As Cardoso sets up task force on remittances
The Federal Government said yesterday it planned to float a Diaspora Bond to attract funds held abroad by Nigerians at home and in the Diaspora.
The Minister of Finance and Coordinating Minister of the Economy Mr. Wale Edun disclosed this, yesterday, at his wrap up media briefing at the end of the 2024 Spring Meetings of the IMF and World Bank.
His words, “In terms of remittances, it is certainly one of the ways we can increase supply of foreign exchange and investment in the country.
“There are Nigerians abroad who are doing very well. 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.
“A Diaspora Bond and we think that 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, the minister said that that Nigeria has qualified for the processing of a $2.25 billion World Bank facility.
According to him, “Nigeria has qualified for the processing of a total package of World Bank $2.25 billion of, 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.
“In addition, there is a similar Budgetary Support, low-interest funding from the African Development Bank and clearly, there are 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.
His words, “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.
“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 and increase, 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 reduce poverty.
“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.”
Tacking debt with higher revenue
On debt challenges, he said that revenue remained the only way out and that for Nigeria, the first source of revenue was oil.
The Minister said that oil production has increased from 1.2 million bpd to 1.6 million bpd since President Tinubu came to power.
He said that with a 2 million bpd quota from the Organisation of Petroleum Exporting Countries (OPEC), the administration was looking to ramping production to 2 million, including 300, 000 barrels of condensate.
Cardoso sets up task force to facilitate inflows
The Governor of the Central Bank of Nigeria (CBN) Mr.Olayemi Cardoso disclosed that a task force has been set up to ease the flow of remittances into the country.
His words, “It has indeed been a fruitful few days of engaging with our esteemed international policy counterparts and stakeholders from around the world, as well as Nigeria’s investors. We came here with a very clear agenda and have held highly significant, intentional meetings – each one with an objective to further support the stability and ultimate growth of the Nigerian economy.
“Besides our meetings with multilateral financial institutions, and foreign investor groups with a keen interest on developments in Nigeria, including a critical gathering at the US Chamber of Commerce, we had very productive discussions with leading International Money Transfer Operators (IMTOs), where we collectively committed to doubling remittance flows through formal channels into Nigeria in the immediate short to medium term.
“This target is both ambitious and achievable, and we’re wasting no time in setting up a collaborative task force, reporting to myself, to drive progress and address any bottlenecks that hinder flows through formal channels.
In the six months since assuming the position of Central Bank Governor, the challenges have been significant, from grappling with inflation to addressing volatility in the foreign exchange market. However, with relative stability now achieved, particularly in the FX market, we have transitioned from firefighting to strategic planning across key areas.
”These areas include improving the ease of doing business in Nigeria, to consolidate and sustain the gains through an efficient and transparent market system
and boosting financial and economic inclusion for small businesses and households–interrogating all potential ways to leverage smarter use of technology, and remote banking to reduce the cost of transactions and expand accessibility to the financial system.
“April saw the naira emerge as the best-performing currency globally, supported by
bullish sentiment from leading international investment institutions. Our FX market is experiencing robust activities, with turnover reaching levels not seen in over seven years.
“This liquidity boost instills confidence among investors, businesses, and other partners, ensuring fluidity in their interactions with Nigeria’s FX markets.
However, we remain vigilant, recognizing the challenges that persist, such as elevated inflation driven by rising food prices, transportation costs, and energy expenses.
“We note that inflation though rising is doing so at a decelerated rate and we are confident will soon commence a fall. Security concerns in food-producing regions an infrastructure challenges also demand attention.
“The CBN has implemented a number of policy reforms to address some of these various pressures and, while I am confident enough today to talk about some of our early success, I am at the same time extremely mindful of our ongoing challenges.
“We still have work to do in solving all our problems, however, we do have a determined pathway and a sequenced approach to tackling all challenges ahead,
working hand in hand with our key stakeholders including investors, banks, businesses – and, notably, our counterparts on the fiscal side.
“We have recommitted our stance to orthodox monetary policy, and it is heartening to see the efforts being put up have started yielding results especially in terms of rebuilding trust and confidence in our economy and the leadership.
Diaspora target
“The Diaspora target is to double our current level. This may appear ambitious but I am confident that we will be able to achieve it.
“We have transitioned from fire fighting to strategic planning in key areas. These areas include the improving the ease of doing business in Nigeria.
“To consolidate and sustain the gains of an efficient a d transparent market system and boosting economic inclusion for small businesses and households.
“Interrogating all potential ways to leveraging smarter use of technology and remote banking to reduce to cost of transactions and expand accessibility to the financial system.”
Cardoso on FX market movements
The governor said that movements in the market should be expected but that his team would remain focused on ensuring a transparent stable FX market.
His words “Expect that there will be increases here and there, ups and downs and from what I gathered yesterday, the Naira has again strengthen overnight. So I think the most important thing to say here is that we are doing everything possible to have a stable exchange- exchange rate that finds adequate price discovery level.”