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Enelamah: Nigerians Will Start Witnessing Huge Foreign Direct Investments in 2017

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Dr. Okechukwu Enelamah
  • Nigerians Will Start Witnessing Huge Foreign Direct Investments in 2017

Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, in this interview with journalists said that trade and investment in Nigeria is about to be revolutionised, as key stimulus packages and other investment drives embarked upon by the Federal Government, will start to yield fruits from 2017.

Can you tell us the investments that came into the country, which can be trace to the efforts of the Buhari administration in the last one-year?

Yes, people are surprised about how big investment inflows have been in the last one-year, because they came in large chunks. But let me tell you that we have gotten well over $20b. This is because of the major infrastructural projects government is embarking upon. But again, what we call an inflow is not just about the money physically, but also the commitments that have come. So, if you look at the infrastructural projects that we are doing, there is N20b or more infrastructure projects with the China EXIM bank. It has been signed and it’s now being implemented around railways and related infrastructure. There is an agreement with General Electric for which $2b has been committed in the last one year.

There are private sector investments also. For instance, Chellarams, which sold a major part of their business to Kelloggs of the United States; that deal is worth about  $400million. There was a deal that was done by Chi- the fruit juice company with Coca-Cola, which is also worth hundreds of million of dollars. There is also a deal, where BUA sold something to one of the international players, which bought a part of that group. Again, it is sizable sum. However, we want to increase the steady inflow of foreign direct investment across all levels, because there are many more people waiting on the sidelines apart from the big stakeholders who are doing multi-billion naira infrastructural projects.

As you know, Nigeria Investment Promotion Council has just appointed a new head for the private sector. As a government we want to partner with the private sector, government doesn’t have all the money it needs to develop the country, therefore government is willing and committed to partnering with the private sector players. Another thing I want to say regarding investment is that the oil companies have reached an agreement that is now being finalised to bring in more money into the oil sector.

Government has talked a lot about diversifying the economy, what role is your ministry playing in this regard?

First, let me say that when I think about the Nigerian economy, I think in terms of what the economy has been traditionally, and what we want it to be with the ongoing reforms. I think in the past, what was good about the Nigerian economy is that the diversification process has started to some degree, if you look at the GDP and the composition. When the National Bureau of Statistics (NBS) rebased the economy, one of the things we found out was that the GDP was no longer what we thought it was. Services, for instance had grown, people were going into non-traditional areas and we found things like telecoms had grown, we found things like trade and other items had grown, traditional manufacturing was about 10 per cent and agriculture was about 20 plus percent. Oil, in terms of GDP was about 10 percent. However, when it comes to the revenues of government, we also found out that oil was still about 75 percent or more, even though that reform has started.

Secondly, we found out that the foreign exchange earnings of government; over 90 percent of it was also from oil. So, when we talk about the new economy that is diversified, what we want is to clearly diversify our sources of revenues in terms of foreign exchange earnings. In order to do that, we need to do a number of things.

One is that the sectors of the GDP that are significant, but don’t contribute revenue in monetary form need to be better monetized, which means we need to give them the resources they need to be more productive beyond subsistence level like agriculture. We need to empower our people to do productive agriculture that is profitable, so that they can pay taxes, they can export and do the things that people do, as opposed to just producing hand-to-mouth to eat, which is really part of GDP, but frankly doesn’t impact on the revenue in any form. It also means the government needed to be more attentive to the people.

What do I mean by that, we need to create a more formal economy not because we want to put more burden on people, but because we want to recognise them. Under a formal economy setting, it’s almost as if they are non existent, they are not registered anywhere, whereas if you look at the social intervention programme of government, one of the things we tell people is that we just want to know who you are, whether you are a trader, a market woman, or an artisan. When people talk about formal economy they think in term of the cost, the entire roadblock, the red tape and all the taxes they ask you to pay with no benefits. One of the things we have to do, is to make sure that it is really about the people. In order to diversify the economy away from oil, we also need to make the other sectors like agriculture, agro-processing, agric-business to become vibrant.

Finally, we are also working on the Nigerian industrial revolution plan as a key Programme of government that would help to diversify the economy and move it away from oil to agriculture.

There was a recent investment roadshow overseas by your ministry. What has been the impact?

It was a successful. I think what you find is that Nigeria is a country that people are genuinely interested in and I view that as an asset. There is no country we go to, no matter how big or small, the president goes along, where they don’t give us the highest treatment reserved for the most important country in the world. When we went to Germany, the president met with the Chancellor, and I had a business forum with the elite in the business sector. The president came and addressed them. And Germany is interested in working with Nigeria for several reasons. They are interested in automobiles. And the way they built their economy is that they train people beyond academic degrees, vocational training and they expressed interest to work with us.

There are a lot of benefits that will come from the Germany trip. They are also interested in investing in other areas that we are looking at, including renewable power. And we have a very strong Nigeria business association network, trade association that is working with us very actively. We have met with them even after we came back here, some of their ministers and parliamentarians have also come to meet with us.

Singapore is interested also because as you know, it is a small country that defiled the odds and became very successful, sophisticated country that became great under the very good leadership of the former Prime Minister, Lee Kuan Yu. Nigerians will get there too.

How far has the government gone with the concession loan coming from China?

China has a deliberate policy of partnering with Africa and has identified Nigeria as particularly important base because of our strategic role in Africa. Furthermore, before this government, China had offered to work with us on our key infrastructure projects. China is one country that’s not afraid to spend serious money in another country. That’s the state they’ve got to. They have the money and they want to put it to work and probably recoup over a long period of time. That’s why you’ll hear about China in rail, airport concession, including remodeling, hydropower projects and many more. A lot of our Nigerian businessmen are partnering with the Chinese. Those agreements are now being implemented at government-to-government level.

I think we’ve made a lot of progress. We’ve been to China on a number of times. On the business-to-business level again, it’s working. You know how it is; they’ll start from MOUs, substantive legal agreement, and then follow by investment agreement, shareholders agreements, etc. What we’ve done is that whatever we can do to help the process we’ll do. Under our ministry, we’re working on special economic zones. We as a government have been increasing our budgets, infrastructure and other things needed for the special economic zones, because they’re for industrialisation, and that’s one of our top priorities. The China Exim bank, working with African Exim bank have come to us to say they can invest a billion dollars in those economic zones. We met with them last week again on it. So, there’s a lot action and work going on. You’ll start to see the results as we go on.

Talking about exports what are the bottlenecks and what are you doing about it?

We have said we want to diversify the economy in terms of foreign exchange earnings, and also in terms of revenue generation. What this simply means is non-oil exports. To do it, it means we have to do certain things well. My view is that it goes with creating the enabling environment and ease of doing business. The process of exporting from Nigeria is very tough and not competitive and the Federal Executive Council has actually asked myself and the Minister of Finance, to come and address the council on practical steps to make it easier to export from Nigeria, ensuring that we trade across our borders and we are working on it, as we speak. The bottlenecks in terms of administrative, bureaucracy, red tapes’ and all the approvals you have to get, and all the inspections, and all the waiting at the ports, those need to be addressed. People that are serious about export make that a competitive advantage by doing it.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Investment

Saudi Arabia Aims for $80 Billion Tourism Investment to Fuel Vision 2030 Goals

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tourism

Saudi Arabia is embarking on a bold venture to attract up to $80 billion in private investment into its burgeoning tourism industry, a move pivotal to realizing its ambitious Vision 2030 objectives.

Tourism Minister Ahmed Al Khateeb unveiled the kingdom’s aspiration during an interview in Riyadh, emphasizing the imperative role of the private sector in spearheading investment endeavors.

With plans to disburse approximately $800 billion on tourism over the next decade, Saudi Arabia is steadfast in its pursuit to diversify its economy and reduce dependency on oil revenues.

Vision 2030 outlines a trajectory for the kingdom to metamorphose into one of the world’s premier tourist destinations, targeting 150 million annual visitors by 2030, a significant portion originating from overseas.

While the government and sovereign wealth fund have historically fueled tourism development, securing substantial foreign direct investment, particularly from the private sector, emerges as paramount in expediting Vision 2030 initiatives.

The kingdom’s fiscal projections, forecasting deficits until 2026, underscore the urgency of engaging private investors to actualize the ambitious tourism blueprint.

Saudi Arabia, having welcomed 100 million tourists in 2023, predominantly domestic travelers, eyes international markets such as India, China, the UK, France, and Germany for tourist influx.

A new program launched by the Ministry of Tourism aims to streamline investment processes, potentially unlocking $11 billion in private investment, bolstering Saudi Arabia’s tourism trajectory and reshaping its economic landscape.

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CBN Unveils Plan to Settle N1.64 Trillion Treasury Bills in Q2 2024

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FG Borrows

The Central Bank of Nigeria (CBN) has announced its strategic approach to managing liquidity and meeting financial obligations by unveiling a comprehensive plan to settle Treasury Bills (TBs) worth N1.64 trillion during the second quarter of 2024.

This initiative, part of the CBN’s Nigeria Treasury Bills Issue programme, aims to regulate the money supply within the economy while effectively managing liquidity dynamics.

According to documents obtained by Investors King, the TBs settlement program is slated to commence on March 7th and conclude on May 23rd, 2024.

The CBN will focus on settling TBs with varying tenors, including N414.29 billion on 91 days, N43.74 billion on 182 days, and a substantial N1.18 trillion on 364 days.

The breakdown of the settlement plan reveals monthly settlements to address maturing TBs. In March, the CBN plans to settle N660.62 billion worth of TBs, followed by N292.17 billion in April and N688.3 billion in May.

Market analysts interpret this move as a testament to the CBN’s commitment to managing financial obligations and maintaining economic stability.

It provides investors with opportunities to engage in short-term financial instruments while contributing to overall liquidity dynamics.

The strategic settlement plan reflects the CBN’s proactive stance in navigating economic challenges and ensuring stability within the financial landscape.

As the apex bank implements these measures, stakeholders will closely monitor their impact on market dynamics and economic indicators, anticipating implications for investment decisions and monetary policy outlooks.

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Investment

China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market

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General Images Of Residential Property

China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.

Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.

China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.

Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.

This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.

In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.

However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.

While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.

The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.

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