Nigeria's Naira: Moving to a flexible exchange rate

Phyllis Papadavid

Overseas Development Institute

The Nigerian economy is in recession, after having registered two quarters of negative growth in mid-2016. Its foreign exchange reserves have declined from $37.3 billion to $25 billion between June 2014 and September 2016 alone, and its current account is now in deficit, with the IMF expecting it to be 2.8% of GDP in 2016 – its lowest level since 1998. The slump in oil prices has been a key driver as petroleum exports represent 90% of Nigeria’s total export revenue. This economic predicament is exacerbated by policy uncertainty regarding liberalisation of the naira exchange rate.

President Buhari recently stated that he anticipates an economic recovery. Yet the composition of the Nigerian economy has left Nigeria with a growing oil-related external imbalance, suggesting that prospects for growth, and employment, will remain poor. The Central Bank of Nigeria (CBN) would like to foster greater exchange rate flexibility to facilitate a new phase of growth and development. This would enable a diversified growth path away from the oil sector following Nigeria’s slow economic transformation.

Meanwhile, speculative inflows into Nigeria will continue to exert a downward pressure on the currency unless there is a strategy to fully liberalise the naira to improve Nigeria’s external position and to rebuild foreign exchange reserves. Following the flexible naira exchange rate regime announcement, policy-makers should now focus on freely floating. This is essential if the new currency regime is to gain credibility, catalyse confidence and complement any growth transition to the non-oil manufacturing sectors.

Download the briefing paper at the link below:

https://www.odi.org/publications/10559-nigerias-naira-moving-flexible-exchange-rate

SURE-P Completes Benin - Ofosu Road (75.6Km)

President Goodluck Ebele Jonathan on Saturday 27th September 2014 commissioned the Benin - Ofosu Road (a section of the Benin - Ore - Shagamu Expressway), at a colourful ceremony at Oluku junction of the road.

In December 2009, the Federal Ministry of Works had awarded Contract 5900 for the reconstruction & asphalt overlay of the Benin – Ofosu section of the road in Edo State at a sum of N24,266,157,021.00 and a completion period of 24 months.  However, due to paucity of funds, the project was only completed up to 55.61% at the inception of SURE-P in February 2012.

The inclusion of Benin – Ore – Shagamu Expressway (295km) among road projects being funded by SURE-P has ensured the completion of the Benin - Ofosu section. Construction work is on-going on the Ofosu - Ajebandele section, while the final section between Ajebandele - Shagamu was recently awarded by the Federal Executive Council.

To date SURE-P has invested N45.5 Billion in three active contracts on the Benin - Shagamu Expressway.

SURE-P’s budgets are intended to supplement provisions in the federation budget to the Federal Ministry of Works in order to ensure timely completion of projects.

For more information about projects being funded by SURE-P visit www.sure-p.gov.ng

The Africa Prize for Engineering Innovation 2014

The Royal Academy of Engineering has announced the launch of the Africa Prize for Engineering Innovation. The prize aims to stimulate, celebrate and reward innovation and entrepreneurship in sub-Saharan Africa.  

Applications are invited from engineers affiliated with a university or research institution in sub-Saharan Africa who have developed innovations that can provide scalable solutions to local challenges.

Engineers from sub-Saharan Africa and from all engineering disciplines are eligible to enter. Shortlisted applicants will receive a six-month package of tailored support to help them achieve commercial success from their innovation.

The overall winner of the GBP25,000 Prize will be announced at a high-profile event in May 2015. Applications close at midnight on 30 May 2014.  

Find out more at:

www.raeng.org.uk/AfricaPrize or africaprize@raeng.org.uk 

Public Private Partnerships (PPP) for Nigerian State Governments Conference

Venue: Lagos, Nigeria (Location TBC)
Date: Tuesday 3rd July 2012
Joining Fee: TBC

Public Private Partnership (PPP) has evolved as a distinct means of funding major capital investments in public services. Private consortia enter into long-term contracts with the government to finance, build and manage projects.

While there is growing appetite for PPPs in the states, they need to be evaluated carefully on a case-by-case basis. Many state governments however do not have the expertise and experience to carry out proper preparations and to evaluate the factors that make or break such projects.

This conference will focus on capacity building in PPPs at the state level and foster networking opportunities between state and federal government representatives, institutional investors, concessionaires, construction conglomerates, financial, technical and legal advisers.

To request joining information or sponsorship details contact
Email: events@wsladvisory.com | Tel: +234 (0) 1- 739 0445
or visit http://wsladvisory.com
WSL Advisory (fluent in project finance)