Oct 17, 2017 - include its work on the FGN's privatization and commercialization policies, banking and pension reforms,
OALP
NEWSLETTER 17th October 2017
NIGERIAN ECONOMIC SUMMIT 2017: KEY TAKEAWAYS Introduction As Nigeria seeks to sustain its recovery from its first economic recession in over two decades, the nation’s economic policy and business environment are again at the forefront of national discourse. Of the various fora for discussions of the topical economic issues, there are few as consequential as the annual Nigerian Economic Summit (the Summit), organised by the Nigerian Economic Summit Group (NESG). Over the years, the NESG has significantly influenced economic policy in Nigeria by facilitating robust stakeholder engagement at all levels and supporting the Federal Government (FGN) with critical research and public policy implementation. Examples
include its work on the FGN’s privatization and commercialization policies, banking and pension reforms, as well as the overhaul of the telecommunications industry in Nigeria. The Summit, in its 23rd edition this year, brings together government representatives, private sector stakeholders, the inter national investment community and civil society to discuss the critical development issues in Nigeria – as well as the economic policies required to address them. This year’s event was held between 10 and 12 October 2017, at the Transcorp Hilton, Abuja and welcomed key players across various sectors of the Nigerian economy.
Discussions at the Summit T h i s y e a r ’s S u m m i t w a s t h e m e d “Opportunities, Productivity & Employment: Actualising the Economic Recovery and Growth Plan”. There were discussions surrounding economic inclusion, access to capital, legislation, skills, competencies and capacity and focus on engaging in stimulating conversations around a better Nigeria. Below are some key highlights of discussions at the Summit: • A key area of discussion was the Nigerian Economic Recovery and Growth Plan (2017-2020) (EGRP) and the need to implement same. The Minister of Budget and National Planning expressed the commitment of the FGN to the implementation of the EGRP. The EGRP, which serves as a key planning and fiscal
tool for the FGN and its agencies, is focused on: (i) providing economic stimuli to restore growth and stability; (ii) investing in the people of Nigeria through social inclusion programs and job creation; and (iii) building a globally competitive economy through diversification and investment in infrastructure and technology. • In order to sustain the FGN’s momentum, the FGN plans to run sector-focused labs that will bring all relevant stakeholders together in working sessions to brainstorm on the practical steps to overcoming identified challenges in the selected area – with the core objective of mobilizing private capital to finance projects across the country.
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• On infrastructure, experts and sector participants proffered some ideas to effectively unlock the opportunities to solve the country’s infrastructure and urban development challenges, through the acceleration of public private partnerships in the country. The National Council of Privatization and the Bureau of Public Enterprises, currently driving key concession and privatisation projects across the country, is expected to spearhead this e ff o r t , a c t i n g i n c o n c e r t w i t h t h e Infrastructure Concession Regulatory Commission. • Critical suggestions were made with respect to port infrastructure – particularly to institute an inter-modal system which would ease cargo inflow and outflow from the Nigerian ports in the short term. To achieve this, participants proposed a positively disruptive declaration of a “state of emergency” for inter-modal transportation to the port locations, with priority granted to approvals necessary from ministries and MDAs. A longer term approach was to
redirect focus to rail and inland waterways – that are significantly lacking in the country. • In order to resolve the critical mass of under housing in the country a 1-3-1 formula was advocated by the President of the National Association of Microfinance Banks i.e. the cost of registration of title not being more than one (1) percent, the period for the grant of approvals not being more than three (3) days, and all at a one (1) stop shop. It is believed that this will increase the attractiveness of housing, and thus proliferation of housing developments. • Another critical area was with respect to access to capital for medium and small medium enterprises (SMEs) in the country. The stakeholders expressed the need to deepen the capital markets in order to ease access to long term funding. Other recommendations put forward include providing a framework for SMEs to collaborate when applying for credit in order to strengthen their ability to secure capital from financial institutions.
Key Takeaways The key issues deliberated upon at the Nigerian Economic Summit have historically served as a wind vane of sorts for the Nigerian economy and this is expected to be no different. Indeed, critical steps are already being taken towards greater investment in infrastructure, technology and agriculture which are seen as key to the FGN’s diversification efforts – with significant moves being made on crucial projects like the Second Niger Bridge and the concession of major railway lines, some of which we have been involved in. Microfinance is also beginning to witness significant growth, especially with recent advancements in the use of movable property as collateral in Nigeria in the establishment of
the Collateral Registry and its widespread embrace by financial institutions. As at late September, about 16, 326 financing transactions involving 20,684 assets valued at N392 billion had been registered at the Collateral Registry. It is also expected that other key growth sectors, such as the power industry, will continue to be avenues for huge capital investment, as long as the FGN creates the enabling environment through policies designed to ensure that investors get adequate returns on investment, and provides the necessary support for efficient risk allocation in the various IPP development projects in the pipeline.
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Private investors and development agencies, in stepping in to support the exploration of these opportunities, will also need to invest time and capital in understanding the market, the legal and regulatory landscape and the sociopolitical issues. Similarly, it will be necessary to engage advisers and partners who understand the issues and can provide skilled steerage to investors n a v i g a t i n g N i g e r i a ’s re b o u n d i n g economy.
For further information, please contact: Wolemi Esan Partner +234-1-2702551 Ext: 2701
[email protected] Joba Akinola Associate +234-1-2702551 Ext: 2710
[email protected] Georgette Monnou Associate +234-1-2702551 Ext: 2732
[email protected] Mitchell Aghatise Associate +2341 2702551 Ext: 2732
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Olaniwun Ajayi LP
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With nearly 60 years' experience in helping organizations and individuals achieve their goals, Olaniwun Ajayi LP has a track record of involvement in some of the largest and most complex transactions in dynamic sectors of the Nigerian economy.
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