By Tanko Mohammed
The economic score sheet among other achievements of President Muhammadu Buhari has been released as he marks his fifth anniversary in office on May 29, 2020.
The economic achievements are enumerated according to the sectors, including agriculture, ease of doing business, pension, fiscal policies, trade, budget, immigration and many others.
- The Anchor Borrowers Programme (ABP)of the Central Bank of Nigeria, launched by President Muhammadu Buhari on November 17, 2015, has made available more than 200 billion Naira in funding to more than 1.5 million smallholder farmers of 16 different commodities (Rice, Wheat, Maize, Cotton, Cassava, Poultry, Soy Beans, Groundnut, Fish), cultivating over 1.4 million hectares of farmland.
- The ABP has substantially raised local production of rice, doubling the production of paddy as well as milled rice between 2015 and 2019.
- Between 2016 and 2019, more than 10 new rice mills came on-stream in Nigeria. Many of the existing Mills have expanded their capacity; several new ones are under construction.
- More than a billion dollars of private sector investments in the production of Rice, Wheat, Sugar, Poultry, Animal Feed, Fertilizers, etc, since 2015.
- Federal Executive Council approval (2020) for a National Agriculture Mechanization Programme, “the Green Imperative”, in partnership with the Government of Brazil and multilateral financing institutions.
The Presidential Fertilizer Initiative:
- Launched in January 2017, as a Government-to-Government agreement with the Kingdom of Morocco
- More than a million metric tonnes of fertilizer produced since 2017. This translated to distribution of more than 18 million 50kg bags of NPK fertilizer in the first three years of the PFI)
- 22 blending plants resuscitated (combined installed capacity of more than 2.5m MT)
- Price reduction from 9,000-11,000 per bag, to 5,500
- FX savings of $150m annually through the substitution of imported components with locally manufactured ones
- Subsidy savings of 50 billion Naira annually
MAKING BUSINESS WORK
Support for Micro, Small and Medium Enterprises: The Administration has launched a series of funding and capacity development initiatives designed to support MSMEs:
- The new Development Bank of Nigeria (DBN) has finally taken off, with initial funding of US$1.3 billion (N396.5 billion); to provide medium and long-term loans to MSMEs.
- Since 2017, the DBN has disbursed a total of N100 billion through the bank’s 27 Participating Financial Institutions (PFIs) impacting more than 100,000 MSMEs.
- 52% of loans disbursed in 2019 were to youths and women owned businesses.
- Bank of Industry has disbursed more than N400 billion in loans to large, medium, small and micro enterprises since 2016.
- It has also established a N5 Billion Fund for Artisanal Miners, as part of the Federal Ministry of Mines and Solid Minerals Development’s Programme to boost Mining activities in Nigeria; as well as a $20 million Fund to support young technology entrepreneurs in Nigeria
- The MSME Clinics, which bring relevant Government Agencies together with small businesses operating in various cities across the country, to enable the Agencies provide direct support to these businesses. The interactions allow the Agencies better understand the issues facing small businesses, and provide a platform for speedy resolution.
- The Ease of Doing Business Reform Programme (see below)
- The Government Enterprise and Empowerment component (GEEP) of the Social Intervention Programme (SIP)
Ease of Doing Business Reform Successes:
- The work of the Presidential Enabling Business Environment Council (inaugurated by President Buhari in August 2016) and the Enabling Business Environment Secretariat (EBES) has resulted in Nigeria moving up 39 places on the World Bank’s Ease of Doing Business rankings since 2016. In the last 3 years Nigeria has twice been adjudged one of 10 Most Improved Economies in the Rankings.
- The Nigerian Investment Promotion Council (NIPC) in 2017 completed a long-overdue revision of the list of activities that can benefit from Nigeria’s Pioneer Status Incentive, which grants beneficiary companies a 3 to 5-year tax holiday. The revision, done more than 10 ten years after the last one, has modernized the List, expanding the tax holiday incentives to qualifying companies in E-commerce, Software Development, Animation, Music, Film and TV.
- NIPC published a Compendium of all Investment incentives in Nigeria, making it easier for existing and potential investors to have equal access to the information.
- Some of the specific Ease of Doing Business Reform achievements are as follows:
- Assent by President Buhari to the Finance Bill, 2019. The Finance Act, 2019 is the first time Nigeria is accompanying the passage of a Budget with complementary fiscal and business environment reforms legislation. The 2020 Budget is also the first time in 12 years that a Federal Budget has been restored to the January-December cycle.
- Creation of a National Collateral Registry (NCR). A NCR or Movable Assets Registry was established by the Central Bank of Nigeria, in May 2016. The NCR allows small businesses to get access to loans using movable assets – machinery, livestock, inventory – as collateral. As of the end of June 2018, the NCR online portal had registered 630 financial institutions. Between inception in 2016 and April 2020, these financial institutions had recorded a total of 65,370 moveable assets on the portal, belonging to 165,456 borrowers, and valued at 1.26 Trillion Naira
- Automation of business name reservation, submission of registration documents, payment of registration fees, generation of Tax Identification Numbers (TIN), and filing of federal Taxes.
- Implementation of functioning Visa-on-Arrival system for Business Visitors and AU nationals.
- In January 2019, President Buhari launched Nigeria’s Micro Pension Scheme – which allows self-employed persons and persons working in organisations with less than 3 employees to save for the provision of pension at retirement or incapacitation.
- The Buhari Administration is prioritizing the payment of pension arrears owed staff of current and privatized/defunct Federal agencies:
- N54 billion released to settle outstanding 33% pension arrears (the 33% pension arrears date back to 2010 when the minimum wage was increased to N18,000).
- Delta Steel Company (liquidated in 2005): 3,542 pensioners have now been placed on the payroll, ending a 13-year wait for their entitlements.
- NITEL: 9,216 pensioners payrolled, after more than a decade of neglect
- Retired Biafran Police Officers (dismissed by the Federal Government in 1971, after the Civil War ended, and pardoned by President Obasanjo in 2000): President Buhari approved the payment of the pensions, unpaid since their pardon in 2000. N571.56 million was paid to a total of 174 beneficiaries in October 2017
- Nigeria Airways: President Buhari approved the release of N24 billion in September 2018, for the settlement of 50% of workers disengaged when the airline was liquidated in 2003/4.
- Recoveries: The Pension Transitional Arrangement Directorate (PTAD) has recovered cash and non-cash assets totaling N16 billion previously trapped in various insurance companies and underwriters managing the pension funds of Federal Parastatals and Universities.
MONETARY, FISCAL, TRADE, IMMIGRATION, CONSUMER PROTECTION REFORMS
- Launch of a new Tax Identification Number (TIN) Registration System in 2019. For the first time Nigeria has a consolidated, unified database of all taxpayers (individual and corporate), across all States.
- This new System is the product of increased collaboration between FIRS and States’ Inland Revenue Services (through improved sharing of information, and an integration of databases, among others)
- The new TIN Registration system leverages on existing taxpayer data available from databases of multiple organizations like Corporate Affairs Commission (CAC), Banks through Bank Verification Number (BVN), National Identity Card Management Commission (NIMC) and others.
- The improved collaboration between FIRS and the various SIRS’ has resulted in an increase in Nigeria’s “Tax Net” (number of paying and non-paying individuals and companies in the Tax Database) from 13 million as at December 2015 to 35 million at the end of 2018, and a projected 45 million by the end of 2019.
- Establishment of the Nigerian Office for Trade Negotiations by the Economic Management Team (EMT). The NOTN has produced Nigeria’s first Annual National Trade Report, and is compiling, for the first time in Nigeria’s history, a comprehensive database of Nigerian Trade Deals and Agreements.
- The Renminbi-Naira Swap Agreement between the Peoples Bank of China and the Central Bank of Nigeria: On April 27, 2018, the CBN signed a 3-year bilateral currency swap agreement with the Peoples Bank of China (PBoC), worth Chinese Yuan (CNY) 15 billon – equivalent to N720.00 billon or US$2.5 billion.
- Budget proposal submission, which used to be done manually (submissions in hard copy and flash drives) has moved to an online platform, the Government Integrated Financial Management Information System (GIFMIS), since 2018. The new Budget Submission System significantly improves the transparency and efficiency of the budgeting system.
- Restoration of Federal Budget to January-December cycle, with the 2020 Budget, for the first time in 12 years.
- Installation of the Migration Information and Data Analysis System (MIDAS) – a global travel security standard – in 5 Nigerian International Airports, commencing in late 2019, with the support and collaboration of the International Organization for Migration (IOM).
- MIDAS is linked to Local and International Criminal Dabatases / Watchlists (INTERPOL etc), and achieves real-time synchronization of data between all of Nigeria’s International Airports and the NIS Headquarters in Abuja. It ultimately creates a faster and more efficient airport experience, while also ensuring that persons crossing Nigeria’s borders through the Airports do not pose any threats to national and international security.
- Accompanying the installation of MIDAS, is the launch of a New Visa Policy, 2020 by the Nigeria Immigration Service (NIS), as part of a broader 5-year Border Strategy Reform (2019 – 2023).
The new Visa Policy incorporates the following reforms:
- Expansion of Visa Categories from 6 to 79, to reflect and cater to the full range of realities and scenarios for intending travelers to Nigeria.
- Introduction of eVisas, which carry biometric information of visa holders. The eVisa issuance system is linked to MIDAS.
- Automation of Visa Issuance and Payment to reduce human contact and associated corruption.
- The Visa on Arrival Policy expanded to all holders of African Passports starting January 2020.
President Buhari in 2019 assented to the Federal Competition and Consumer Protection Commission (FCCPC) Bill, the first legislation in Nigeria’s history focused on curbing anti-competition practices; and the establishment of the Federal Competition and Consumer Protection Commission.
Between 2017 and now, Nigeria has issued its first ever:
- Diaspora Bond, in the International Capital Market. The Diaspora Bond was US$300 million with a tenor of 5-years. The proceeds were used to part–finance the 2017 Budget.
- Sukuk Bond (1st Tranche – 100 billion Naira in 2017; 2nd Tranche of 100 billion Naira in 2018 and 3rd Tranche of 150 billion Naira has just gone on sale in May 2020). The Sukuk Bond proceeds are being used to fund major road projects across the six geopolitical zones of Nigeria.
- The Buhari Administration has issued Nigeria’s first ever Sovereign Green Bonds.
Domestic Borrowing Costs:
- Through the CBN’s policies and directives, Treasury Bill rates – which represent domestic borrowing costs for the Government – have fallen from 16-18 percent per annum in 2017 to 2-6 percent per annum in 2019/2020.
FISCAL SUPPORT TO STATES
- The Buhari Administration has extended more than N2 Trillion Naira in bailout packages to State Governments, to enable them meet their salary and pension obligations, especially in the face of dwindling oil revenues in the first 3 years of the Administration. The support has come in the form of the following:
- Budget Support Facility (Total of N614 billion extended to the States.
- Paris Club Refunds ($5.4 billion)
- Infrastructure Loans
- Loan Restructuring for Facilities with Commercial Banks:In 2015, the DMO restructured Commercial Bank loans with a total value of N575.516 billion for 23 States to reduce the debt service burden on the states. In exchange for their loans to State Governments, the banks were issued 20-year FGN Bonds at a yield of 14.83% per annum. The Restructuring Exercise benefited the States through:
- Reduction in the monthly debt service burden of States from between 55% to 97% for various States;
- Interest rate savings for the States ranging from 3% to 9% per annum;
- Longer repayment period for the loans now converted into Bonds; and,
- Freeing up of needed cash to run the machinery of Government.
- The Buhari Administration has, since 2017, issued a number of landmark Executive Orders:
- Executive Order (001) on Improving Efficiency in the Business Environment
- Executive Order (002) on Promoting Local Procurement by Government Agencies
- Executive Order (005) on planning and execution of projects, promotion of Nigerian content in contracts and science, engineering and technology
- Executive Order (008) on the Voluntary Offshore Assets Regularization Scheme (VOARS)
- Executive Order (007) on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme
- Executive Order (010) Implementing Financial Autonomy of State Legislature and State Judiciary