that fall under visible and invisible needs categories.
He further explained that the CBN offered $500,000,000.00 for sale to the banks, but not all of them provided enough naira backing to pay fully for their respective bid amounts.
While expressing optimism that the wholesale intervention of the CBN would substantially ease the foreign exchange pressure on visible and invisible needs of customers, Okorafor assured that the Bank would continue to make interventions based on qualified bids from the banks on the requests of their customers.
He reiterated that the Bank was more than ever ready to support the inter-bank market by ensuring liquidity and transparency to guarantee efficiency in the Forex market.
Okorafor therefore urged all market participants to contribute their patriotic quota and assist in ensuring that the new measures put in place by the CBN guarantee the steadiness of the financial market as well as the growth and development of the economy to the benefit of all Nigerians.
It will be recalled that the CBN, after a meeting with Deposit Money Banks (DMBs) last Friday, issued new policy actions on FOREX aimed at easing access to foreign exchange for Personal and Business Travel as well as educational and medical fees, among others.
As part of its new policy action, the CBN also directed all banks in the country to open forex retail outlets at major airports as soon as logistics permit them to do such.
Meanwhile, a breakdown of the forwards indicates that $216,465,671.02 was for 30 days, while $154,345,139.77 is for 60 days. The CBN also on Tuesday, February 21, 2017, made spot sales of $1.5 million to four banks, totaling $6 million. The Bank also offered $41 million for sales out of which $35 million was taken up for the payment of school fees, medical bills and personal and business travel allowances.
Tuesday, 21 February 2017
Nigeria will not be Borrowing a Penny from IMF – Finance Minister, Kemi Adeosun
The government will instead be be pursuing its own economic reform plan to save the economy from recession.
“For us the IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per say, it has a fiscal problem,” Adeosun told CNBC in an interview.
“We are already doing as much reform as any IMF programme would impose on Nigeria,” she said. “Nigerians want to take responsibility for their future. We must have our home-grown, home-designed programme of reform.”
Adeosun said non-oil revenues were improving while the government was fine-tuning an economic reform plan needed to support an application for a loan of at least $1 billion from the World Bank. It is also seeking further funds from the African Development Bank.
“Non-oil revenue is improving very steadily. All the measures we have put in place are beginning to yield fruits,” she said, without giving numbers.
“Oil production is back up, we are very grateful for that, but we should be careful for getting excited about that.”
Recall that officials said recently that Nigeria plans to finalise its proposal to the World Bank this month.
The country needs to plug a gap in its record 7.3 trillion naira ($23.17 billion) 2017 budget, which contains a number of measures aimed at stimulating the economy.
It had initially promised to submit an economic plan to the World Bank by the end of December but did not do so.
Ekeopara Modestus
Nigeria Plans 310 BLN Naira Treasury Bills Auction on March 1
It plans to raise 26.14 billion naira in three-month debt, 62 billion in six-month bills and 222.08 billion in one-year notes, using a Dutch auction system. Payment will be due the day after the auction.
Nigeria's central bank issues treasury bills twice a month to finance the budget deficit, help manage commercial lenders' liquidity and curb rising inflation.
Annual inflation in Nigeria climbed to 18.72 percent in January, its 12th straight monthly rise. The trend was worsened by dollar shortages, which have crippled the import-dependent economy and triggered the first recession in 25 years.
The government is also facing funding challenges due to the low price of oil. It expects the budget deficit to widen to 2.36 trillion naira this year as it tries to spend its way of out of the recession.
More than half of the deficit will be funded through local borrowing, the government has said.
($1 = 315 naira)
Ekeopara Modestus
Monday, 20 February 2017
CBN Finally Bows, Reviews Forex Policy
Central Bank of Nigeria, CBN, has released some amendments to the current foreign exchange policy.
In a statement on Monday by its Acting Director of Corporate Communications, Isaac Okorafor, the CBN listed major areas it intends to make changes.
Such includes the sale of foreign exchange by Deposit Merchant Banks at international airports to travelers, provision of travel allowances for personal and business purposes and for school and medical purposes.
The statement by Okorafor reads in full:
“New Policy Actions in the Foreign Exchange Market
In continuation of efforts to increase the availability of Foreign Exchange in order to ease the difficulties encountered by Nigerians in obtaining funds for Foreign Exchange transactions, the Central Bank of Nigeria (CBN) is providing direct additional funding to banks to meet the needs of Nigerians for Personal and Business Travel, Medical needs, and School fees, effective immediately. The CBN expects such retail transactions to be settled at a rate not exceeding 20 percent above the interbank market rate.
A. Travel Allowances
Having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, the CBN would immediately begin to provide foreign exchange to all commercial banks to meet the needs of both personal travel allowances (PTA) and business travel allowances (BTA) for onward sale to customers. All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.
B. School and Medical Fees
Similarly, the CBN would meet the needs of parents, guardians and sponsors who are seeking to make payments of school and educational fees for their children and wards. Such payments must be made by commercial banks directly to the institution specified by the customer. The CBN would ensure that this process is as smooth as possible and that as many customers as possible get the foreign exchange they genuinely demand. This would also apply to customers seeking to make payments, or purchase foreign exchange, for medical bills and paid directly to hospitals. The supply of FX to retail end-users (PTA, BTA, School fees, medical bills, etc) would be sustained by the CBN.
C. Forward Sales Tenor
In order to further increase the availability of foreign exchange to all end-users, the CBN has decided to significantly reduce the tenor of its forward sales from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction.
D. FX Sales at Major Airports
In order to further ease the burden of travellers and ensure that transactions are settled at much more competitive exchange rates, the CBN hereby directs all banks to open FX retail outlets at major airports as soon as logistics permit.
E. Increase Efficiency of FX Market
In order to maintain confidence in the FX market, the CBN will immediately take the following steps:
a. Begin implementing its articulated program to clear all the unfilled orders in the interbank FX market;
b. Given our plan to meet all unfilled orders, and while provision of FX to the manufacturing sector would remain the CBN’s strong priority, we will no longer impose allocation/utilization rules on commercial banks;
c. Implement an effective intervention programme to support the inter-bank market to ensure adequate liquidity necessary to deliver an efficient FX market;
d. Advise FMDQ to activate its FX Order-Book systems as soon as possible and also accelerate the on-boarding of FX clients on the FX Relationship Systems to ensure total transparency of the FX market.”
In a statement on Monday by its Acting Director of Corporate Communications, Isaac Okorafor, the CBN listed major areas it intends to make changes.
Such includes the sale of foreign exchange by Deposit Merchant Banks at international airports to travelers, provision of travel allowances for personal and business purposes and for school and medical purposes.
The statement by Okorafor reads in full:
“New Policy Actions in the Foreign Exchange Market
In continuation of efforts to increase the availability of Foreign Exchange in order to ease the difficulties encountered by Nigerians in obtaining funds for Foreign Exchange transactions, the Central Bank of Nigeria (CBN) is providing direct additional funding to banks to meet the needs of Nigerians for Personal and Business Travel, Medical needs, and School fees, effective immediately. The CBN expects such retail transactions to be settled at a rate not exceeding 20 percent above the interbank market rate.
A. Travel Allowances
Having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, the CBN would immediately begin to provide foreign exchange to all commercial banks to meet the needs of both personal travel allowances (PTA) and business travel allowances (BTA) for onward sale to customers. All banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.
B. School and Medical Fees
Similarly, the CBN would meet the needs of parents, guardians and sponsors who are seeking to make payments of school and educational fees for their children and wards. Such payments must be made by commercial banks directly to the institution specified by the customer. The CBN would ensure that this process is as smooth as possible and that as many customers as possible get the foreign exchange they genuinely demand. This would also apply to customers seeking to make payments, or purchase foreign exchange, for medical bills and paid directly to hospitals. The supply of FX to retail end-users (PTA, BTA, School fees, medical bills, etc) would be sustained by the CBN.
C. Forward Sales Tenor
In order to further increase the availability of foreign exchange to all end-users, the CBN has decided to significantly reduce the tenor of its forward sales from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction.
D. FX Sales at Major Airports
In order to further ease the burden of travellers and ensure that transactions are settled at much more competitive exchange rates, the CBN hereby directs all banks to open FX retail outlets at major airports as soon as logistics permit.
E. Increase Efficiency of FX Market
In order to maintain confidence in the FX market, the CBN will immediately take the following steps:
a. Begin implementing its articulated program to clear all the unfilled orders in the interbank FX market;
b. Given our plan to meet all unfilled orders, and while provision of FX to the manufacturing sector would remain the CBN’s strong priority, we will no longer impose allocation/utilization rules on commercial banks;
c. Implement an effective intervention programme to support the inter-bank market to ensure adequate liquidity necessary to deliver an efficient FX market;
d. Advise FMDQ to activate its FX Order-Book systems as soon as possible and also accelerate the on-boarding of FX clients on the FX Relationship Systems to ensure total transparency of the FX market.”
CBN Demands Foreign Exchange Outlets at Airports
To ease
the burden of travellers, the Central Bank of Nigeria (CBN) has directed
all banks to open Foreign Exchange outlets to sell dollars and other
hard currencies at major airports.
According
to a statement signed on Monday by the CBN acting Director of
Communications, Mr Isaac Okorafor, the banks are to do so as soon as
logistics permit.
Okorafor said that this would also ensure that transactions were settled at much more competitive exchange rates.
“Similarly,
the CBN is providing direct additional funding to banks to meet the
needs of Nigerians for Personal and Business Travel, Medical needs, and
School fees, effective immediately.
“For
medical and school fees, such payments must be made by commercial banks
directly to the institution specified by the customer.
“The CBN
would ensure that this process is as smooth as possible and that as many
customers as possible get the foreign exchange they genuinely demand.
“The CBN
expects such retail transactions to be settled at a rate not exceeding
20 percent above the interbank market rate,” he said.
Okorafor
said that the apex bank had also reduced the tenure of its Forward Sales
from the current maximum cycle of 180 days, to not more than 60 days
from the date of transactions.
“In order
to maintain confidence in the FX market, the CBN will immediately begin
implementing its articulated programme to clear all the unfilled orders
in the interbank FX market.
“Given
our plan to meet all unfilled orders, and provision of FX to the
manufacturing sector would remain the CBN’s strong priority, we will no
longer impose allocation rules on commercial banks.
“We will
implement an effective intervention programme to support the inter-bank
market to ensure adequate liquidity necessary to deliver an efficient FX
market,” he said.
Okorafor
said that the FMDQ trading had also been advised to activate its Foreign
Exchange Order-Book systems as soon as possible and also accelerate the
onboarding of FX clients on the FX Relationship Systems to ensure total
transparency of the FX market.
The apex bank urged market participants
to assist in ensuring that these new measures were followed to preserve
the external reserves, the stability of the financial system and
economic growth for the benefit of all Nigerians.
Thursday, 16 February 2017
De Economist: Nigeria Economic Outlook 2017
De Economist: Nigeria Economic Outlook 2017: The Nigerian economy is set to have closed 2016 with its worst economic performance in over 20 years as militant attacks on oil infrastruct...
Nigeria Economic Outlook 2017
The Nigerian economy is set to have closed 2016 with its worst economic
performance in over 20 years as militant attacks on oil infrastructure,
tight liquidity in the FX market and depressed private consumption
dented growth. Although economic activity likely hit its trough in Q3,
the latest leading indicators suggest that conditions remain extremely
challenging. Government data show that the fiscal deficit widened in the
first half of 2016 on lower oil earnings and non-oil tax revenues. This
trend is set to worsen under the recently approved 2017 budget, which
plans to increase expenditure, while the projection of a boost in oil
output to 2.2 million barrels per day is considered unrealistic by
critics. The bill envisages keeping the exchange rate unchanged at 305
NGN per USD, a rate far lower than the one traded on the parallel
market, suggesting that pressure will continue mounting on the currency.
The economy is expected to rebound in 2017 after last year’s contraction. The recovery, however, is fragile and depends mostly upon policy action by the government. Analysts consider that a further devaluation of the naira is key to attract investment into the economy and support domestic demand. Panelists participating in the FocusEconomics Consensus Forecast project that the economy will grow 1.3% in 2017, which is down 0.1 percentage points from last month’s forecast. They foresee a 3.0% expansion in 2018.
At its 23–24 January monetary policy meeting, all members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) decided to leave the monetary policy rate and all other monetary policy mechanisms unchanged, meeting market expectations.
The Central Bank based its decision on the latest developments in the domestic economy and abroad. The latest data show that the economy is in deep recession and inflationary pressures remain strong. While rising commodity prices are expected to give short-term respite to the country’s battered public finances, the medium-term outlook remains beset by stagnation and uncertainty concerning global trade, investment inflows and political developments abroad.
The CBN stressed that the problems afflicting the economy such as low fiscal activity, a scarcity of foreign exchange, high energy prices and unpaid salaries can only be resolved by a commitment from the fiscal authorities and not by monetary policy. The Committee considers it would be imprudent to cut the rate, since it would “worsen the inflationary conditions and undermine the current outlook for stability in the foreign exchange market.” They also consider that such a move would be untimely since it would undermine aggregate demand, reduce existing income levels and stave off investment.
Against this backdrop, the MPC voted unanimously to leave the monetary policy rate unchanged at 14.00% and the liquidity ratio at 30.00%. The Committee also left the asymmetric corridor of plus 200 and minus 500 basis points around the key rate unchanged and the Cash Reserve Requirements at 22.50%.
The next Central Bank meeting is to be held on 20 and 21 March.
FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2017 at 12.88%. In 2018, the panel sees the monetary policy rate rising and ending the year at 11.83%.
The economy is expected to rebound in 2017 after last year’s contraction. The recovery, however, is fragile and depends mostly upon policy action by the government. Analysts consider that a further devaluation of the naira is key to attract investment into the economy and support domestic demand. Panelists participating in the FocusEconomics Consensus Forecast project that the economy will grow 1.3% in 2017, which is down 0.1 percentage points from last month’s forecast. They foresee a 3.0% expansion in 2018.
At its 23–24 January monetary policy meeting, all members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) decided to leave the monetary policy rate and all other monetary policy mechanisms unchanged, meeting market expectations.
The Central Bank based its decision on the latest developments in the domestic economy and abroad. The latest data show that the economy is in deep recession and inflationary pressures remain strong. While rising commodity prices are expected to give short-term respite to the country’s battered public finances, the medium-term outlook remains beset by stagnation and uncertainty concerning global trade, investment inflows and political developments abroad.
The CBN stressed that the problems afflicting the economy such as low fiscal activity, a scarcity of foreign exchange, high energy prices and unpaid salaries can only be resolved by a commitment from the fiscal authorities and not by monetary policy. The Committee considers it would be imprudent to cut the rate, since it would “worsen the inflationary conditions and undermine the current outlook for stability in the foreign exchange market.” They also consider that such a move would be untimely since it would undermine aggregate demand, reduce existing income levels and stave off investment.
Against this backdrop, the MPC voted unanimously to leave the monetary policy rate unchanged at 14.00% and the liquidity ratio at 30.00%. The Committee also left the asymmetric corridor of plus 200 and minus 500 basis points around the key rate unchanged and the Cash Reserve Requirements at 22.50%.
The next Central Bank meeting is to be held on 20 and 21 March.
FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2017 at 12.88%. In 2018, the panel sees the monetary policy rate rising and ending the year at 11.83%.
Wednesday, 15 February 2017
De Economist: Nigeria not sure yet how much to borrow from World...
De Economist: Nigeria not sure yet how much to borrow from World...: Feb 15 Nigeria has not decided yet how much it wants to borrow from the World Bank, its budget minister said on Wednesday, to help pay for r...
Nigeria not sure yet how much to borrow from World Bank -minister
Feb 15 Nigeria has not decided yet how
much it wants to borrow from the World Bank, its budget minister
said on Wednesday, to help pay for record spending of $24
billion this year.
Diplomats and officials told Reuters last week the oil producer plans to present the required economic reform proposals to the World Bank this month to borrow at least $1 billion.
"The figure will depend on the (2017) budget approved by the National Assembly," Udoma Udo Udoma, minister for budget and national planning, told reporters when asked about the application.
"We are waiting for the passage of the budget by the National Assembly so that we will know the budget gap or the actual deficit before we can go to the World Bank for loan."
Nigeria, which relies on oil revenue for most of its income, is struggling to drag itself out of its first recession for 25 years. It needs to plug a gap in its record 7.3 trillion naira 2017 budget aimed at stimulating the economy.
It had planned to apply for a World Bank loan last year but the process ground to a halt because it failed to submit its economic recovery plans by the end of December as initially promised, sources told Reuters last month.
The African Development Bank (AfDB) has been holding back the second, $400 million, tranche of a $1 billion loan because it is also awaiting a reform plan from the government.
Nigeria will present its economic proposals to the AfDB at the same time as the World Bank, government officials said last week.
Diplomats and officials told Reuters last week the oil producer plans to present the required economic reform proposals to the World Bank this month to borrow at least $1 billion.
"The figure will depend on the (2017) budget approved by the National Assembly," Udoma Udo Udoma, minister for budget and national planning, told reporters when asked about the application.
"We are waiting for the passage of the budget by the National Assembly so that we will know the budget gap or the actual deficit before we can go to the World Bank for loan."
Nigeria, which relies on oil revenue for most of its income, is struggling to drag itself out of its first recession for 25 years. It needs to plug a gap in its record 7.3 trillion naira 2017 budget aimed at stimulating the economy.
It had planned to apply for a World Bank loan last year but the process ground to a halt because it failed to submit its economic recovery plans by the end of December as initially promised, sources told Reuters last month.
The African Development Bank (AfDB) has been holding back the second, $400 million, tranche of a $1 billion loan because it is also awaiting a reform plan from the government.
Nigeria will present its economic proposals to the AfDB at the same time as the World Bank, government officials said last week.
Nigerian Economy Lost Up To $100 Billion From Terrorist Attacks In 2016
Emmanuel Ibe Kachikwu, Nigeria’s
Minister of Petroleum Resources, stated that his country lost from $50 to $100
billion of potential revenue from crude oil
production in 2016.
From 1.757 million barrels per day in
January 2016, production declined to 1.1 million bpd in August as the Delta
Avengers hit oil pipelines and other infrastructure in the Niger River Delta.
Aside from direct losses associated with falling oil production and costs for
refurbishing the pipelines and rigs, the instability in Nigeria’s oil-bearing
areas led to a decline in investments into the country.
However, Minister Kachikwu remains
optimistic. A lot of hope is placed in the Nigerian government’s plan, which is
aimed at putting an end to decades of civil strife in the Niger Delta by
investing in the social sector and infrastructure.
“We need to pull the people out of
conflict and place them in schools,” Kachikwu says.
Niger River Delta isn’t the only area
that Nigerian higher-ups are interested in improving. As part of President
Buhari’s policy of diversifying Nigeria’s economy, the Ajaokuta
steel plant project, which began in 1979 under Soviet sponsorship
and remained stagnant since the 90’s, could finally see completion.
But back to the Niger Delta, a
ceasefire has been reached with the Delta Avengers in August 2016. This
provided the Nigerian authorities room to recover lost crude oil production
levels. As a matter of fact, Nigeria was going for 2.2 million barrels per day
in December, but fell short with 1.94 million bpd (according to official data)
by year-end, which was still sizable growth from the year’s lowest point.
However, secondary sources indicate that Nigeria’s December production amounted
to just 1.54 million bpd, as stated in the OPEC monthly report.
Still, no matter which data you find
more to your liking, Nigeria could see its oil production increase further in
2017, as the OPEC member was exempted from the need to cut its output under the
OPEC deal, so that the country could use the extra revenues to mend its
struggling economy. According to the deal’s quotas, Nigeria is allowed to
produce no more than 2.2 million barrels per day during the first six months of
this year.
Monday, 13 February 2017
De Economist: Why Nigeria is in Recession – EFCC boss, Magu
De Economist: Why Nigeria is in Recession – EFCC boss, Magu: By Ekeopara Modestus The acting chairman of the Economic and Financial Crimes Commission, EFCC, Ibrahim Magu, has identified corruption ...
Why Nigeria is in Recession – EFCC boss, Magu
By Ekeopara Modestus
The acting chairman of the Economic and Financial Crimes Commission, EFCC, Ibrahim Magu, has identified corruption as the reason behind Nigeria’s recession.
He said the current economic situation of the country was why the federal government was paying a lot of attention to the recovery of stolen funds.
“I maintain that the economic recession is caused by corruption,” Magu told Reporters.
“About 90 per cent of the cause of recession is corruption, because there was fund and people stole the funds and kept them where they cannot be reached.
“If we can lay hands on this hidden wealth, we won’t stay for more than three months in this recession. It is sufficient for us to get out of economic recession”, he added.
Magu advised those still holding looted money to voluntarily return such.
“I think they should just come out and approach the government and
say, ‘this is what I have.’ Our emphasis now is on the recovery of the
looted fund. People should come out and give us full disclosure, we
would go after it”, he added.
On possible amnesty for looters, he said, “I’m not sure of that. But we encourage recovery if you can voluntarily bring out this thing, disclose this thing. It is the government that would decide. We encourage people to come out and disclose the looted funds.
“They should cooperate with the government. They should come forward and declare what they have looted and the government will take its decision.
“Everybody must join in the fight against corruption. It’s very necessary for the future of this country, for a better tomorrow.”
The acting chairman of the Economic and Financial Crimes Commission, EFCC, Ibrahim Magu, has identified corruption as the reason behind Nigeria’s recession.
He said the current economic situation of the country was why the federal government was paying a lot of attention to the recovery of stolen funds.
“About 90 per cent of the cause of recession is corruption, because there was fund and people stole the funds and kept them where they cannot be reached.
“If we can lay hands on this hidden wealth, we won’t stay for more than three months in this recession. It is sufficient for us to get out of economic recession”, he added.
Magu advised those still holding looted money to voluntarily return such.
On possible amnesty for looters, he said, “I’m not sure of that. But we encourage recovery if you can voluntarily bring out this thing, disclose this thing. It is the government that would decide. We encourage people to come out and disclose the looted funds.
“They should cooperate with the government. They should come forward and declare what they have looted and the government will take its decision.
“Everybody must join in the fight against corruption. It’s very necessary for the future of this country, for a better tomorrow.”
Sunday, 12 February 2017
Full Breakdown Of Nigeria’s ‘2017 Budget Of Recovery And Growth’
1. It is my pleasure to present the 2017 Budget Proposals to this
distinguished Joint Assembly: the Budget of Recovery and Growth.
.
.
.
2017 Budget Priorities
35. Let me now turn to 2017 Budget.Government’s priorities in 2017 will be a continuation of our 2016 plans but adjusted to reflect new additions made in the Economic Recovery and Growth Plan. In order to restore growth, a key objective of the Federal Government will be to bring about stability and greater coherence between monetary, fiscal and trade policies while guaranteeing security for all.
36. The effort to diversify the economy and create jobs will continue with emphasis on agriculture, manufacturing, solid minerals and services. Mid- and Down-stream oil and gas sectors,are also key priority areas. We will prioritise investments in human capital development especially in education and health, as well as wider social inclusion through job creation, public works and social investments.
37. Our plans also recognise that success in building a dynamic, competitive economy depends on construction of high quality national infrastructure and an improved business environment leveraging locally available resources. To achieve this, we will continue our goal of improving governance by enhancing public service delivery as well as securing life and property.
The 2017 Budget: Assumptions, Revenue Projections and Fiscal Deficit
38. Distinguished members of the National Assembly, the 2017 Budget is based on a benchmark crude oil price of US$42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.
39. Based on these assumptions, aggregate revenue available to fund the federal budget is N4.94 trillion. This is 28% higher than 2016 full year projections. Oil is projected to contribute N1.985 trillion of this amount.
40. Non-oil revenues, largely comprising Companies Income Tax, Value Added Tax, Customs and Excise duties, and Federation Account levies are estimated to contribute N1.373 trillion. We have set a more realistic projection of N807.57 billion for Independent Revenues, while we have projected receipts of N565.1 billion from various Recoveries. Other revenue sources, including mining, amount to N210.9 billion.
41. With regard to expenditure, we have proposed a budget size of N7.298 trillion which is a nominal 20.4% increase over 2016 estimates. 30.7% of this expenditure will be capital in line with our determination to reflate and pull the economy out of recession as quickly as possible.
42. This fiscal plan will result in a deficit of N2.36 trillion for 2017 which is about 2.18% of GDP. The deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion. Our intention is to source N1.067 trillion or about 46% of this borrowing from external sources while, N1.254 trillion will be borrowed from the domestic market.
Expenditure Estimates
43. The proposed aggregate expenditure of N7.298 trillion will comprise:
i. Statutory transfers of N419.02 billion;
ii. Debt service of N1.66 trillion;
iii. Sinking fund of N177.46 billion to retire certain maturing bonds;
iv. Non-debt recurrent expenditure of N2.98 trillion; and
v. Capital expenditure of N2.24 trillion (including capital in Statutory Transfers).
Statutory Transfers
44. We have increased the budgetary allocation to the Judiciary from N70 billion to N100 billion. This increase in funding is further meant to enhance the independence of the judiciary and enable them to perform their functions effectively.
Recurrent Expenditure
45. A significant portion of recurrent expenditure has been provisioned for the payment of salaries and overheads in institutions that provide critical public services. The budgeted amounts for these items are:
· N482.37 billion for the Ministry of Interior;
· N398.01 billion for Ministry of Education;
· N325.87 billion for Ministry of Defence; and
· N252.87 billion for Ministry of Health.
46. We have maintained personnel costs at about N1.8 trillion.It is important that we complete the work that we have started of ensuring the elimination of all ghost workers from the payroll. Accordingly, adequate provision has been made in the 2017 Budget to ensure all personnel that are not enrolled on the Integrated Personnel Payroll Information System platform are captured.
47. We have tasked the Efficiency Unit of the Federal Ministry of Finance to cut certain overhead costs by 20%. We must eliminate all non-essential costs so as to free resources to fund our capital expenditure.
Capital Expenditure
48. The size of the 2017 capital budget of N2.24 trillion (inclusive of capital in Statutory Transfers), or 30.7% of the total budget, reflects our determination to spur economic growth. These capital provisions are targeted at priority sectors and projects.
49. Specifically, we have maintained substantially higher allocations for infrastructural projects which will have a multiplier effect on productivity, employment and also promote private sector investments into the country.
50. Key capital spending provisions in the Budget include the following:
• Power, Works and Housing: N529billion;
• Transportation: N262 billion;
• Special Intervention Programmes: N150 billion.
• Defence: N140 billion;
• Water Resources: N85 billion;
• Industry, Trade and Investment: N81 billion;
• Interior: N63 billion;
• Education N50 billion
• Universal Basic Education Commission: N92 billion
• Health: N51 billion
• Federal Capital Territory: N37 billion;
• Niger Delta Ministry: N33 billion; and
• Niger Delta Development Commission: N61 billion;
51. N100 billion has been provided in the Special Intervention programme as seed money into the N1 trillion Family Homes Fund that will underpin a new social housing programme. This substantial expenditure is expected to stimulate construction activity throughout the country.
52. Efforts to fast-track the modernization of our railway system will receive further boost through the allocation of N213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos,Ajaokuta-Itakpe-Warri railway, and Kaduna-Abuja railway projects. As I mentioned earlier, in 2016, we invested a lot of time ensuring the paper work is done properly while negotiating the best deal for Nigeria. I must admit this took longer than expected but I am optimistic that these projects will commence in 2017 for all to see.
53. Given the emphasis placed on industrialization and supporting SMEs, a sum of N50 billion has been set aside as Federal Government’s contribution for the expansion of existing, as well as the development of new, Export Processing and Special Economic Zones. These will be developed in partnership with the private sector as we continue our efforts to promote and protect Nigerian businesses. Furthermore, as the benefits of agriculture and mining are starting to become visible, I have instructed that the Export Expansion Grant be revived in the form of tax credits to companies. This will further enhance the development of some agriculture and mining sector thereby bringing in more investments and creating more jobs. The sum of N20 billion has been voted for the revival of this program.
54. Our small- and medium-scale businesses continue to face difficulties in accessing longer term and more affordable credit. To address this situation, a sum of N15 billion has been provided for the recapitalization of the Bank of Industry and the Bank of Agriculture. In addition, the Development Bank of Nigeria will soon start operations with US$1.3 billion focused exclusively on Small and Medium-Sized Enterprises.
55. Agriculture remains at the heart of our efforts to diversify the economy and the proposed allocation to the sector this year is at a historic high of N92 billion. This sum will complement the existing efforts by the Federal Ministry of Agriculture and CBN to boost agricultural productivity through increased intervention funding at single digit interest rate under the Anchor Borrowers Programme, commercial agricultural credit scheme and The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending.Accordingly, our agricultural policy will focus on the integrated development of the agricultural sector by facilitating access to inputs, improving market access, providing equipment and storage as well as supporting the development of commodity exchanges.
56. Government realizes that achieving its goals with regard to job creation, also requires improving the skills of our labour force, especially young people. We have accordingly made provision, including working with the private sector and State Governments, to establish and operate model technical and vocational education institutes.
57. We propose with regard to healthcare to expand coverage through support to primary healthcare centres and expanding the National Health Insurance Scheme.
58. The 2017 Budget estimates retains the allocation of N500 billion to the Special Intervention programme consisting of the Home-grown School Feeding Programme, Government Economic Empowerment programme, N-Power Job Creation Programme to provide loans for traders and artisans, Conditional Cash Transfers to the poorest families and the new Family Homes Fund (social housing scheme). The N-Power Programme has recently taken off with the employment of 200,000 graduates across the country, while the School Feeding Programme has commenced in a few States, where the verification of caterers has been completed
59. As we pursue economic recovery, we must remain mindful of issues of sustainable and inclusive growth and development. The significant vote for the Federal Ministry of Water Resources reflects the importance attached to integrated water resource management. In this regard, many river-basin projects have been prioritized for completion in 2017. Similarly, the increased vote of N9.52 billion for the Federal Ministry of Environment (an increase of 92% over the 2016 allocation) underscores the greater attention to matters of the environment, including climate change and leveraging private sector funding for the clean-up of the Niger Delta.
60. Provision has also been made in these estimates for activities that will foster a safe and conducive atmosphere for the pursuit of economic and social activities. In this regard, the allocation for the Presidential Amnesty Programme has been increased to N65 billion in the 2017 Budget. Furthermore, N45 billion in funding has been provisioned for the rehabilitation of the North East to complement the funds domiciled at the Presidential Committee on the North East Initiative as well as commitments received from the multinational donors.
Conclusion
61. Mr. Senate President, Mr. Speaker, distinguished and honourable members of the National Assembly, I cannot end without commending the National Assembly for its support insteering our economy on a path of sustained and inclusive growth. This generation has an opportunity to move our country from an unsustainable growth model – one that is largely dependent on oil earnings and imports, to an economy that focuses on using local labour and local raw materials. We cannot afford to let this opportunity slip by. We must all put our differences aside and work together to make this country succeed. The people that voted us into these esteemed positions are looking to us to make a difference. To change the course of this nation. I have no doubt in my mind that by working together, we will put Nigeria back on the path that its founding fathers envisaged.
62. This Budget, therefore, represents a major step in delivering on our desired goals through a strong partnership across the arms of government and between the public and private sectors to create inclusive growth. Implementation will move to centre-stage as we proceed with the process of re-balancing our economy, exiting recession and insulating it from future external and domestic shocks.
https://www.360nobs.com/2016/12/full-breakdown-nigerias-2017-budget-recovery-growth/
.
.
.
2017 Budget Priorities
35. Let me now turn to 2017 Budget.Government’s priorities in 2017 will be a continuation of our 2016 plans but adjusted to reflect new additions made in the Economic Recovery and Growth Plan. In order to restore growth, a key objective of the Federal Government will be to bring about stability and greater coherence between monetary, fiscal and trade policies while guaranteeing security for all.
36. The effort to diversify the economy and create jobs will continue with emphasis on agriculture, manufacturing, solid minerals and services. Mid- and Down-stream oil and gas sectors,are also key priority areas. We will prioritise investments in human capital development especially in education and health, as well as wider social inclusion through job creation, public works and social investments.
37. Our plans also recognise that success in building a dynamic, competitive economy depends on construction of high quality national infrastructure and an improved business environment leveraging locally available resources. To achieve this, we will continue our goal of improving governance by enhancing public service delivery as well as securing life and property.
The 2017 Budget: Assumptions, Revenue Projections and Fiscal Deficit
38. Distinguished members of the National Assembly, the 2017 Budget is based on a benchmark crude oil price of US$42.5 per barrel; an oil production estimate of 2.2 million barrels per day; and an average exchange rate of N305 to the US dollar.
39. Based on these assumptions, aggregate revenue available to fund the federal budget is N4.94 trillion. This is 28% higher than 2016 full year projections. Oil is projected to contribute N1.985 trillion of this amount.
40. Non-oil revenues, largely comprising Companies Income Tax, Value Added Tax, Customs and Excise duties, and Federation Account levies are estimated to contribute N1.373 trillion. We have set a more realistic projection of N807.57 billion for Independent Revenues, while we have projected receipts of N565.1 billion from various Recoveries. Other revenue sources, including mining, amount to N210.9 billion.
41. With regard to expenditure, we have proposed a budget size of N7.298 trillion which is a nominal 20.4% increase over 2016 estimates. 30.7% of this expenditure will be capital in line with our determination to reflate and pull the economy out of recession as quickly as possible.
42. This fiscal plan will result in a deficit of N2.36 trillion for 2017 which is about 2.18% of GDP. The deficit will be financed mainly by borrowing which is projected to be about N2.32 trillion. Our intention is to source N1.067 trillion or about 46% of this borrowing from external sources while, N1.254 trillion will be borrowed from the domestic market.
Expenditure Estimates
43. The proposed aggregate expenditure of N7.298 trillion will comprise:
i. Statutory transfers of N419.02 billion;
ii. Debt service of N1.66 trillion;
iii. Sinking fund of N177.46 billion to retire certain maturing bonds;
iv. Non-debt recurrent expenditure of N2.98 trillion; and
v. Capital expenditure of N2.24 trillion (including capital in Statutory Transfers).
Statutory Transfers
44. We have increased the budgetary allocation to the Judiciary from N70 billion to N100 billion. This increase in funding is further meant to enhance the independence of the judiciary and enable them to perform their functions effectively.
Recurrent Expenditure
45. A significant portion of recurrent expenditure has been provisioned for the payment of salaries and overheads in institutions that provide critical public services. The budgeted amounts for these items are:
· N482.37 billion for the Ministry of Interior;
· N398.01 billion for Ministry of Education;
· N325.87 billion for Ministry of Defence; and
· N252.87 billion for Ministry of Health.
46. We have maintained personnel costs at about N1.8 trillion.It is important that we complete the work that we have started of ensuring the elimination of all ghost workers from the payroll. Accordingly, adequate provision has been made in the 2017 Budget to ensure all personnel that are not enrolled on the Integrated Personnel Payroll Information System platform are captured.
47. We have tasked the Efficiency Unit of the Federal Ministry of Finance to cut certain overhead costs by 20%. We must eliminate all non-essential costs so as to free resources to fund our capital expenditure.
Capital Expenditure
48. The size of the 2017 capital budget of N2.24 trillion (inclusive of capital in Statutory Transfers), or 30.7% of the total budget, reflects our determination to spur economic growth. These capital provisions are targeted at priority sectors and projects.
49. Specifically, we have maintained substantially higher allocations for infrastructural projects which will have a multiplier effect on productivity, employment and also promote private sector investments into the country.
50. Key capital spending provisions in the Budget include the following:
• Power, Works and Housing: N529billion;
• Transportation: N262 billion;
• Special Intervention Programmes: N150 billion.
• Defence: N140 billion;
• Water Resources: N85 billion;
• Industry, Trade and Investment: N81 billion;
• Interior: N63 billion;
• Education N50 billion
• Universal Basic Education Commission: N92 billion
• Health: N51 billion
• Federal Capital Territory: N37 billion;
• Niger Delta Ministry: N33 billion; and
• Niger Delta Development Commission: N61 billion;
51. N100 billion has been provided in the Special Intervention programme as seed money into the N1 trillion Family Homes Fund that will underpin a new social housing programme. This substantial expenditure is expected to stimulate construction activity throughout the country.
52. Efforts to fast-track the modernization of our railway system will receive further boost through the allocation of N213.14 billion as counterpart funding for the Lagos-Kano, Calabar-Lagos,Ajaokuta-Itakpe-Warri railway, and Kaduna-Abuja railway projects. As I mentioned earlier, in 2016, we invested a lot of time ensuring the paper work is done properly while negotiating the best deal for Nigeria. I must admit this took longer than expected but I am optimistic that these projects will commence in 2017 for all to see.
53. Given the emphasis placed on industrialization and supporting SMEs, a sum of N50 billion has been set aside as Federal Government’s contribution for the expansion of existing, as well as the development of new, Export Processing and Special Economic Zones. These will be developed in partnership with the private sector as we continue our efforts to promote and protect Nigerian businesses. Furthermore, as the benefits of agriculture and mining are starting to become visible, I have instructed that the Export Expansion Grant be revived in the form of tax credits to companies. This will further enhance the development of some agriculture and mining sector thereby bringing in more investments and creating more jobs. The sum of N20 billion has been voted for the revival of this program.
54. Our small- and medium-scale businesses continue to face difficulties in accessing longer term and more affordable credit. To address this situation, a sum of N15 billion has been provided for the recapitalization of the Bank of Industry and the Bank of Agriculture. In addition, the Development Bank of Nigeria will soon start operations with US$1.3 billion focused exclusively on Small and Medium-Sized Enterprises.
55. Agriculture remains at the heart of our efforts to diversify the economy and the proposed allocation to the sector this year is at a historic high of N92 billion. This sum will complement the existing efforts by the Federal Ministry of Agriculture and CBN to boost agricultural productivity through increased intervention funding at single digit interest rate under the Anchor Borrowers Programme, commercial agricultural credit scheme and The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending.Accordingly, our agricultural policy will focus on the integrated development of the agricultural sector by facilitating access to inputs, improving market access, providing equipment and storage as well as supporting the development of commodity exchanges.
56. Government realizes that achieving its goals with regard to job creation, also requires improving the skills of our labour force, especially young people. We have accordingly made provision, including working with the private sector and State Governments, to establish and operate model technical and vocational education institutes.
57. We propose with regard to healthcare to expand coverage through support to primary healthcare centres and expanding the National Health Insurance Scheme.
58. The 2017 Budget estimates retains the allocation of N500 billion to the Special Intervention programme consisting of the Home-grown School Feeding Programme, Government Economic Empowerment programme, N-Power Job Creation Programme to provide loans for traders and artisans, Conditional Cash Transfers to the poorest families and the new Family Homes Fund (social housing scheme). The N-Power Programme has recently taken off with the employment of 200,000 graduates across the country, while the School Feeding Programme has commenced in a few States, where the verification of caterers has been completed
59. As we pursue economic recovery, we must remain mindful of issues of sustainable and inclusive growth and development. The significant vote for the Federal Ministry of Water Resources reflects the importance attached to integrated water resource management. In this regard, many river-basin projects have been prioritized for completion in 2017. Similarly, the increased vote of N9.52 billion for the Federal Ministry of Environment (an increase of 92% over the 2016 allocation) underscores the greater attention to matters of the environment, including climate change and leveraging private sector funding for the clean-up of the Niger Delta.
60. Provision has also been made in these estimates for activities that will foster a safe and conducive atmosphere for the pursuit of economic and social activities. In this regard, the allocation for the Presidential Amnesty Programme has been increased to N65 billion in the 2017 Budget. Furthermore, N45 billion in funding has been provisioned for the rehabilitation of the North East to complement the funds domiciled at the Presidential Committee on the North East Initiative as well as commitments received from the multinational donors.
Conclusion
61. Mr. Senate President, Mr. Speaker, distinguished and honourable members of the National Assembly, I cannot end without commending the National Assembly for its support insteering our economy on a path of sustained and inclusive growth. This generation has an opportunity to move our country from an unsustainable growth model – one that is largely dependent on oil earnings and imports, to an economy that focuses on using local labour and local raw materials. We cannot afford to let this opportunity slip by. We must all put our differences aside and work together to make this country succeed. The people that voted us into these esteemed positions are looking to us to make a difference. To change the course of this nation. I have no doubt in my mind that by working together, we will put Nigeria back on the path that its founding fathers envisaged.
62. This Budget, therefore, represents a major step in delivering on our desired goals through a strong partnership across the arms of government and between the public and private sectors to create inclusive growth. Implementation will move to centre-stage as we proceed with the process of re-balancing our economy, exiting recession and insulating it from future external and domestic shocks.
https://www.360nobs.com/2016/12/full-breakdown-nigerias-2017-budget-recovery-growth/
Nigerian Economy Projected to Have Shrunk in 2016
Budget ministry estimates GDP contracted by 1.54%
Nigeria's economy is projected to have contracted 1.54 percent in 2016, according to a budget ministry document, with Africa's most populous country mired in its first recession in a quarter of a century.
Nigeria
is heavily dependent on crude oil exports to fuel its economy, but low global
prices and militant attacks on the southeastern Delta crude oil hub have
hampered those exports and slashed government revenues.
"The
Nigerian economy, in response to both external and internal economic pressures,
inevitably contracted and is currently in recession with a projected growth of
-1.54 percent for 2016," according to the document, which the ministry
released to Reuters on Saturday.
The
budget ministry draft, called "Key issues in the Economic Recovery and Growth
Plan," said the recession was also caused by growth dependent on
consumption rather than investment and "huge leaks in government resources
through corruption and inefficient spending."
The
International Monetary Fund has predicted that Nigeria's economy would shrink
1.8 percent in 2016. Final official figures are due to be released by Nigeria
on February 28.
President
Muhammadu Buhari's government came to power on a pledge to diversify the
economy, fight corruption and tackle the Islamist Boko Haram insurgency in the
northeast.
But
Buhari's critics say the administration has made little headway, with the
economy in recession, corruption still endemic and Boko Haram continuing to
carry out attacks.
Nigeria's
central bank, backed by Buhari, has also kept the naira rate to the dollar at
40 percent above the unofficial - or parallel - market rate, which has dried up
dollar supplies on official channels.
The
government is now formulating an "Economic Recovery and Growth
Plan" for 2017 to 2020.
"First-class
infrastructure and an economic environment that supports the private sector and
enables it to expand, take risk and employ people are essential to achieve
Nigeria's aspirations for a dynamic, competitive economy," the budget
ministry's document on the plan said.
Nigeria
also plans to increase oil production to 2.5 million barrels per day by 2020,
the document said. In January, the vice president said production was 1.7-1.8
million barrels per day.
The
government also wants to improve domestic refineries so that petroleum product
imports can be cut by 60 percent by 2018, said the document.
To
lift growth, the plan will focus on building up Nigeria's agriculture, energy
and small and medium-sized businesses, the document said, adding that the
country aims to have 10 gigawatts of power capacity by 2020.
Of
particular concern is job creation, said the document, as unemployment steadily
rises. The unemployment rate in the third quarter of 2016, the latest for which
there is publicly available data, was 13.9 percent. At the end of 2015, the
rate was 6.4 percent.
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