Competition for places
Governments are wary of country league tables and indices, and the FGN will not be pleased with the findings of The Global Competitiveness Report, 2017-18, which was published this week by the World Economic Forum (WEF). Nigeria has moved two places up the league to no 125 (out of 137) but the report notes that its score has declined every year since 2012. This is a diplomatic way of saying that enough other countries have performed worse than Nigeria to enable it to rise up the table.
- The WEF conducted a survey this year to determine the most problematic factors for doing business. In Nigeria’s case, in descending order the four leading factors were: inadequate infrastructure, fx regulations, access to financing and corruption. None come as a surprise although we wonder at the inclusion of fx regulations if respondents had witnessed the latest changes.
- The success of such indices can be measured by the level of responses from governments. The previous administration set targets for Nigeria’s position in selected league tables. In our view governments can be distracted by the large number published, which often overlap. The WEF’s reports cover much of the same ground as the World Bank Group’s Ease of Doing Business reports.
- Governments can claim that they are already responding to issues raised. This week the presidential enabling business environment council in Abuja approved a new national action plan, known in the industry as NAP 2.0. The plan sets out 60 priority objectives to address many of the weaknesses identified in the WEF and World Bank reports. The weaknesses include securing construction permits, starting a business, getting electricity and getting credit.
- Would-be investors have to feel comfortable with their host authorities. China’s Huajian Group has invested heavily in shoe manufacturing in Ethiopia and is said to be considering a similar plant in Abia State. In Ethiopia it proceeded from its initial talks with the government to its first production at breakneck speed. Can it achieve the same (or close to it) in Nigeria?
- Of course there are some positives in the report to share, and we highlight some stronger rankings within the 12 pillars that make up the overall ranking: strength of investor protection (within institutions) at no 31, government debt (macro environment) at no 8, prevalence of non-tariff-barriers (goods market efficiency) at no 36, redundancy costs (labour market efficiency) at no 7 and domestic market size index (market size) at no 21.
Nigeria’s crude account held US$2.31bn as of Sept 22: Nigeria’s excess crude account stood at US$2.31bn as of September 22, the finance minister said on Thursday, slightly lower than a year earlier despite a recovery in production. The figure, given by Finance Minister Kemi Adeosun according to a government statement, fell from US$2.45bn on the same date last year. Militant attacks on oil facilities last year reduced Nigeria’s crude production by as much as a third. (Source: Reuters)
Nigeria’s Fidelity Bank offers to buy back US$300m of debt, to issue new notes: Nigeria’s Fidelity Bank Plc has offered to buy back US$300m of debt and intends to issue new notes, aiming to extend the maturity of its debt profile, it said on Thursday. The US$300m of debt, with an interest rate of 6.875%, is due to mature 9 May 2018, Fidelity said in a statement. It will offer US$1,010 per US$1,000 of notes held. (Source: Reuters)
NIRSAL disburses N2.63bn to 24,732 rice farmers: The Nigeria Incentive Based Risk-Sharing System for Agricultural Lending (NIRSAL) yesterday disclosed that it had successfully disbursed N2.63bn to 24,732 rice farmers for the 2017 planting season. This, it said, was in continuation of its mandate to facilitate the flow of finance to the agriculture sector and help achieve the objectives of the Economy Recovery Growth Plan (ERGP) of the Buhari administration. (Source: Thisday)
FAAC allocation increased by N169.9bn in August: The Federation Account Allocation Committee on Thursday shared the sum of N637.7bn among the three tiers of government. The amount, which is for statutory allocation for the month of August, represents an increase of N169.9bn over the N467.8bn which the committee allocated in the month of July. Addressing journalists shortly after the meeting which was held at the headquarters of the Ministry of Finance in Abuja, the Accountant-General of the Federation, Ahmed Idris, said there was a significant increase in revenue for August. (Source: Punch)
FG to borrow US$5.5bn via Eurobonds by year-end: The FG is planning to sell as much as US$5.5bn of Eurobonds in the next three months to fund capital projects and replace naira-denominated debt, the Debt Management Office has said. Yields on existing bonds rose to the highest in two months. The new offer will bring the amount raised through Eurobond sales by the nation this year to more than US$7bn. The President Muhammadu Buhari administration, through the DMO, is planning to restructure the country’s debt portfolio to almost double the portion of foreign borrowing in a bid to reduce financing costs. (Source: Punch)
Firm to boost power generation with US$250m gas plant: A power plant development company, Proton Energy Limited, has announced plans to inject additional 150 megawatts of electricity into the national grid. The Executive Vice-Chairman, Proton Energy, Oti Ikomi, disclosed this during the ground-breaking of the Proton Delta Sunrise Project, a gas-fired power plant in Sapele Local Government Area of Delta State, on Thursday. Ikomi explained that the project, with US$250m of foreign direct investment, would enhance economic growth in Delta State and the country at large. (Source: Punch)