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Nigeria’s Economy Recovering Fast, Says Presidency |The Republican News

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Olalekan Adetayo, Abuja

The Presidency has said the nation’s economy which is currently in recession is currently on course for recovery and growth.

This was contained in the 23rd newsletter published by the Presidency Office of Digital Engagement, a copy of which was posted on the official website of the Presidency, @AsoRock.

The Presidency said there were 11 reasons to prove that the nation’s economy was gradually coming out of recession.

It said, “After two consecutive quarters of negative growth, the non-oil economy showed, in Q3 2016, a modest return to positive territory, at 0.03 per cent.

“This was partly due to the continued good performance of agriculture and the solid minerals, two sectors prioritised by the Federal Government.

“Agriculture grew by 4.54 per cent in the quarter under consideration of which growth in crop production at nearly 5 per cent was at its highest since the first quarter of 2014. Growth in the solid mineral sector averaged about 7 per cent.”

According to the document, the Anchor Borrowers Programme of the Central Bank of Nigeria substantially raised local rice production in 2016.

It explained that 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 Morocco, for the supply of phosphate is on course to significantly raise local production, and bring the retail price of fertilizer down by about 30 per cent.

The government said the newly established Development Bank of Nigeria was taking off, with initial funding of $1.3bn 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.

It also disclosed that a new social housing programme tagged ‘Family Homes Fund’ is starting this year with a N100bn provision in the 2017 budget while the rest of the funding will come from the private sector.

“…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 $4bn in the last three months.”    (Punchng.com)

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IMF Links Nigeria’s Economic Woes To Poor Management |The Republican News

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Niyi Odebode and Everest Amaefule

The International Monetary Fund has said that efforts to save the naira by rationing foreign exchange have failed.

The IMF stated this in its policy paper on macroeconomic developments and prospects in low-income developing countries on Thursday.

The fund attributed economic failures in the country to “delayed/poorly managed policy adjustment.”

It stated, “Domestic policy failures cited include delayed/poorly managed policy adjustment to lower commodity prices (as in Nigeria, where foreign exchange rationing adversely affected debt service capacity of many corporates).”

The IMF also blamed the failures on lack of business confidence and delay in policy adjustment by Nigeria’s leadership.

It said that the challenges concerning foreign exchange had pushed inflation to double digits in Nigeria, Africa’s largest economy.

The IMF added, “There were sharp movements in currencies across many LIDCs during 2015. Further sizeable depreciations were recorded in 2016 in commodity exporters under stress,” the paper read.

It added, “Mongolia, where reserve levels have been significantly eroded, and Nigeria, where efforts to support the naira through foreign exchange rationing, have gradually crumbled.

“Inflation has risen to troubling levels in a handful of cases, concentrated in sub-Saharan Africa. Among commodity exporters, large exchange rate depreciations were a key contributor in Mozambique, Nigeria, and Zambia.”

According to the fund, Nigeria is affected by Boko Haram-led attacks in the North and disruptions to oil production in the Niger Delta region.

“Aside from direct damage and increased security outlays, conflict situations undermine business confidence, investment, and tourism,” it stated.

It added that Nigeria’s economic problems affected neighbouring countries such as Chad and Benin Republic.

The fund stated, “External developments have predictably played an important causal role in the emergence of financial sector stress, through falling commodity prices, declining remittances, and adverse spillovers from neighbours — as in the impact of Nigeria’s economic difficulties on Benin Republic.

“That said, teams’ assessments indicate that poor macroeconomic policies and weak supervision have also played a significant contributory role.”

It said that the recent experience of LIDCs underscored the relevance of some general messages for developing countries in terms of building economic resilience, which include “the value of having a diverse export base to allow countries handle adverse external shocks, and hence the importance of promoting economic diversification.

Others are the importance of building large foreign reserve/asset positions during “good times” in countries where exports remain highly concentrated; and the need to build a strong broad based domestic tax system drawing from a diverse set of sectors and tax instruments, to strengthen self-reliance in financing essential public service. (Punchng.com)

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