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Juliana Taiwo-Obalonye, Abuja
President Muhammadu Buhari has said the outbreak of coronavirus, code-named COVID-19 which has seen decline in crude oil prices, thereby elevating the country’s economic risks, is an avenue for the country to intensify its economic diversification, invest more in agriculture as well as push for self-sufficiency in food production.
This is even as he has admitted that given government’s dependence on crude oil revenues for close to 60 percent of its revenues, the recent decline in crude oil prices will affect the ability to meet the infrastructure and human capital needs.
This is even as the private sector have pledged to through a special purpose vehicle working with the Federal Government, and key development finance agencies, to mobilize close to N1.2 trillion in funds from banks, pension funds and other financial institutions, to fund road, power, and port infrastructure.
They have also identified six key road projects and three seaport projects for funding, adding that the special purpose vehicle implementation will commence in October 2020.
President Buhari said this Wednesday night when he hosted some participants of the Central Bank of Nigeria ‘Going for Growth’ Roundtable Session to a dinner at the State House Banquet Hall in Abuja.
According to him, these external challenges have only served to reinforce the importance of ensuring that Nigeria is self-sufficient in the production of strategic goods.
The President said: “This government remains steadfast in seeking to promote the growth of the Nigerian economy and by extension the growth of the Nigerian private sector. I am glad to note that following recent recession and supported by growth-enhancing fiscal and monetary policy measures, GDP growth has remained in positive territory for the past 11 quarters. The positive growth has been driven by rise in key sectors of our economy, such as Agriculture, Industry, Oil and Gas, as well as ICT.
“A key focus of this administration has been diversification of the Nigerian economy and improving Nigeria’s level of self-sufficiency in food production. These measures would help support faster economic growth, create employment opportunities for our teeming youths, and reduce our import bill.
“The onset of the coronavirus in December 2019, which has spread to over 100 countries is having a significant impact on global growth, as well as commodity prices such as crude oil, which has dropped by over 45 percent since January 2020.
“These external challenges have only served to reinforce the importance of ensuring that Nigeria is self-sufficient in the production of strategic goods.
“They have also highlighted the fact that we need to continue to implement measures that would enable growth in other sectors of our economy and reduce our dependence on earnings from crude oil. For these objectives to be achieved, the vital role of the Nigerian private sector cannot be disputed or overemphasized.”
President Buhari expressed delight that his administration has made some progress in the diversification plans and in creating an enabling environment for the Nigerian private sector to thrive.
He explained: “In the agricultural and manufacturing sectors, we have seen substantial improvements in the cultivation and processing of key staple commodities such as rice, maize, cotton and tomatoes.
“We have also worked to improve access to finance for businesses in the agriculture and manufacturing sectors.
Access to credit is often cited as a constraint to the growth of farmers and small and medium-sized businesses. Over the past 10 months, we have seen significant improvements in credit to support continued growth of our economy.
“I am aware that lending rates by banks to farmers, small businesses and manufacturers have been lowered over the same period. These measures along with aggressive efforts at rebuilding our road, rail and power infrastructure, will help to reduce the cost of doing business in Nigeria and promote faster growth of our economy.
“Apart from the successes we have recorded, I admit that challenges do remain. Given our dependence on crude oil revenues for close to 60 percent of government revenues, the recent decline in crude oil prices affects our ability to meet the infrastructure and human capital needs.
“Also, with annual population rates, we must continue to support growth in sectors that have the ability to absorb the employment needs of our growing population. With our vast arable land as well as population, ample room for growth exist in our agriculture and manufacturing sectors.”
At the diner, the president assured the nation that his administration will pay close attention to the recommendations made by the participants.
“I therefore welcome continued collaboration with the private sector. The recommendations provided today on ways in which the private sector can support growth in key sectors such as Agriculture, Manufacturing, ICT, and Finance are necessary if we are to achieve double digit growth of our economy.
“I assure you that this government would pay close attention to your recommendations, as part of our efforts towards developing policies and programs that will enable improved economic growth and creation of jobs.”
Central Bank of Nigeria (CBN), Godwin Emiefele said the private sector has committed that given a conducive environment, ideas generated at the round table will be implemented and through the CBN periodic updates will be provided to President Buhari.
Emefiele presented some of the key findings from the roundtable session:
“Participants stressed the need for greater collaboration between the public and private sector in addressing some of the emerging challenges to growth. One key highlight was the need to ensure that the Nigerian economy is self-sufficient in the production of key goods and services, as this would strengthen our buffers and insulate our economy from external headwinds.
“Participants from the financial sector agreed to create a special purpose vehicle working with the Federal Government, and key development finance agencies. The well-structured SPV, will be used to mobilize close to N1.2 trillion in funds from banks, pension funds and other financial institutions, to fund road, power, and port infrastructure.
Six key road projects and 3 seaport projects would be identified for funding.
“The framework for this SPV is currently being worked on and will be ready for implementation by October 2020. When implemented the SPV will help to reduce the burden of government financing of infrastructure projects and enable the government to focus on funding other priority areas. It will also reduce the cost of transporting goods across the country for farmers, SMES and Manufacturers. More importantly, it will help improve our ability to attain double digit growth rates.
“Recommendation were also made on ways to improve broadband penetration in the country, which is critical in enabling Nigerians access the benefits that come with greater utilization of technological applications. One area highlighted was the need to create a one stop shop that investors could interface with in order to reduce multiple taxation.
“In order to improve agriculture and manufacturing productivity, participants noted the need for innovative financing schemes that require minimal collateral from farmers and SMES. More importantly emphasis was also placed on improving processing of six key commodities such as palm oil, dairy, cassava, wheat, aquaculture and sugar. Increased processing of these commodities could lead to the creation of over one million jobs over the next two years.”
At the diner, the president assured the nation that his administration will pay close attention to the recommendations made by the participants.
The participants included officials of both public and private sectors such as businessman Aliko Dangote, CEO Zenith Bank, Mr Jim Ovia, among several others
Vice President Yemi Osinbajo, Minister of Trade and Investment and the Secretary to the Government of the Federation were also among those present.
