Post on 23-Dec-2015
transcript
NIGERIA:
IMPLEMENTING AN INVESTMENT-FRIENDLY TRANSFORMATION AGENDA
DR. NGOZI OKONJO-IWEALACOORDINATING MINISTER FOR THE ECONOMY
HON. MINISTER OF FINANCE17th NIGERIAN ECONOMIC SUMMIT
NOVEMBER 11, 2011
BACKGROUND• WEAK GLOBAL ECONOMIC ENVIRONMENT
– POOR SUSTAINABILITY/DEBT OUTLOOK IN SEVERAL EUROZONE COUNTRIES• SOVEREIGN DEBT CRISIS IN THE EUROZONE; PARTICULARLY
GREECE & ITALY• RECENT DOWNWARD REVISION IN PROJECTED EUROZONE GDP
UNTIL 2016• EUROZONE GDP REVISED DOWNWARD TO 1.6% GROWTH
FORECAST IN 2011 FROM 1.9% . GDP EXPECTED AT 0.8% (1.6%) & 1.6% (1.8%).
• MANUFACTURING OUTPUT IN FRANCE, GERMANY, ITALY AND SPAIN AT 2 YEAR LOW
• 2012 UNEMPLOYMENT RATE GOING UP TO 8.7% FROM 7.8%
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BACKGROUND (CONTD.)• WEAK GLOBAL ECONOMIC ENVIRONMENT (CONTD.)
– UNCERTAINTY IN US FISCAL POLICY OUTLOOK
• US DEBT TO GDP RATIO EXPECTED TO GROW 94.4% BY THE END OF 2011, 99.4% BY 2012 AND 102.2% BY 2013
• GDP GROWTH FORECAST FOR 2010 REVISED DOWNWARD TO 2.5% FROM 3.3%
– EMERGING MARKET FORECAST REVISED DOWNWARD
• EMERGING MARKET GROWTH REVISED DOWNWARD TO 6.4% FROM 6.6%
• INDIA’S GDP GROWTH FORECAST FOR 2012 REVISED DOWNWARD TO 7.82%
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DIRECT POSSIBLE IMPLICATIONS FOR NIGERIA• EUROPE AND THE USA ACCOUNT FOR OVER 60% OF EXPORTS
• OIL ACCOUNTS FOR OVER 70% OF TOTAL BUDGET REVENUE.
• MORE VOLATILITY IN ECONOMIC GROWTH
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KEY FOCUS OF THE REFORM AGENDA:– ENSURE MACROECONOMIC STABILITY & SUSTAINABLE GROWTH
– CARRY-OUT STRUCTURAL REFORMS,
• PRIVATIZATION, LIBERALISATION, AND DEREGULATION.
– STRENTGHEN INSTITUTIONS, SUPPORT TRANSPARENCY, FIGHT
AGAINST CORRUPTION.
– INVEST IN PRIORITY SECTORS CREATING JOBS
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(A) FISCAL CONSOLIDATION & OPTIMIZATION
REIN-IN GOVERNMENT EXPENDITURE:
NEED TO BUDGET AT PRUDENT OIL PRICES - $70 FOR 2012
ENSURE THAT FISCAL DEFICIT IS FINANCEABLE AND KEPT BELOW 3% OF GDP
REDUCE RECURRENT EXPENDITURE FROM 74.4% OF TOTAL EXPENDITURE TO BELOW 70% BY 2015
INCREASE CAPITAL EXPENDITURE BY 1.5% PER YEAR (I.E. AT LEAST 5% BY 2015)
STEADY DOMESTIC DEBT AT 16.4% OF GDP
REFORM FERTILIZER, PETROLEUM, AND OTHER INEFFICIENT SUBSIDIES .
NEED TO FOCUS ON COMPLETING EXISTING STOCK OF ONGOING PROJECTS
ENSURE MACROECONOMIC STABILITY & SUSTAINABLE GROWTH
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INCREASE NON-OIL REVENUES
• TAX REVENUES
– REDUCE MULTIPLICITY OF TAXES AND LEVIES AND IMPROVE COLLECTION EFFICIENCY
– BETTER ENFORCEMENT OF CORPORATE TAX COLLECTION
IMPROVE CONTRIBUTION FROM REVENUE GENERATING AGENCIES
– VAT AND CUSTOMS
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ENSURE MACROECONOMIC STABILITY & SUSTAINABLE GROWTH
(B) COORDINATION OF MONETARY AND FISCAL POLICIES
EXCHANGE RATES STABILITY AND COMPETITIVENESS
LOWER INTEREST RATES
SINGLE DIGIT INFLATION RATE
(C)IMPROVE SOVEREIGN CREDIT RATING
– FITCH RESTORED NIGERIA'S RATING TO BB – (STABLE)
(D) IMPLEMENT THE SOVEREIGN WEALTH FUND (SWF):
BUILT FROM EXCESS CRUDE ACCOUNT. IT IS DESIGNED TO:
REGULATE PRO-CYCLICALITY IN THE BUDGET
SUPPORT INFRASTRUCTURAL DEVELOPMENT
INVEST IN FUTURE GENERATIONS 9
ENSURE MACROECONOMIC STABILITY & SUSTAINABLE GROWTH
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WHY THE SWF?A. “GOOD PRACTICE” IN ECONOMIC MANAGEMENT.
- CUSHION THE IMPACT OF OIL PRICE VOLATILITY ON NIGERIA’S ECONOMIC GROWTH
B. STORE NATIONAL WEALTH FOR FUTURE GENERATIONS AND RESTRUCTURE/DIVERSIFY THE ECONOMY.
- PROVEN OIL RESERVES ARE DEPLETING , LESS THAN 40 YEARS LEFT.
C. OPTIMAL INVESTMENT VEHICLES FOR STATE FUNDS
D. SOURCE OF FUNDING TO ADDRESS NIGERIA’S ENORMOUS INFRASTRUCTURAL CHALLENGES.
E. PROMOTE FOREIGN INVESTMENT- AVAILABILITY OF A “BUFFER” PORTRAYS GOOD RISK MANAGEMENT.
IMPLEMENTATION IS COMMENCINGSEE RECENT NEWS MAGAZINE ADVERTS FOR EXECUTIVE POSITIONS.
CARRY-OUT STRUCTURAL REFORMS
Source: World Bank Enterprise Survey 2011
POWER SECTOR: LACK OF ELECTRICITY IS THE BIGGEST OBSTACLE TO PRIVATE SECTOR DEVELOPMENT IN NIGERIA
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IMPLEMENT POWER SECTOR ROADMAP • GENERATE, TRANSMIT, AND DISTRIBUTE STABLE AND RELIABLE ELECTRICITY.• COMPLETE PRIVATISATION PROCESS FOR GENERATION AND DISTRIBUTION.• COMPLETE KEY TRANSMISSION PROJECTS ACROSS THE COUNTRY• IMPLEMENT COST EFFECTIVE TARIFFS
FOCUS ON CUSTOMS AND PORTS REFORM SET ACTION PLAN TO ENSURE 48 HOURS CARGO CLEARANCE. ACTIONS ALREADY TAKEN INCLUDE: STREAMLINING THE NUMBER OF AGENCIES FROM 14 TO 7 NAMELY, NCS, PORT HEALTH, IMMIGRATION, NIGERIAN POLICE, NPA, NIMASA, AND NDLEA ; MANDATING 24-HOUR OPERATIONS (IN SHIFTS) FOR CUSTOMS AND OTHER AGENCIES DISBANDING NCS TASK FORCE THAT HARRASS CARGO ON THE HIGHWAY. STREAMLINING PAPERWORKAND BUREAUCRATIC REQUIREMENTS FOR PORTS AND CUSTOMS CLEARANCE. INVESTING IN PORTS INFRASTRUCTURE DEVELOPING CONTAINER MANAGEMENT STRATEGY.
FINANCIAL SECTOR REFORMS – ALREADY COMPLETED
IMPROVE DOING BUSINESS RANKING (REGISTERING PROPERTY, STARTING A BUSINESS) 12
IMPROVE TI RANKING – NIGERIA CURRENTLY RANKED 134 OUT OF 178 COUNTRIES
FEDERAL, STATE, AND LOCAL GOVERNMENT BUDGET TRANSPARENCY PUBLISH ALL LEVELS OF GOVT BUDGET REVENUES AND EXPENDITURES
EITI
PENALIZE IMPUNITY AND PROSECUTE STOLEN ASSETS RECOVERY
EFCC AND ICPC
IMPROVE PROCUREMENT AND FINANCIAL MANAGEMENT PUBLICATION AND POSSIBLE DEBARRMENT OF OFFENDING FIRMS
IMPROVE FEDERAL AND STATE LEVEL PROCUREMENT
STRENGTHEN INSTITUTIONS AND SUPPORT GOOD GOVERNANCE
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