Economy
From The Report: Nigeria 2017
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The past few years have been difficult for Africa’s largest economy, with a fall in oil prices from more than $100 per barrel in 2014 to roughly $50 per barrel at the start of 2017 having damaging consequences for Nigeria. The fall in revenues from the country’s largest export-earner led to a slowdown in investment throughout the economy, a ballooning of federal government debt, a rise in non-performing loans in the private sector and high inflation. These factors contributed to the economy contracting 1.5% in 2016, compared to growth of 2.8% in 2015. This marked the country’s first recession in 25 years. The government, which was voted into office in 2015, has made a number of moves to stoke a recovery, with some success. Broader efforts have also been taken to accelerate growth in the coming years, with a focus on import substitution, industrialisation, diversification and export orientation.

This chapter contains interviews with Kemi Adeosun, Minister of Finance; Akinwunmi Ambode, Governor of Lagos State; Laoye Jaiyeola, CEO, Nigerian Economic Summit Group; and Yewande Sadiku, Executive Secretary, Nigerian Investment Promotion Commission.

Articles from this Chapter

Overview

Onwards and upwards: Growth has begun to pick up following the recession in 2016
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The past few years have been difficult for Africa’s largest economy, with a fall in oil prices from more than $100 per barrel in 2014 to roughly $50 per barrel at the start of 2017 having damaging consequences for Nigeria. The fall in revenues from the country’s largest export-earner led to a slowdown in investment throughout the economy, a ballooning of federal government debt, a rise in non-performing loans in the private sector and high inflation. The pressures put Nigeria on the…

Viewpoint

In it together: Kemi Adeosun, Minister of Finance, on mobilising revenue and spurring diverse growth across sectors
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Viewpoint:Kemi Adeosun I think there is now a consensus that the worst is over, but we must act with conviction to ensure that we do not repeat the mistakes that left us so vulnerable. This government is resolved to restore the role of government in the provision of public goods and services. This is not just a function of the fulfilment of constitutional responsibilities, it is part of setting a standard of value for money in the deployment of government resources and the prevention…

Analysis

Recovery position: The government has laid out its plans and targets for an economic resurgence
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In response to Nigeria’s 2016 recession, the government launched the Economic Recovery and Growth Plan (ERGP) in March 2017. The ERGP sets out broad targets ranging from macroeconomic stability to economic diversification and improving governance. It identifies five priority areas: stabilising the macroeconomic environment; achieving agricultural and food security; improving transportation infrastructure; ensuring energy sufficiency; and driving industrialisation. Given recent uncertainties…

Analysis

Paper chase: Recent bond issuances have brought concerns over the debt burden to the fore
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Nigeria has seen notable success in recent months on global debt markets. In February 2017 the government issued a 15-year, $1bn dollar-denominated eurobond at a yield of 7.9%, which was eight times oversubscribed. The following month it issued an additional $500m eurobond at a yield of 7.5%, testament to the continued appetite for debt in Africa’s largest economy. The February and March issuances will be consolidated, and the combined $1.5m will be due in February 2032. The proceeds from…

Interview

Private capital, public good: Akinwunmi Ambode, Governor of Lagos State, on developments in the economy, state policy and infrastructure
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Interview:Akinwunmi Ambode How is the government working with the private sector to help finance infrastructure projects? AKINWUNMI AMBODE: The infrastructure deficit in Lagos State has been estimated to be at least $50bn. Due to its limited resources and wide-ranging priorities, the Lagos State Government (LASG) cannot resolve this deficit alone. Thus, we created the Office of Overseas Affairs and Investment as a one-stop shop to attract foreign direct investments, stimulate the economy…

Analysis

Naira here nor there: Bringing about convergence in exchange rates is a high priority
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With hydrocarbons accounting for 90% of Nigeria’s foreign exchange, sustained low oil prices in 2014 and 2015 reduced the availability of dollars and other major foreign currencies. This reverberated throughout the economy, given the need for dollars to buy imports for key staples ranging from rice to diesel fuels. As a result, Nigeria teetered for months on the edge of a currency crisis, with a widening gap between the official and unofficial exchange rates, before the authorities dropped…

Interview

Partners in growth: Laoye Jaiyeola, CEO, Nigerian Economic Summit Group (NESG), on the public and private roles in economic reforms
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Interview:Laoye Jaiyeola What reforms has the government instituted, and what more can it do to promote economic growth? LAOYE JAIYEOLA: In 2015-17 we have seen the enactment of several reforms in the energy sector, which have led to increased efficiency and output. Stakeholders engaged themselves in the Niger Delta, which has stabilised the region; the cabinet has recently approved the National Gas Policy; the senate passed the Petroleum Industry Governance Bill, a subset of the Petroleum…

Interview

Better business: Yewande Sadiku, Executive Secretary, Nigerian Investment Promotion Commission, on improvements to ease of doing business and foreign direct investment
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Interview:Yewande Sadiku What challenges do foreign investors face? YEWANDE SADIKU: Historically, foreign exchange liquidity and ease of doing business have been the biggest challenges for foreign investors. Investors complain about the inconsistency of government policies and argue for greater involvement in policy formulation. Greater engagement with investors in the policy formulation process, and ensuring coordination between the government and investors is fundamental for Nigeria.…