The Federal Government no longer depends on the Central Bank of Nigeria (CBN) to fund its emerging obligations, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said yesterday.
He attributed the feat to fruits being yielded by ongoing efforts to improve efficiency and ramp up revenues.
The minister said the government has exited the use of Ways and Means advances for meeting emerging financing obligations, a practice that had been rampant.
Ways and Means advances are loan facilities granted by the Central Bank of Nigeria (CBN) as lender of last resort to finance the government during periods of budget shortfalls.
According to Edun, concerted fiscal measures being implemented by the government have recorded a 100 per cent increase in revenues, particularly the domestic components, which underlined improving efficiency due to the application of technology to government management.
The minister spoke in Lagos at the Access Bank Annual Corporate Forum 2024. The theme was: “Nigeria’s Economic rebirth: Hopes and implications.”
Edun said President Bola Ahmed Tinubu has fully supported the efforts of the financial management team to put in place a world-class treasury management system that ensures that the country’s finances are managed in efficient ways.
He said the government was working to plug all loopholes and optimise Nigeria’s financial potential by ensuring that the country’s sovereign assets are fully harnessed for growth and development.
The minister noted that Nigeria has huge stranded assets, which the government would unlock to boost its financing liquidity.
Stranded assets are loosely dormant assets, which are no longer earning returns or being put to use due to various reasons.
Edun pointed out that as part of the gains of the government’s macroeconomic reforms, the country now records a monthly net inflow of about $2.35 billion into its foreign exchange (forex) reserves in the past seven months.
According to him, the increase in foreign reserves has contributed significantly to the stability of the naira in the forex market.
He said: “We have relative currency stability and we’ve seen a gradual elimination of multiple exchange rates. We also have foreign exchange liquidity.
“The gross reserves are up. There has been a net inflow in the first seven months of this year of about $2.35 billion every month.
“On the fiscal side as well, government revenues are growing and the key to government revenue is not so much that government has revenue to compete with the private sector.”
Edun reiterated that the government is working to ramp up crude oil production as a buffer for the fiscal revenues, saying that the country is on track to produce the targeted two million crude oil barrels per day (bpd) before the end of 2024.
He added that the government is implementing policies to diversify its exports, particularly in the service sector.
Managing Director of Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane, who did a thematic presentation on the outlook of the economy by 2026, said the country has a generally positive outlook if key economic programmes are followed through.
He said Nigeria is currently confronting structural and transitory economic challenges.
According to him, the current reforms are aimed at resetting the economy for industrial takeoff.
He said the reforms face pushbacks and backlashes partly due to poor reform designs, lack of sequencing, and clash of interests.
Rewane believes the economy will grow at 3.5 per cent or approximately $400 billion by 2026, moving from third position to becoming the second-largest economy after South Africa.
He said inflation would continue to decline to around 22 per cent while there would be a reduction in interest rate with the Monetary Policy Rate at around 20 per cent.
Rewane said: “In 2026, we would have a proper forex system that is functioning, due to intervention funds, diaspora remittances, and exchange rate adjustment policies.
“Dangote Refinery and production from modular refineries will guarantee regular petrol supply and will be quoted on the Nigerian Exchange (NGX), while stock market capitalisation will be N58 trillion.”
He outlined that NGX’s performance would be supported by the listing of big-cap stocks like Dangote Refinery and NNPCL.
According to him, blue-chip companies are restoring shareholder value resulting from forex losses, and moderation in rising Treasury Bill rates will encourage greater diversification and participation in the NGX.
Managing Director of Access Bank Plc, Mr. Roosevelt Ogbonna, said the bank was committed to working with the government and all stakeholders to champion the growth of the economy.
Ogbonna said: “This year, the focus on building a collective pathway towards the journey of Nigeria’s economic rebirth and revitalisation reflects our commitment to not only adapting to change but also leading it.”
President of Dangote Group, Alhaji Aliko Dangote, emphasised the need for the government to raise its support for domestic investors and entrepreneurs.
According to him, the confidence in local investors typically attracts foreign investors while adequate support for local industries can help the country create a circular economy where all stakeholders benefit along the entire value chain.
