•Says Macroeconomic Stability Hit 3.01% In 2019Q3 End
State governors and some newly sworn-in cabinet ministers, met Thursday under the aegis of the National Economic Council, with Mrs. Zainab Ahmed, who retained her Finance Ministry portfolio, with additional responsibility for Budget and National Planning, assuring that the Economic Recovery and Growth Plan (ERGP) would remain the basis for the Federal Government’s Medium Term fiscal strategy.
Briefing NEC on the progress of the facility, she detailed how Abuja “has made a total of over N614bn available to 35 States being N175bn each.”
Council, therefore, resolved to “constitute a team from the Nigerian Governors Forum to meet with the CBN (Central Bank of Nigeria) and Ministry of Finance to finalize modalities for commencement of payment.”
She made a presentation to the council at its meeting chaired by Vice President Yemi Osinbajo, on the Medium-Term Expenditure Framework and Medium Term Strategy Paper, according to highlights of the meeting shared by Laolu Akande, Senior Special Assistant to the President on Media and Publicity, Office of the Vice President, on Thursday evening.
Ahmed listed among successes recorded so far, the significant growth and stability since after the recession, with “eight successive quarters of economic growth since the country emerged from recession.”
While affirming the Economic Recovery and Growth Plan (ERGP) as the basis for the Medium Term fiscal strategy, she highlighted that Macro-economic stability has been achieved with growth in end Q3, 2019 at 3.01%; continued increase in Real GDP from 1.89 per cent in Q2, 2018 to 2.01 per cent in 2019; there has been significant growth in non-oil sector.
Other significant economic growth recorded so far, she continued, “include the fact that inflation has continually declined since 2017 from 18.72% to 11.08% in July 2019; the contribution of the non-oil sector to GDP has also increased 90.4% in Q1 2018 to 90.9% in Q1 2019.”
Mrs. Ahmed stressed that unemployment rate stood “at 20.1% at Q3 2018,” stressing the need for further diversification of the economy to boost inclusive growth.
For her, “the draft 2020 – 2022 Medium Term Fiscal framework indicates that Nigeria faces significant medium-term fiscal challenges especially with respect to revenue generation. Therefore there is a need to improve revenue collections and expenditure management.”
She blamed recurring breaches in the network of Nigerian National Petroleum Corporation (NNPC) pipelines partly for the country’s low oil production volume in the first half of 2019.
These among others, the Minister stressed, is why there is “need for a bold decision and urgent action to achieve fiscal sustainability and macro-fiscal objectives.”
President Muhammadu Buhari, she assured council, “is strongly committed to employment generation in this second term.”
Considerable success, the Minister stressed further, “has been recorded in containing insurgency in parts of the North East, with economic activities recovering,” even as “recurring conflicts between farmers and herdsmen, as well as incidences of flooding, has affected agricultural products.”
The council also received updates on its Export Promotion Committee from Jigawa State Governor, Alhaji Mohammed Badaru Abubakar, sequel to the Zero Oil Plan, envisioned in the ERGP, as developed by the Nigeria Export Promotion Council (NEPC).
Key areas noted in the report, included an assurance that its implementation could add a minimum of $150bn more to Nigeria’s foreign reserves; creation of 500,000 jobs yearly; besides lifting 20m Nigerians off poverty, thereby contributing towards attainment of SDG’s “No Poverty,” in line with SDG 8 – “Decent Work and Economic Growth.”
The committee, he said, has designed a plan to implement the project; harmonized Export Development Plan submitted by states; identified projects based on the Implementation Plan and States Submissions; Set-up templates and schematics for Domestic Export Warehouse and Anchor Programme for Exporters.
It also designed a “processing equipment and conducted Capacity Building Programme on Strategic Products in the Zero Oil Plan in Kaduna, Benue, Ondo, Edo, and the Imo States. The products are palm oil, soya beans, and ginger.”
Companies have also been identified to undertake the Domestic Export Warehouse and Aggregation Centre for exportable products, just as he listed other achievements of the Zero Oil Plan to date.
Among these achievements, he continued, is the rise in non-oil exports (excluding natural gas) from U$1.17bn in 2016 to US$3.16bn in 2018, meaning that Strategic sectors identified in the Zero Oil Plan have seen growth.
“For instance, cocoa exports have risen by $79.4m since 2017, while sesame exports have also increased by $153m since 2016 – an increase of more than 100%.”
He also noted the creation of an Export Development Fund through N50bn debenture that offers long-term loan at a single-digit interest rate to qualifying export-oriented projects under the State Export Development Programme and the Anchor exporter scheme. The CBN, he noted, has invested in the fund which would be disbursed by Nigeria Export-Import Bank (NEXIM).
The council was also informed that the balance in the Stabilization Fund Account is N21,729,976,810.66, as at August 20, 2019; while the Natural Resources Development Fund had a balance of N95,896,886,829.69 on that date.
Council also listened to a presentation by Oscar Onyema, Chief Executive of the Nigerian Stock Exchange (NSE). Titled “Financing the next level: Alternative and Innovative Long-term financing for Nigeria’s critical national infrastructure, wherein he recalled that the NSE has supported the country’s growth since independence.
The nation’s capital market, he noted, remains highly connected and is therefore crucial to the country’s economic development, recalling that over the last five years, the federal and state governments have raised N10.3tr in long term capital in the form of Government Bonds.
The capital market, he stressed, offers innovative financing solutions for Nigeria’s $100bn infrastructural challenge, adding that solving Nigeria’s infrastructure challenges remain the panacea for actualizing the country’s full economic potential.
Onyema noted the untapped state investment opportunities in the $1tr global privatization market and N9tr local pension sector, unlocking of which will require “Public-Private Partnerships (PPPs) and Special Purpose Vehicles (SPVs); Infrastructure, Sukuk and Green Bonds; Real Estate Investment Trust (REITs); Refinancing bank debt through capital market instruments; (and) Partnerships with Development Finance Institutions (DFIs) – onshore/Local currency bonds.”