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Eurobond: Nigeria’s external reserves have grown by more than $4 bn in three months – FG

The Federal Government has said that the almost eight-fold over-subscription of its recent Eurobond (orders in excess of $7.8 billion compared to a pre-issuance target of $1 billion) demonstrated strong market appetite for Nigeria, and showed confidence by the international investment community in the country’s economic reform agenda and that Nigeria’s external reserves have grown by more than $4 bn in the last three months. The Federal Government’s position was contained in a bulletin of Aso Villa, “Government at Work,” released in Abuja, yesterday. According to the government, the nation’s economy is already recovering from recession as evidenced by the marginal non-oil sector growth rate of 0.03 per cent in 2016 third quarter (after two quarters of consecutive negative growth), among other positive developments. It attributed the marginal growth to the continued good performance of agriculture and the solid minerals, two sectors prioritised by the Federal Government. The government said agriculture grew by 4.54 per cent in the quarter under consideration, with growth in crop production recording nearly 5 per cent, its highest since the first quarter of 2014. It also stated that growth in the solid mineral sector had averaged about seven per cent. The second reason government gave as an indication that the economy was recovering was the Anchor Borrowers Programme, ABP, of the Central Bank of Nigeria, CBN, 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). It added that the Fertilizer Intervention Project (which involves a partnership with the government of Morocco, for the supply of phosphate) was on course to significantly raise local production, and bring the retail price of fertilizer down by about 30 percent. Another reason given by government that the economy was bullish is the newly established Development Bank of Nigeria, DBN. The government said the bank was established with an initial take-off of $1.3 billion (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 government added: “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.” Another factor which government said was a point to economy recovery is the implementation of the Social Investment and Empowerment Programme (SIP). It added that all the four components of the SIP had now taken off, and 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. The government said further: “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 billions of dollars in infrastructure funding. Construction will be 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).”

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