Nigerian economy attracted capital inflows valued at over $6 billion in Q1

The Nigerian economy recorded capital inflows valued at over $6 billion in the first quarter of 2018, Minister of Budget and National Planning, Udoma Udoma, has said.

The minister who was making a presentation on “Delivering Economic Resilience and Growth” at the Financial Times Nigeria Summit in Lagos, on Thursday, said the inflow was over 600 per cent more than about $1 billion achieved in the first quarter of 2017.

Mr Udoma noted that the substantial increase in capital inflows into the economy was a clear evidence that investors were becoming increasingly confident of the Nigerian economy.

He re-iterated that Nigeria’s economic outlook for 2018, particularly over the medium term, was very positive, with growth in the export sector riding by 59 per cent between 2016 and 2017, from N8. 53 trillion in 2016 to N136 trillion in 2017.

Government, he stated, was continuing to roll out initiatives, such as the Economic Recovery & Growth Plan (ERGP) Focus labs, aimed at attracting sufficient private sector investments to enable the country achieve the growth target of 7 per cent by 2020.

Although the present administration inherited a challenged economy, the minister said it has succeeded in turning the situation around, with the economy now out of recession and growing again.

He explained that the collapse of oil prices in the global market from $111.8 in June 2014 to as low as $30.7 in January 2016 had set the country’s economy on a downward spiral, particularly without any fiscal buffers, culminating in a recession by the second quarter of 2016.

Government’s response, he said, was an expansionary 2016 budget, supported by a Strategic Implementation Plan (SIP) that consisted series of short term interventions to reflate the economy.

“This was followed by the development of the Economic Recovery and Growth Plan (ERGP) in 2017, a medium term plan whose implementation has taken the country out of recession and will place the economy on the path of sustained, diversified and inclusive growth,” he said.

As part of the implementation of the ERGP, Mr Udoma said there have been substantial increases in capital allocations to priority sectors, such as infrastructure and agriculture, with capital releases of over N1.2 trillion under the 2016 Budget, and over N1.5 trillion under the 2017 Budget.

Besides, a number of reform measures, such as the work done by the Presidential Enabling Business Council (PEBEC), have resulted in the country becoming recognised by the World Bank as one of the top ten reforming countries in the world.

Also, the country has moved up 24 places in one year in the World Bank’s ease of doing business rankings.

The minister said what was most encouraging about the increase in exports was the increase in non-oil exports.

He said exports of agricultural produce increased by almost 300 per cent in value, while exports of solid minerals increased by over 250 per cent in value and exports of manufactured goods grew by more than 25 per cent in value.

On foreign reserves, the minister said this has grown from $26.51 billion in June 2016 to N47.79 billion by the middle of May 2018, while inflation rate has been trending consistently downwards for the last 15 months, from 18.72 per cent in January 2017 to 12.48 per cent in April 2018.

On the other hand, the Naira has remained stable with the gap between the official and parallel market rates gradually narrowing.

On the just-concluded first phase of the focus labs, the minister said potential private investments valued over $22.5 billion were identified, out of which projects value about $10.9 billion was categoried as “most ready” to go.

In addition, several quick wins/early successes were recorded, with prospects of projects identified in this first phase rising to as much as $39.2 billion by 2025, if effectively followed through.