BUHARI ADMINISTRATION FIFTH ANNIVERSARY FACTSHEET ECONOMY
- 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 to provide direct support to these businesses. The interactions allow the Agencies to 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). An 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.Consumer Protection:
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.
o Executive Order (001) on Improving Efficiency in the Business Environment
o Executive Order (002) on Promoting Local Procurement by Government Agencies
o Executive Order (005) on planning and execution of projects, promotion of Nigerian content in contracts and science, engineering and technology
o Executive Order (008) on the Voluntary Offshore Assets Regularization Scheme (VOARS)
o Executive Order (007) on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme
o Executive Order (010) Implementing Financial Autonomy of State Legislature and State Judiciary
Home Grown School Feeding Programme (HGSFP):
- 9.9 million Primary 1 – 3 pupils being in 54,952 public primary schools in 35 States. More than 107,000 cooks are engaged to deliver these meals.
- The NHGSFP reduces hunger and malnutrition, and improves education outcomes (boosts school enrolment); farmers and produce ‘aggregators’ also benefit from improved access to school feeding markets and communities, and by extension improved incomes.
Conditional Cash Transfer (CCT):
The Buhari Administration has, since 2017, issued a number of landmark Executive Orders:
- More than 3 million poor and vulnerable households have been registered on the National Social Register, and more than one million of these families are currently benefiting from the CCT Scheme, which pays N5,000 to each household monthly.