…says Nigeria on a long, difficult journey
President Muhammadu Buhari said that the Federal Government will invest substantial part of its foreign and local loans into the development of critical infrastructure.
The president said borrowed funds will be judiciously utilised to revive stalled road, rail, power and port projects, and in agricultural initiatives that will significantly boost domestic production of food.
Buhari disclosed this in an article published yesterday in Bloomberg International titled, ‘Making Africa Rising a Reality’.
The Federal Government has approved plans to receive loans from the World Bank, China’s Exim Bank, and the Japan International Cooperation Agency. The loan will come in form of “low cost, longterm loans” with 1.25 per cent interest rates and 20- year tenors.
Also, the government is seeking loans from the African Development Bank (AfDB) and secures a Eurobond. According to Buhari, the long old thinking about Africa as a continent with a promising potential has given way to more questioning concerns.
He said unlike in the past in Nigeria where funds meant for developmental purposes were diverted and squandered, his government was commitment to prudence and accountability in the management of resources.
“Unlike in the past when borrowed funds were frittered away on unproductive ventures, we will ensure their investment in the revival of stalled road, rail, power and port projects, and in agricultural initiatives that will significantly boost domestic production of food.
“For far too long we have under-invested in infrastructure – the most critical element for creating sustainable economic growth. The net effect: an avoidably high cost of doing business in Nigeria,” he stressed. Buhari explained that now that the country was faced with economic recession, government’s focus is to attract huge loans that would assist in rescuing the dwindling economy.
Already, Buhari said: “We have begun raising a $1 billion Eurobond, our first in three years. We are also raising debt from the World Bank, the African Development Bank, the Chinese Exim Bank and other development finance partners.”
The president noted that since the signing of the 2016 budget into law, government has released about N400 billion for various infrastructure projects. He also explained that the interest of his administration was to encourage the private sector taking advantage of the Public Private Partnership (PPP) model to support gamechanging private-sector projects in power, refining, gas transportation and fertilizer production.
The president said that rather than lament on the current economic challenge, government will not be distracted. He challenged African leaders to see the fall in oil and commodities as an opportunity to create new areas of wealth that would guarantee the well being of citizens.
The president admitted that the journey ahead is long and difficult. “The journey ahead remains long and difficult. Our double-digit inflation, currency turmoil and downgraded ratings will not vanish overnight.
We also know that the current recession is partly driven by the production outages in Nigeria’s Delta region, and we are confident that growth will accelerate, as problems in that region are resolved.
“But the real story here is not the challenges, which are all too visible, but the opportunities. We have learned the necessary lessons. We will ensure that Nigeria does not slip back into a lazy and dangerous dependence on the price of crude oil.
We will continue to insist on transparency and accountability in the use of government funds. And we will build an economy that prioritizes the ease of doing business and investing, and that thrives on the entrepreneurial energy and ingenuity of our people….
“The months ahead will show not only that Nigeria is on the rise, but that this “Rising” is real and lasting – one that touches not just the statistical databases, but the lives of the people who elected us to deliver positive change.”
In a related development, the Federal Government will soon embark on wide ranging reforms expected to provide a favourable environment for businesses in the country. Buhari, who disclosed this yesterday in New York, said Vice-President Yemi Osinbajo will soon make public the reform strategies affecting the nation’s ports and issues relating to visaon arrival.
The president was addressing a large gathering of political and business leaders from the United States, Africa and other regions of the world at the Second United States-Africa Business Forum.
He assured potential investors that Nigeria would soon be one of the most attractive places to invest as his administration has embarked on significant economic reforms to realise that goal. The forum was organised by the United States Department of Commerce and Bloomberg Philanthropies.
Buhari explained that “the Presidential Enabling Business Environment Council headed by Osinbajo, will soon come out with wide-ranging business environment reforms on ports, visa-on arrival, improving the speed and efficiency of land titling and business registration.”
Some fiscal incentives, he noted, include, up to five years tax holiday for activities classified as “pioneer;” tax-free operations; no restrictions on expatriate quotas in Free Trade Zones and a low VAT regime of 5 per cent. “We intend to make Nigeria one of the most attractive places to do business,” he declared, even as he noted that Nigeria remains the number one investment destination in Africa.
Buhari noted that his administration would continue to strengthen government institutions in order to address the concerns of investors and ease investments in the Nigerian economy. “We are weaning ourselves from a historical dependence on crude oil, diversifying our economy, and putting it on the path of sustainable and inclusive growth. To this end, we have embarked on policies aimed at establishing an open, rules-based and market-oriented economy.
We will continue to actively engage with the private sector at the highest levels to listen to your concerns and to assure you of our commitment to creating enabling policies in which your businesses can survive and thrive,” Buhari said.
Buhari, while stressing that enormous potential exists for foreign investment and for the local economy, listed sectors which have barely been exploited to include Nigeria’s 180-million population and abundance of labour; arable land; forest waters; oil and gas; solid minerals; livestock and huge tourist potential. According to him, “These are, no doubt, challenging times for the Nigerian economy.
But let me use this opportunity to boldly affirm our conviction that there is no crisis without an accompanying opportunity. In our case, we see Nigeria’s ongoing economic challenges – occasioned mainly by the fall in oil prices – as an opportunity to set the economy firmly on the path of true diversification, sustainable economic growth and shared prosperity.”
Buhari said after the Business Forum, he looked forward to increased trade and investment flows between Nigeria and the United States. The president said Nigeria would soon be one of the most attractive investment destinations.
