Nigeria’s Economy Stabilising With 8 Successive Quarters Of Growth —Osinbajo
NATIONAL ECONOMIC COUNCIL HIGHLIGHTS
Non-oil sector reports on the rise, as Finance Minister presents MTEF to Council
The macroeconomic environment of the country has shown significant growth and stability since after the recession, according to a report presented today to the National Economic Council (NEC), chaired by the Vice President, Prof. Yemi Osinbajo, SAN.
According to the Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, who made the presentation, there have been 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 per cent; 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 records include the fact that inflation has continually declined since 2017 from 18.72% to 11.08% in July 2019; contribution of the non-oil sector to GDP has also increased 90.4% in Q1 2018 to 90.9% in Q1 2019.
BELOW ARE HIGHLIGHTS OF THE NEC DELIBRATIONS:
A. UPDATES ON NEC COMMITTEE ON EXPORT PROMOTION, PRESENTED BY ALHAJI MOHAMMED BADARU ABUBAKAR, GOVERNOR OF JIGAWA STATE
· The Governor of Jiagawa State, Alhaji Mohammed Badaru Abubakar, presented an update on the activities of the Committee.
· The report is sequel to the Zero Oil Plan, envisioned in the Economic Recovery and Growth Plan (ERGP) which is developed by the Nigeria Export Promotion Council (NEPC).
· The implementation of the plan is expected to yield results in 3 key areas:
o Add an extra UDS150 billion (minimum) to Nigeria’s foreign reserves cumulatively from non-oil exports over the next 10 years;
o Create 500, 000 jobs annually,
o lift 20 million Nigerians out of poverty, contributing towards SDG-‘’ No Poverty’’.
He reported that the committee has recorded the following achievements:
· Designed an implementation Plan for Project implementation
· 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.
· Provide processing equipment and conducted Capacity Building Programme on Strategic Products in the Zero Oil Plan in Kaduna, Benue, Ondo, Edo and Imo States. The products are Palm oil, Soya Beans and Ginger.
· Identify Companies for the Domestic Export Warehouse and Aggregation Centre for exportable products.
· He further revealed that the other achievements of the Zero Oil Plan to date includes:
o Non- oil exports (excluding natural gas) have risen from U$1.17 billion in 2016 to US$3.16 billion in 2018 meaning that Strategic sectors identified in the Zero Oil Plan have seen growth. For instance, cocoa exports have risen by $79.4 million since 2017, while sesame exports have also increased by $153 million since 2016 – an increase of more than 100% (source: International Trade Centre).
· The plan has identified the creation of five million jobs to date directly supported by no-oil exports, with efforts underway to increase this by 500,000 new jobs annually in line with SDG 8 – “Decent Work and Economic Growth”
· A state Export Development Fund has also been created through N50bn debenture to be disbursed by NEXIM, in which the Central Bank of Nigeria (CBN) has invested. The Fund offers long –term loan at single-digit interest rate to qualifying export-oriented projects under the State Export Development Programme and the Anchor exporter scheme.
After the presentation and discussion, Council agreed to
· Include the Minister of Foreign Affairs as a member of the Committee.
· Follow-up on the obligation of the Nigeria Maritime Administration and Agency NIMASA regarding the financing of the Nigerian Export Promotion Council (NEPC).
B. UPDATE ON POLIO ERADICATION IN NIGERIA PRESENTED BY THE HONOURABLE MINISTER, FEDERAL MINISTRY OF HEALTH
The update was presented by the Honourable Minister of Health and other health officials. He noted that 21st August 2019 marks exactly 3 years milestone without a case of Wild Polio Virus (WPV) in Nigeria.
There is need to improve the quality of the campaigns in order to stop the outbreak of the CVDPV2 (polio)
· Need for increased routine immunization.
He, however, identified some challenges as follows:
· Lack of release of counterpart funds by the Local Government Chairman as one of the key problems in achieving successful routine immunization.
· Insecurity concerns in parts of the country.
· The Minister requested the Council to:
o Convey the meeting of the Presidential Task Force on Immunization quarterly
o Ensure the sustainability of political oversight by the political class.
o Establish and re-activate of State Task Force on immunizations.
o Ensure quarterly release of appropriated funds for Routine Immunization and other Primary Health Care Activities.
o Ensure timely release of funds by the States and LGAs for immunization campaigns.
UPDATE ON NEC AD-HOC COMMITTEE ON SECURITY AND POLICING
A brief update was presented by Dr. Kayode Fayemi, Governor of Ekiti State and Chairman, Nigeria Governors Forum. He noted that the Inspector General of Police (IGP) has initiated the commencement of Community Policing and there is a plan to consider using N-Power beneficiaries and Youth Corpers as Police Officers in their Local Government Areas.
· Full report to be given at the next NEC meeting
C. PRESENTATION ON THE NIGERIAN STOCK EXCHANGE – BY MR OSCAR N. ONYEMA TITLED: “FINANCING THE NEXT LEVEL” ALTERNATIVE AND INNOVATIVE LONG-TERM FINANCING FOR NIGERIA CRITICAL NATIONAL INFRASTRUCTURE.
Council received a presentation from the Chief Executive Officer, The Nigerian Stock Exchange- Mr. Oscar Onyema.
The CEO, Nigerian Stock Exchange noted that the Nigeria Stock Exchange has actively supported Nigeria’s growth since 1960.
· That Capital market is highly connected and therefore crucial to the country’s economic development.
· The NSE is today one of Africa’s foremost Exchanges servicing the No 1, Economy in Africa with a Market Capitalization of N25.7trillion ($70.7bn)
· Over the last 5 years, N10.3tn in long term capital has been raised by federal and state governments in the form of Government Bonds.
· The Capital market offers innovative financing solutions for Nigeria’s $100bn infrastructural challenge.
· That solving Nigerian’s infrastructure challenges remain the panacea for actualizing the country’s full economic potential.
· There are untapped state investment opportunities in $1 trillion global privatization market and N9 trillion local pension sector.
· Unlocking the value will require:
o Public-Private Partnerships (PPPs) and Special Purpose Vehicles (SPVs)
o Infrastructure, Sukuk and Green Bonds; Real Estate Investment Trust (REITs);
o Refinancing bank debt through capital market instruments.
o Partnerships with Development Finance Institutions (DFIs) – onshore/Local currency bonds.
Council welcomed the presentation and noted the proposal
HONOURABLE MINISTER OF FINANCE, BUDGET AND NATIONAL PLANNING
REPORT SPECIAL ACCOUNTS
The Minister of Finance, Budget and National Planning reported to council that balances in the under listed accounts as 20th August 2019 is $95,329,245.24.
REPORT ON STABILIZATION FUND ACCOUNT.
The balance as at 20th August 2019 is =N21, 729,976,810.66.
UPDATE ON THE NATURAL RESOURCES DEVELOPMENT FUND
The balance as at 20th August 2019 is =N95,896,886,829.69
UPDATE ON THE NATIONAL BUDGET SUPPORT LOAN FACILITY.
The Honourable Minister of Finance briefed NEC on the progress of the facilitate detailing how the FG has made a total of over N614 billion available to 35 States being N175 billion each
· Council agreed to constitute a team from the Nigerian Governors Forum to meet with the CBN and Ministry of Finance to finalize modalities for commencement of payment.
UPDATE FROM AD-HOC COMMITTEE AND OTHER SPECIAL ACCOUNTS OF THE FEDERATION
The Committee requested for extension of time to finalise and present its report next meeting.
PRESENTATION ON THE MEDIUM-TERM EXPENDITURE FRAMEWORK AND MEDIUM TERM STRATEGY PAPER
The Honourable Minister of Finance, Budget and National Planning informed NEC that the purpose of the presentation is to get inputs and recommendation from the Council for further presentation to Federal Executive Council (FEC) for approval and implementation. She underscores the importance of the presentation as follows:
· Nigeria macroeconomic environment has stabilized in recovering gradually.
· There has been eight (8) successive month of economic growth since emerging from recession.
· The Economic Recovery and Growth Plan (ERGP), remains the basis for the Medium Term fiscal strategy.
The Honourable Minister also highlighted successes recorded as follows:
· Macro-economic stability has been achieved with growth in end Q3 2019 at 3.01%
· Continued increased in Real GDP from 1.89% in Q2018 to 2.01% in 2019
· There has been significant growth in non-oil sector.
· Contribution of the non-oil sector to GDP has increased by 90.4% in Q1 2018 to 90.9% in Q1 2019.
· Unemployment rate at 20.1% at Q3 2018
· Need for more diversification to boost inclusive growth.
· Mr. President is strongly committed to employment generation in this second term
She also noted that
· Considerable success has been recorded in containing insurgency is parts of the North East, with economic activities recovering.
· Recurring conflicts between farmers and herdsmen, as well as incidences of flooding, has affected agricultural products.
· Breaches in NNPC pipelines still regular, partly accounting for low oil production volume in the first half of the year.
· Inflation has continually declined since 2017 from 18.72% to 11.08% in July 2019
· 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 need to improve revenue collections and expenditure management.
· Need to take a bold decision and urgent action to achieve fiscal sustainability and macro-fiscal objectives.
Council welcomed the MTEF and offered suggestions.
ANY OTHER BUSINESS
Council welcomed new Ministers in their midst namely Finance, Budget and National Planning, State, Budget and National Planning Health, State: Health, Agriculture and State: Petroleum.
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