Federal government has commenced the process of repatriation of foreign denominated assets into the formal financial sector of the economy as part of efforts to boost intermediate and long-term FX supply.
Minister of finance and coordinating minister of the economy Mr Wale Edun made the disclosure, adding that the repatriation would take effect in the second quarter of 2024. He reiterated the government plan to begin local issuance of foreign denominated federal government Bonds expected to be implemented in early Q2 2024.
The federal government said it has utilised a portion of the Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 to settle Ways and Means advances from the Central Bank of Nigeria (CBN) totaling N4.83 trillion, according to Edun.
The move is aimed to enhance the supply of ‘sticky’ foreign capital to vital sectors of the economy. Despite increased costs to the Government, Mr. Edun noted that the upsurge in the pricing of FG securities is bolstering US Dollar inflow into the economy.
Speaking at the Lagos Business School breakfast club on the topic ‘Reconstructing the Economy for Growth, Investment and Climate Resilience Development’ recently, Mr Edun said the government has issued presidential executive orders to boost US$ liquidity in the economy.
The minister said the government is also pursuing up to 6GW of generated and delivered electricity in H2, 2024. He said the government is also up-scaling and out-scaling of agricultural value chain projects.
As an economic intervention, government has given a presidential directives in the oil & gas sector
(as an example of sector focused intervention). Specifically, in the oil and gas companies, the government gave tax incentives, exemptions, and remissions. The government said it is prioritising reduction of petroleum sector contracting costs and timelines while also ensuring local content compliance for value.
“Government is implementing a suite of key enablers in order to successfully attract and retain long-ter domestic and foreign direct investments in our economy,” Mr Edun said at the Lagos event.
He said the administration is engaging with manufacturers to develop programmes and policies that would cushion the impact of current challenges and stimulate mass-scale productive activity across multiple sectors.
Apart from that, Edun said government is deploying fiscal tools to significantly increase the supply of grain and other inputs, creating jobs and increasing the exports of farm produce remain utmost priority
Food inflation is the primary driver of inflationary pressure on our economy. (31.7 percent as of March 2024). Experts believe that increasingly stable and predictable exchange rates, risk-reflective yields and targeted policies would increase the ability to attract local and foreign capital.