.Nigeria’s efforts at ramping up foreign exchange flows qualifies it for
$2.25bn W/Bank facility.
By Hillary Asemota
The Minister of Finance and Co-ordinating Minister of the Economy, Mr. Wale Edun, has disclosed that the Federal Government is ramping up plans to issue new Diaspora bonds later this year (2024).
The fund, he added will compliment and shore up efforts the fiscal side of the economy in government’s monetary policy reforms driven by the Central Bank of Nigeria (CBN).
This is coming even as the World Bank-IMF Spring Meetings winds up, the Minister revealed that the Diaspora Bond to attract funds held abroad by Nigerians at home and in the Diaspora.
The Minister made the disclosure during his Wrap Up 2024 Spring Meetings’ media briefing held in Washington DC, United States of America.
He inderscored that remittances are certainly one of the ways the nation can increase the supply of foreign exchange and investment in the country.
The Minister further informed that there are Nigerians abroad who are doing very well, adding, that even Nigerians in Nigeria with funds abroad that can be counted as remittance and in order to increase the supply of foreign exchange into the economy, government is looking at attracting those funds through a Diaspora kind of instrument
Diaspora bond, according to him will be attractive enough for Nigerians abroad and for foreign holdings of foreign currencies and look to having a substantial issue later in the year.
As part of the efforts of the administration to increase foreign exchange inflows, Edun informed further
that Nigeria has qualified for the processing of a $2.25 billion World Bank facility.
“Nigeria has qualified for the processing of a total package of World Bank $2.25 billion, well there is no free money, but it is close to a grant for 40 years, moratorium of 10 years and about 1 percent interest. So that is also part of the flow that you can count.” the Minister said
In addition, he explained: “There is a similar budgetary support, low-interest funding from the African Development Bank (AfDB) and clearly, there is also on-going discussions with Foreign Direct investors.
Some of these things take longer than you expect, but there are relatively advanced discussions on major foreign direct investment inflows into the country, specific transactions with companies, institutions and authorities*
The Minister said that the Spring Meetings presented an opportunity to engage the international audience on a global stage.
“We have had the opportunity of speaking to international investors, portfolio investors and those International Direct investors that will bring what I will describe as quality funding.
“The kind of funding that builds factories and creates jobs.” he stated.
The Minister noted that the response from all of them, “I can say, without exception, is that of greater confidence in the economic management of the country and greater interest and willingness to invest.
“But in addition, not just the international community that we addressed, it is also critical that we are a private sector-driven economy and that is the policy of President Bola Ahmed Tinubu, to encourage private domestic and foreign investment to grow the economy, create jobs and reduce poverty.
“But also we have other partners – the multilateral organisations , development banks, bilateral financiers, grant-givers, foundations such as the Bill & Melinda Gates Foundation and others.
“The whole eco-system of international finance, we have engaged with all of them.
“We have come away with funding to provide electricity to 300 million people in Africa that the largest portion will come to Nigeria. And you know what the provision of electricity does to increasing productivity and poverty reduction.
“We can also say that we have a bigger say for Africa through an additional Chair on the Board of Directors of the International Monetary Fund. I think it is a major success for Africa as a whole.” the Minister concluded.
While speaking on the sources of international funding to the Nigerian economy, he listed diaspora remittances, foreign portfolio investments, and facilities from the World bank as well as other international development partners.
Edun also tapped on issuing dollar-denominated securities specifically targeted at Nigerians in the diaspora and those with foreign-denominated savings in Nigeria as another measure to attract forex inflows into the country.
He disclosed that the Federal Government hopes to issue the bonds later this year and highlighted the efforts of the fiscal side of the economy in complimenting the recent monetary policy reforms by the Central Bank of Nigeria (CBN).
According to the Minister: “The issuing of government securities at an interest rate closer to the CBN’s monetary policy rate (MPR) is an indication of the collaboration between both sides of the economy in tackling inflation in the country and attracting forex inflows.”
He listed the agricultural sector as one area the President Tinubu-led Administration is looking to spur growth in the medium term, noting that efforts in that area include the distribution of fertilisers and seeds to reduce food prices and enhance food security.
Other programs, according to the Minister, are: increasing power generation to about 6000 megawatts within six months, provision of infrastructure, especially housing with the goal of making low-interest mortgages available to Nigerians, revamping of the social investment program and proposed economic stabilisation plan.
The end of the 2024 World Bank-IMF Spring Meetings media briefing was attended by the Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, Permanent Secretary, Federal Ministry of Finance, Mrs. Lydia Shehu Jafiya and other top gov