The Federal Government said yesterday that Nigeria’s recession was receding.
Proof: the about eight-fold over subscription of the government’s Eurobond (orders in excess of US$7.8 billion compared to a pre-issuance target of US$1bn).
Besides, the oversubscription, the government believes, has confirmed the confidence level of the international investment community in Nigeria’s economic reform agenda. A report in Issue 23 of Aso Villa’s Newsletter, Government at Work, released on Monday, also gave 11 other reasons why the government believes that the economy is on its way out of recession.
After two consecutive quarters of negative growth, according to the newsletter, the non-oil economy witnessed in Q3 2016 a modest return to positive territory at 0.03%.
It attributed this marginal growth to the continued good performance of agriculture and solid minerals, two sectors prioritised by the Federal Government.
According to it, agriculture grew by 4.54% in the quarter; crop production is at nearly 5% – its highest since the first quarter of 2014.
Growth in the solid mineral sector, the newsletter said, averaged about 7%.
The second reason why the government believes the economy is recovering is the Anchor Borrowers Programme (ABP) of the Central Bank of Nigeria, which it said substantially raised local rice production in 2016 (yields improved from two tonnes per hectare to as much as seven tonnes per hectare, in some states) and produced a model agricultural collaboration between Lagos and Kebbi states.
Thirdly, it said that the Fertiliser Intervention Project (which involves a partnership with the Government of Morocco, for the supply of phosphate) is on course to significantly raise local production, and bring the retail price of fertiliser down by about 30 percent.
Another reason given by the government is the taking off of the newly established Development Bank of Nigeria (DBN), with initial funding of US$1.3bn (provided by the World Bank, German Development Bank, the African Development Bank and Agence Française de Development) to provide medium and long-term loans to MSMEs.
The newsletter states: “A new Social Housing Programme is kicking off in 2017. The ‘Family Homes Fund’ will take off with a 100 billion naira provision in the 2017 Budget. (The rest of the funding will come from the private sector).
“More than N800 billion has been released for capital expenditure in the 2016 budget, since implementation started in June 2016. This is the largest ever capital spend within a single budget year in the history of Nigeria. These monies have enabled the resumption of work on several stalled projects – road, rail and power projects – across the country.”
The government also gave the implementation of the Social Investment and Empowerment Programme (SIP) as a reason for growth of the economy.
All the four components of the SIP, it noted, have now taken off.
The newsletter described the SIP as the largest and most ambitious social safety net programme in the history of Nigeria, with more than 1 million beneficiaries so far: – 200,000 N-Power beneficiaries, 23,400 Government Enterprise and Empowerment (GEEP) Scheme beneficiaries, 1,000,000 Homegrown School Feeding Programme (HGSFP) beneficiaries, and ongoing Conditional Cash Transfer (CCT) payments across nine pilot states.
It said: “Strategic Engagements with OPEC and in the Niger Delta have played an important part in raising our expected oil revenues. Already, Nigeria’s External Reserves have grown by more than $4 billion in the last three months.
“Collaboration with China, proceeding from President Buhari’s April 2016 visit, has unlocked billion of dollars in infrastructure funding. Construction will begin on the first product of that collaboration, a 150km/hour rail line between Lagos and Ibadan, in Q1 2017.
“The National Economic Recovery and Growth Plan (NERGP), the Federal Government’s medium-term Economic Plan, is due for launch in February 2017, and will chart a course for the Nigerian economy over the next four years (2017 – 2020).” it stated