As President Muhammadu Buhari's administration clocked three years on May 29, there have been diverse opinions across the country on the performance of the All Progressive Congress-led administration. On the basis of this, NAIJ.com presents the report sheet of this administration.
1. Economy
Economic growth is back, and consolidating:
• The economy is back on the path of growth, after the recession of 2016-17 (1.95 percent growth in Q1 2018)
• The Buhari's administration’s priority sectors of agriculture and solid minerals maintained consistent growth throughout the recession.
• Inflation has fallen for the fifteenth (15th) consecutive month, from 18.7 percent in January 2017 to 12.5 percent as of April 2018.
• External reserves of US$47.5 billion are the highest in 5 years, and double the size as of October 2016.
• Total exports in 2017 were 59.47% higher than for 2016
• In 2017, agriculture exports grew 180.7% above the value in 2016
• In 2017, raw material exports grew 154.2% above the value in 2016
• In 2017, solid minerals exports grew 565% above the value in 2016
• In 2017, exports of manufactured goods grew 26.8% above the value in 2016
• The first quarter of 2018 saw the fourth consecutive quarterly increase in capital importation since Q2 2017. The total value of capital imported in the quarter stood at US$6.3 billion, which is a year-on-year increase of 594.03%, and a 17.11% growth over the figure reported in the previous quarter.
• The new FX window introduced by the CBN in April 2017 now sees an average of US$1 billion in weekly turnover, and has attracted about US$25 billion in inflows in its first year (and a total turnover of $47.14 billion) – signaling rising investor confidence in Nigeria.
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• Nigeria’s stock market ended 2017 as one of the best-performing in the world, with returns in excess of 40 percent.
• Five (5) million new taxpayers added to the Tax Base since 2016, as part of efforts to diversify Government revenues.
• Tax revenue increased to N1.17 trillion in Q1 2018, a 51% increase on the Q1 2017 figure.
• N2.7 Trillion spent on Infrastructure in 2016 and 2017 fiscal years, an unprecedented allocation in Nigeria’s recent history.
• Fourteen (14) moribund blending plants revitalized so far under the Presidential Fertilizer Initiative (PFI); with a total capacity of 2.3 million MT of NPK fertilizer
• The contribution of solid minerals to the federation account rose five-fold from N700 million in 2015 to N3.5 billion in 2017.
2. Resetting the economy, restoring growth
The Economic Recovery and Growth Plan (ERGP), the federal government’s medium-term economic plan, was launched by President Buhari in April 2017. It charts a course for the Nigerian economy over the next four years (2017–2020). The vision of the ERGP is to restore economic growth, invest in Nigerians, and to build a globally competitive economy, and the Plan aims to achieve these by focusing on five execution priorities:
• Stabilizing the macroeconomic environment;
• Achieving agriculture and food security;
• Ensuring energy efficiency (especially in power and petroleum products);
• Improving transportation infrastructure; and
• Driving industrialization, primarily through SMEs.
To fast-track the implementation of the ERGP, the Federal Government launched the ERGP Focus Labs, as a targeted 6-week intervention (March to April 2018) bringing together all stakeholders to identify bureaucratic bottlenecks impacting medium-scale and large- scale investment projects in Nigeria, and then generate ideas and resources to resolve them.
The just-concluded Phase 1 of the ERGP Focus Labs identified private-sector projects worth about US$22.5 billion – and with a potential for 500,000 jobs (in Agriculture, Transportation, Manufacturing and Processing, Power and Gas) – for unlocking by 2020.
Aligning of monetary, fiscal and trade policies: Landmark initiatives here include:
• The creation in April 2017 of a new FX window for investors and exporters has helped stabilize the market. The new window has attracted inflows of more than US$45 billion in its first year of operation.
• The Buhari administration has implemented a new debt management strategy which targets a ratio of 60% to 40% between domestic and external debt. The other objectives of the strategy are to moderate growth in debt service costs, free up space in the domestic market so that the private sector can have increased access to loans, and, to shore up external reserves.
• The strategy has been implemented through increased external capital raising to part finance the deficits in the 2017 and 2018 Budgets and the refinancing of short term high cost Nigerian Treasury Bills (interest rate of 16-18%) with lower cost external debt (of 6.5% to 7.875%.)
• Through the implementation of the strategy the domestic to external debt ratio which stood at 84% to 16% as at June 30, 2015 improved to 73% to 27% as at December 31, 2017. Also, interest rates on FGN bonds and NTBs have dropped from their previous levels of 16-18% to 13-14% per annum.
• Establishment of the Nigerian Office for Trade Negotiations by the Economic Management Team (EMT). The NOTN has produced Nigeria’s first Annual National Trade Report, and is now compiling, for the first time in Nigeria’s history, a comprehensive database of Nigerian Trade Deals and Agreements.
• The Renminbi-Naira Swap Agreement between the Peoples Bank of China and the Central Bank of Nigeria.
Bond issuance in the international capital market
• In 2017, the Federal Government successfully issued US$4.5 billion Eurobonds in the International Capital Market (ICM), US$4 billion was for the part financing of the deficits in the 2017 Budget (US$1.5 billion) and 2018 (US$2.5 billion).
• The Eurobonds were not only highly oversubscribed, but Nigeria was able, for the first time to issue a tenor of 30 years. The significance of the US$1.5 billion Eurobond issued in November 2017 for 30 years is that Nigeria became the second country in Africa (after South Africa) to issue a tenor that long. In addition, the 30-year tenor was also ideal for financing capital projects which are long-term in nature.
• The balance of US$500 million was used to redeem NTBs which matured in December 2017.
• Also for the first time, Nigeria issued a Diaspora Bond in the ICM. The diaspora bond was US$300 million with a tenor of 5-years. The proceeds were used to part–finance the 2017 Budget.
New securities issued in the domestic market
• Under President Buhari’s administration, the Federal Government introduced 3 new products in the domestic market to promote financial inclusion, finance specific capital projects and offer local investors more products to enable them diversify their investment portfolio.
• These were N100 billion Sukuk to finance 25 Road Projects across the country, N10.69 billion debut Green Bond to fund infrastructure projects that tackle climate change and the FGN Savings Bond.
• A total of N8.126 billion from 11,366 retail investors has been raised through the Savings Bond since it was launched in March 2017.
Awards from external institutions
• The Government of Nigeria received multiple awards from reputable international bodies from its capital raising activities. Nigeria won three awards from EMEA Finance and one award from Global Capital.
• These are: Best Sovereign Bond in Africa (Nigeria’s US$3 billion Dual-Tranche 10 and 30 year Eurobonds issued in November 2017); Most Innovative Bond (Nigeria's US$300 million Diaspora Bond issued in June 2017); Best Naira Bond (Nigeria's N100 billion 7-year Inaugural Sukuk issued in September 2017); and Global Capital Award (Best African Borrower).
Payment of outstanding pension arrears & claims
The Buhari administration has released the sum of N54 billion to settle outstanding pension arrears from 2014, 2015 and 2016, as well as clear pensions claims up to March 2017.
Support to state governments:
• The Buhari administration has extended more than N1.9 trillion to state governments, to enable them meet their salary and pension obligations, especially in the face of dwindling oil revenues over the last two years. The support has come in the form of the following:
o Budget support facility (Total of N606.55 billion extended to the states as of May 2018; in exchange for reforms in budgeting, IGR, debt management, overheads, etc.
o Paris Club Refunds o Infrastructure Loans
o Loan restructuring for facilities with commercial banks: In 2015, the DMO restructured Commercial Bank loans with a total value of N575.516 billion for 23 States to reduce the debt service burden on the states. In exchange for their loans to State Governments, the banks were issued 20-year FGN Bonds at a yield of 14.83% per annum. The Restructuring Exercise benefited the States through:
- Reduction in the monthly debt service burden of States from between 55% to 97% for various States;
- Interest rate savings for the states ranging from 3% to 9% per annum;
- Longer repayment period for the loans now converted into Bonds; and,
- Freeing up of needed cash to run the machinery of Government.
2. Growing what we eat
• The Anchor Borrowers Programme (ABP) of the Central Bank of Nigeria (details below) has made available N82 billion in funding to 350,000 farmers of rice, wheat, maize, cotton, cassava, poultry, soy beans and groundnut; who have cultivated about 400,000 hectares of land.
• The ABP has substantially raised local production of rice; yields have doubled from 2-3 tonnes per hectare in areas; Nigeria’s paddy production has doubled compared to 2014 levels.
• Between 2016 and 2018, eight new rice mills have come on-stream in Nigeria.
• More than a billion dollars of private sector investments in the production of rice, wheat, sugar, poultry, animal feed, fertilizers, etc, since 2015.
• Nigeria’s milled rice production has increased by about 60 percent, from 2.5 million MT in 2015, to 4 million MT in 2017.
• The Presidential Fertilizer Initiative (which involves a partnership with the government of Morocco, for the supply of phosphate), has resulted in the revitalization of 14 blending plants across the country, with a total installed capacity in excess of 2 million MT. The benefits include annual savings of US$200 million in foreign exchange, and ₦60 billion annually in budgetary provisions for Fertilizer subsidies. The scheme has also made it possible for farmers to purchase fertilizer at prices up to 30 percent cheaper than previously available.
3. Making business work
Support for micro, small and medium enterprises: The administration has launched a series of funding and capacity development initiatives designed to support MSMEs:
• The new Development Bank of Nigeria (DBN) has finally taken off, with initial funding of US$1.3 billion (N396.5 billion); to provide medium and long-term loans to MSMEs.
• Minister of finance Kemi Adeosun led the Nigerian delegation that negotiated with the World Bank Group (WBG), African Development Bank (ADB) and European Investment Bank (EIB), at the 2016 Annual Meetings of the World Bank Group and IMF, for the US$1.3 billion take-off loan.
• The CBN approved the operating license of the Bank in March 2017, subject to the provision of a minimum capital requirement of N100 billion and other conditions, which have since been satisfied.
• As a wholesale bank, the DBN lends wholesale to microfinance banks, which in turn on-lend medium to long-term loans to MSMEs. Already, the DBN has a N5 billion line of credit available to be accessed by MSMEs through its partner institutions.
• Bank of Industry has disbursed more than N160 billion in loans since 2016. It has also established a N5 Billion fund for artisanal miners, as part of the federal ministry of mines and solid minerals development’s programme to boost mining activities in Nigeria.
• The MSME clinics, which bring relevant government agencies together with small businesses operating in various cities across the country, to enable the agencies provide direct support to these businesses. The interactions allow the Agencies better understand the issues facing small businesses, and provide a platform for speedy resolution. Fifteen (15) editions of the MSME Clinic have been held nationwide since it was launched in 2017.
• The Ease of Doing Business Reform Programme (see below)
• The Government Enterprise and Empowerment component (GEEP) of the Social Intervention Programme (SIP)
Ease of Doing Business Reform successes:
• The work of the Presidential Enabling Business Environment Council (inaugurated by President Buhari in August 2016) and the Enabling Business Environment Secretariat (EBES) resulted in Nigeria moving up 24 places on the World Bank’s Ease of Doing Business rankings in 2017, and earning a place on the List of 10 Most Improved Economies.
• The Nigerian Investment Promotion Council (NIPC) has compiled a comprehensive listing of all investment incentives in Nigeria, making it easier for existing and potential investors to have equal access to the information.
• NIPC has also launched an online, multilingual, investors guide with the kind of basic information about starting a business, labour laws, taxes, land, etc that investors need to better understand Nigeria.
• The Buhari administration has, since 2017, issued three Eexecutive orders that positively impact Nigeria’s small business environment, as follows:
Executive order on improving efficiency in the business environment
Executive order on promoting local procurement by government agencies
Executive order on planning and execution of projects, promotion of Nigerian content in contracts and science, engineering and technology
• Some of the specific ease of doing business reform achievements are as follows:
Passage, by the Senate, of the Companies and Allied Matters (Repeal & Re-enactment) Bill 2018 in May 2018, giving legal backing to some of the reforms already launched and being implemented by PEBEC/EBES.
The new Bill permits the use of electronic signatures for company registration documents; provides for the submission of applications for reservation of names through electronic means; allows for a new form of legal entity known as Limited Liability Partnerships (LLPs), and makes it possible for a single person to form a private company in Nigeria; among other reforms.
Creation of a National Collateral Registry (NCR). A NCR or Movable Assets Registry was established by the Central Bank of Nigeria, in May 2016. In May 2017, the Senate passed a Bill to give the NCR legal backing.
A palletization policy issued by the federal ministry of finance, which ensures that goods entering into Nigeria are properly stacked according to global best practices for efficient inspection and to discourage the usual rent seeking that comes with an outdated standard of 100% physical inspection of goods.
Automation of business name reservation, submission of registration documents, payment of registration fees, generation of Tax Identification Numbers (TIN), and filing of federal Taxes.
Implementation of functioning Visa-on-Arrival system for Business Visitors.
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Meanwhile, NAIJ.com previously reported that President Muhammadu Buhari on Monday, March 26, said that the past three years of his administration had witnessed great turbulence and that the country’s need for critical job creating sectors that had been abandoned in the past has been revived and had started yielding results.
The president also stated that the arable land the country is blessed with is meant for farming, grazing and forestry, adding that any strategy for land and water management must take cognisance of the interconnectivity of all the aforementioned key sectors to ensure equity and sustainability.
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Source: Naija.ng