Nigeria s Investment Climate and Economic Outlook FEDERAL MINISTRY OF INDUSTRY, TRADE & INVESTMENT

Transcription

1 Nigeria s Investment Climate and Ecnmic Outlk DR. OKECHUKWU ENELAMAH HONOURABLE MINISTER OF INDUSTRY, TRADE AND INVESTMENT

2 Objectives Nigeria s Ecnmy An Overview Ecnmic Climate Refrm Imprving the Ease f Ding Business Nigeria s Ecnmic Outlk fr 2016 Cnclusin 2

3 Ecnmy Overview Nigeria is the largest ecnmy in Africa, and the 26 th largest in the wrld Demgraphic Ptential: Mst ppulus cuntry in Africa; yuthful ppulatin median age f 19 Nigeria is Africa s largest il prducer; gvernment depends n il and gas sales fr mre than seventy percent f revenues, and ninety percent f freign exchange Glbal slump in il prices has had an adverse impact n fiscal psitin, and n the currency Grwth averaged 6 percent between 2005 and 2014; slwed t under 3 percent in

4 Nigeria is facing challenging times, arising frm a cmbinatin f dmestic and freign circumstances Uncertainty abut Plicy thrust f new gvernment Change f gvernment and uncertainty abut ecnmic thrust Implicatins f Falling Crude Oil Prices n Gvernment Revenues Prices dwn abut 70% since mid-2014 Pssible adverse effect f Iranian il Implicatins f lwer grwth in China n Emerging Ecnmies Implicatins fr cmmdity prices and impact n the glbal markets Strengthening Dllar Several emerging market currencies have depreciated against the dllar Implicatin f the winding-dwn f quantitative-easing 4

5 hwever, the fundamentals f the Nigerian ecnmy remains strng in the mid-term Implicatin Size Prductivity and demgraphic ptential 170mm+ peple Nigeria has largest ppulatin in Africa and 7 th largest in the wrld Diversificatin already underway Current lw prductivity acrss key ecnmy sectrs Large dmestic market Large unskilled and semi-skilled labr frce that can be emplyed at lw wages Ptential fr innvatin and hme-grwn technlgy Ptential t significantly imprve labr prductivity with imprved infrastructure Ptential t increase cntributin f the wrking age t the GDP f the cuntry Abundant natural resurces Strengthening demcratic institutins Nigeria has the 10th largest prven Surce f additinal gvernment il reserves (37mn barrels) and 9th revenues and emplyment largest natural gas reserves (~5Tr m3) cmmercially viable minerals and arable land 17 years f demcracy Electins becming mre credible Successful transfer f pwer t ppsitin party Stability f plitical institutins Mre wnership f the demcratic prcess by citizens 5

6 Nigeria has a burning platfrm t rapidly accelerate investments int the nn-il sectr Our leaders have ver relied n il mney t the detriment f ther sectrs Nw that the price f il has crashed, we are nw facing serius ecnmic challenges we will engage in cmmercial agriculture and mining as well as resuscitate the abandned agrallied industries Buhari, 2015 speech Nt nly d il and gas accunt fr mre than 90 per cent f Nigeria s exprt revenues, which have rughly halved in the past six t eight mnths, the gvernment relies n them fr 70 per cent f fiscal revenues. S the 45 per cent fall in Brent crude since last June has wreaked havc n its financial health. Financial Times, July The Nigerian ecnmy needs t mve away frm dependency n il We are carefully assessing ur exchange rate regime keeping in mind ur willingness t attract freign investrs 2016 Budget Speech Internatinal business shying frm investing in Africa Investr cnfidence abut the utlk has remained weak, and financing is likely t becme mre difficult and mre cstly fr everyne IMF, January 2016 The il industry, with its histry f bms and busts, is in its deepest dwnturn since the 1990s New Yrk Times, January 2016 I see an immediate pririty a fundamental change The new reality f lw il prices and lw il revenues means that the fiscal challenge facing gvernment is n lnger abut hw t divide the prceeds f Nigeria s il wealth, but what needs t be dne s that Nigeria can deliver t its peple the public services they deserve be it in educatin, health r infrastructure. Christine Largarde Managing Directr, IMF 6

7 Building the platfrm fr sustained ecnmic grwth The new gvernment came int ffice prmising t fcus n three key areas: Security, Anti-Crruptin (Gvernance), and The Ecnmy. Has demnstrated the plitical will Fully implementing the Treasury Single Accunt (TSA) Cmmenced the plugging f revenue leakages, pursue lted public funds recvery Has unveiled a budget that seeks t invest substantially mre in infrastructure than in previus years 7

8 Federal Ministry f Industry, Trade and Investment s Visin Our visin is built n FOUR Pillars: CREATE an Enabling Envirnment fr Industry, Trade and Investment in Nigeria IMPLEMENT the Nigeria Industrial Revlutin Plan (NIRP) CHAMPION the cause f Nigeria s MSMEs, as a means f creating jbs and achieving inclusive grwth ATTRACT practively lng-term lcal and freign investment 8

9 As Nigeria aspires t becme Africa s leading ecnmy, we have t becme mre business friendly EASE OF DOING BUSINESS RANKING TODAY EASE OF DOING BUSINESS RANKING IN 5 YEARS ASPIRATIONAL EASE OF DOING BUSINESS RANKING IN 10 YEARS Tp 50 Tp 100 #169 Nigeria has a visin t imprve the pr Nigerian business envirnment and Ease f Ding Business ranking acrss key regulatins, prcesses, supprt systems, executin capabilities and training amngst ther metrics 9

10 We are develping a cmprehensive apprach fr imprving the Ease f Ding Business Analyse the rt causes fr the pr Nigerian business envirnment Assess EDB ranking acrss key regulatin, prcesses, supprt systems, executin capabilities, training Establish near t medium term targets (6 t 18 mnths) t imprve the business envirnment, including apprach, respnsibilities and key perfrmance indicatrs Mnitr the implementatin against the targets and indicatrs Define apprpriate supprt measures t ensure cmpliance with the targets Enabling Envirnment Secretariat Cmmunicate regularly with the investment cmmunity and ther stakehlders (develpment partners, scial agencies, etc.) Share prgress f bjectives and key interventin initiatives 10

11 Ecnmic Outlk Oil prices have risen marginally, nw arund $40 per barrel, buying sme respite frm a challenging fiscal situatin but diversificatin agenda will cntinue t be implemented 2016 Apprpriatin Bill has just been passed int law by Parliament; awaiting Presidential signing 30 percent f the budget sum has been earmarked fr infrastructure prjects; in naira terms; mre than three times the ttal infrastructure spending in 2015 Budget als cntains 2.5 billin dllars Scial Investment spending CCT, Micr-credit and Jb Schemes Finance Ministry plans t inject 350 billin naira int the ecnmy ver the next quarter, specifically n infrastructure prjects Presidential-level Ease f Ding Business Initiative t be launched sn Gvernment and Private Sectr partnering n multi-billin dllar Infrastructure Develpment Fund 11

12 Cnclusin Nigeria is facing a challenging ecnmic situatin, largely n accunt f the drp in il prices and nn-diversificatin f gvernment revenues The new gvernment is cmmitted t taking advantage f the pprtunities presented by the fiscal crisis t restructure the ecnmy and diversify gvernment revenues The wrk f ecnmic refrm will cntinue t be underpinned by a fcus n security and transparency Nigeria is pen and ready fr business and investment 12

13 Thank yu