NIGERIA S ECONOMIC OVERVIEW

Transcription

1 NIGERIA S ECONOMIC OVERVIEW Presented at the Plenary Session of UK-Nigeria Trade & Investment Forum By Senator Udoma Udo Udoma, CON Honourable Minister Ministry of Budget and National Planning 17 th April,2018 0

2 1 Introduction Nigeria I s a c o u n t r y w i t h e n o r m o u s p o t e n t i a l s / o p p o r t u n i t i e s f o r i n v e s t m e n t R i c h i n n a t u r a l r e s o u r c e s - O i l w e a l t h, s o l i d m i n e r a l s & f e r t i l e l a n d A f r i c a s l a r g e s t e c o n o m y L a r g e m a r k e t f o r a n y p r o s p e c t i v e b u s i n e s s S t r a t e g i c g e o g r a p h i c a l l o c a t i o n w e l l l o c a t e d t o p r o v i d e a g a t e w a y f o r t r a d e e x p a n s i o n a c r o s s t h e r e s t o f A f r i c a a n d t h e W o r l d S t r o n g P o l i t i c a l L e a d e r s h i p A l o n g - s t a n d i n g m e m b e r o f t h e C o m m o n w e a l t h w i t h s t r o n g t r a d e a n d e c o n o m i c l i n k s w i t h U K a n d o t h e r C o m m o n w e a l t h c o u n t r i e s 1

3 Nigeria s Economic Agenda Short-term Plan for Implementing the 2016 Budget of Change Contains 34 key actions selected for immediate implementation Diversification of the economy as one of the key objectives Medium-term Plan, currently being implemented by the FG Developed through extensive consultative process, including the private sector Sustained, diversified and inclusive growth as one of the key objectives 2

4 Vision, Principles and Objectives of ERGP B r o a d O b j e c t i v e s Sustained inclusive diversified growth to achieve maximum welfare for the citizens Restoring and Sustaining Growth Macroeconomic Stability Economic Diversification Building a Competitive Economy Investing in infrastructure Improving the Nigerian business environment and partnering with the private sector Tackling constraints to growth Leveraging the power of the private sector Allowing markets to function Upholding our core values Promoting national cohesion and social inclusion Investing in our People Increasing Social Inclusion Job Creation and Youth Empowerment Human Capital Development 3

5 The ERGP has five Key Execution Priorities.. 4

6 Annual budgets aligned with the Plan A commitment to allocate at least 30% of annual budget to capital expenditure in order to stimulate the economy despite revenue challenges Agg. Exp CAPEX % of CAPEX in total budget 31.7% 30.2% 16.1% 2, , , , , % 2, , Focused on expenditure with impact on growth, job creation, poverty reduction and also security (P) 5

7 We are also investing in Human Capital In the Education Sector, capital allocations have been increased from N23.52 billion in 2015 to N61.73 billion in 2018 Budget proposal. Capital UBEC Capital Allocation to Education (N Billion) In addition, the provision for UBEC has been substantially increased from N68.38 billion in 2015 to N in the 2018 proposal Most of the provision for UBEC is for capital expenditure. These exclude what the State Governments are spending on education 6

8 In the Health Sector, capital allocations have been increased from N22.68 billion in 2015 to N71.11 billion in 2018 Budget proposal Capital Allocations to Health (N'billion) (P) These exclude what the State Governments are spending on primary and secondary health care across the country 7

9 National Social Investment Programme (NSIP) N500 billion provided in annual budgets for the Programme Programme has four clusters Government Enterprise & Empowerment Programme (GEEP) providing loans of N50,000+ to market women, artisans Home Grown School Feeding Programme providing free meals to children in public primary schools N-Power Programme engaging young unemployed graduates Conditional Cash Transfer (CCT) providing conditional cash transfer of N5,000 to poor families 8

10 Reforms and initiatives are being introduced across various sectors Establishment of Investors and Exporters FX Window by CBN to deepen the FX Market, boost liquidity and accommodate all FX requirements Establishment of Nigeria Industrial Policy and Competiveness Advisory Council as a vehicle for partnering with the private sector on the Industrialization Agenda Establishment of Presidential Enabling Business Environment Council (PEBEC), Completion of 60-Day National Action Plan on Ease of Doing Business including the Visaon-arrival policy and issuance of Executive Order EO1 on Ease of Doing Business Establishment of Special Economic Zones (SEZs) (with budgetary provision of N46 billion in 2017 budget and N46.39 billion in 2018 proposal) Partnering with the private sector on infrastructure development (e.g. Road Trust Fund Scheme, Concessions arrangements, PPPs, etc.) Focus Labs (initially in Agriculture & Transport, Power & Gas, Manufacturing & Processing) being conducted to unlock private investments 9

11 3 Impact of our Policies 10

12 Growth Restored Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q (0.67) 2016 (0.91) 2017 (1.73) (1.49) (2.34) Quarterly GDP Growth Yearly GDP Growth Signs of recovery from recession observed since Q In Q2, 2017, real GDP grew by 0.72% indicating the economy s exit from recession. Recovery Consolidated in Q3 through Q with GDP rising to 1.92% Real GDP growth for FY 2017: 0.83% from -1.58% in

13 Percent (%) Inflation rate declining from 18.72% in January 2017 to 13.34% by March Jan. 17 Feb. 17 Mar. 17 Apr. 17 May-17 Jun-17 Jul-17 Aug. 17 Sep-17 Oct. 17 Nov. 17 Dec. 17 Jan Feb Mar Source: National Bureau of Statistics 12

14 Investors Confidence Coming Back and Capital Inflows ($million) Increasing The total value of capital imported into Nigeria rose from $908.3 million in Q to $1,792.4 million in Q and further to $4,145 million in Q Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Foreign Direct Investment Portfolio Investment Other Investment Total Investment While Q recorded an increase of 131.3% more than Q2 2017, Q came in even much stronger with a total capital importation value of $5,381.4 million Source: National Bureau of Statistics 13

15 Trade Balance positive since Q reaching N1.798 trillion by Q ,500, ,000, ,500, ,000, ,500, ,000, ,500,000.0 Total export in Q4, 2017 stood at N3, billion representing 9.35% growth compared to Q3, 2017 and 31.27% growth compared to Q In contrast, total imports declined from N2, 348 billion in Q to N2, billion in Q ,000, , , ,000,000.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Balance Imports Exports(fob) With exports growing in the face of declining imports since Q3 2016, Nigeria s trade balance in Q stood at N1, 798.3billion. This represents the highest trade balance since Q Source: National Bureau of Statistics 14

16 Foreign Reserves ($ billion), growing - from $23.81 billion in Sept to $46.55 billion by April 4, DEC JAN MAR-16 JUN SEP DEC JAN MAR JUN-17 SEP OCT NOV DEC JAN FEB MAR APRIL 4, 2018 Source: CBN 15

17 Exchange rates gap narrowing Jan-12 Inter-Bank BDC Jan-18 Source : CBN 16

18 Nigeria s Ease of Doing Business Ranking Improved up by 24 places from 169 in 2016 to 145 in Nigeria among the top 10 reforming countries in the world today.. 17

19 367, , , , , , , , , ,918.8 UK among Nigeria s top 10 trading partners Ranked 8 th as Nigeria s export destination in Q and 6 th as its import source. NIGERIA'S TRADE WITH UK (N MILLION), Nigeria's Imports from UK Nigeria's Exports to UK Nigeria s import from UK increased from N283.8 billion in 2015 to N419.2 billion in 2017 Source: National Bureau of Statistics 18

20 4 CONCLUSION Nigeria s outlook for 2018 and over the medium term is very positive Nigeria has emerged from recession and is growing again The Government has a plan the ERGP to transform the economy and deliver sustained, diversified and inclusive growth Several initiatives in the Plan being implemented to remove constraints to investments ( e.g. PEBEC, the Focus Labs) Politically, the country is very stable - election now a routine in Nigeria every 4 years This is the time to invest in Nigeria 19

21 Thank you for your attention Federal Ministry of Budget & National Planning, Abuja April, 2018