The Federal Government has initiated the process of repatriating foreign denominated assets into the formal financial sector of the economy to bolster intermediate and long-term FX supply.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, disclosed this, stating that the repatriation would commence in the second quarter of 2024. He reiterated the government’s plan to launch local issuance of foreign denominated Federal Government Bonds in early Q2 2024.
The federal government has utilized a portion of the Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 to settle Ways and Means advances from the Central Bank of Nigeria (CBN) totaling N4.83 trillion, according to Edun.
The move aims to enhance the supply of ‘sticky’ foreign capital to vital sectors of the economy. Despite increased costs to the government, Mr. Edun noted that the surge in the pricing of FG securities is boosting US Dollar inflow into the economy.
Speaking at the Lagos Business School breakfast club on the topic ‘Reconstructing the Economy for Growth, Investment, and Climate Resilience Development’ recently, Mr. Edun stated that the government has issued presidential executive orders to boost US$ liquidity in the economy.
The minister also mentioned the government’s pursuit of up to 6GW of generated and delivered electricity in H2, 2024, as well as the up-scaling and out-scaling of agricultural value chain projects.
As an economic intervention, the government has provided presidential directives in the oil & gas sector, offering tax incentives, exemptions, and remissions to companies in the industry. The government prioritizes reducing petroleum sector contracting costs and timelines while ensuring local content compliance for value.
“Government is implementing a suite of key enablers to successfully attract and retain long-term domestic and foreign direct investments in our economy,” Mr. Edun said at the Lagos event.
He mentioned engaging with manufacturers to develop programs and policies to cushion the impact of current challenges and stimulate mass-scale productive activity across multiple sectors.
Furthermore, Edun stated that the government is deploying fiscal tools to significantly increase the supply of grain and other inputs, creating jobs, and increasing the exports of farm produce, which remains a top priority.
Food inflation, at 31.7 percent as of March 2024, is the primary driver of inflationary pressure on the economy. Experts believe that increasingly stable and predictable exchange rates, risk-reflective yields, and targeted policies would enhance the ability to attract local and foreign capital.
