The Federal
Government is pursuing a multi-pronged strategy that includes the issuance of a
new Diaspora Bond, a World Bank loan facility and increased engagement with
foreign direct investors in a bid to attract foreign exchange (forex) and
bolster economic growth.
The Minister of
Finance and Coordinating Minister of the Economy, Mr. Wale Edun, revealed plans
for a Diaspora Bond during the wrap-up press briefing following the 2024 World
Bank-IMF Spring Meetings in Washington DC.
"There are Nigerians abroad who are doing very well. We want to
attract those funds through a Diaspora Bond, an instrument we believe will be
attractive to Nigerians abroad and foreign currency holders," Mr. Edun
said.
The issuance of the
bond, targeted for later this year, aims to capture a significant source of
foreign exchange – remittances from Nigerians living abroad.
Beyond the Diaspora
Bond, Nigeria secured a $2.25 billion loan facility from the World Bank. "This is practically a grant," Mr.
Edun emphasized, highlighting the favorable terms: a 40-year repayment period
with a 10-year grace period and a low-interest rate of one per cent.
The World Bank-IMF
Spring Meetings provided a platform for Nigeria to engage with international
investors also.
He said:
"We've had the opportunity to speak with international portfolio investors
and those seeking direct investments that create jobs." He expressed
optimism, stating, "The response from all of them has been one of greater
confidence in our economic management and a stronger interest in
investing."
The Finance
Minister underlined the government's commitment to tackling inflation. He
pointed to the recent issuance of government securities at rates closer to the
Central Bank of Nigeria (CBN's) Monetary Policy Rate (MPR) as an example of
collaboration between fiscal and monetary authorities.
Mr. Edun outlined
key areas where the administration is prioritizing growth. These include:
agriculture, by distributing fertilizers and seeds to reduce food prices and
ensure food security; power generation, by increasing power generation to 6,000
megawatts within six months; infrastructure development, particularly
affordable housing through low-interest mortgages; revamping existing social
programs and development of a comprehensive economic stabilization plan.
While international
funding is crucial, Mr. Edun emphasized the importance of private sector
investment, both domestic and foreign. He reiterated President Bola Tinubu's
commitment to fostering a private-sector-driven economy that creates jobs and
reduces poverty.
The Minister
highlighted the government's engagement with a broad range of stakeholders,
including: Multilateral organizations (World Bank, African Development Bank);
Development banks; bilateral financiers; grant-givers and Foundations (e.g.,
Bill and Melinda Gates Foundation)
Mr. Edun concluded
by expressing optimism for Africa's role in the global financial
landscape. "We secured an
additional Chair position on the Board of Directors of the International
Monetary Fund. This is a major win for Africa as a whole," he said.
The Nigerian
government's multi-pronged approach to attracting forex and stimulating
economic growth shows promise. Whether these initiatives achieve their intended
goals remains to be seen, but the engagement with international institutions
and a focus on private sector investment offer a ray of hope for a more
prosperous future for Nigeria and Africa.
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