Exit From Recession & Major Nigerian Business Events Of 2017

2017 was an eventful ride for Nigeria’s economy. After being battered by the effect of the slump in oil prices and an economic recession, the economy achieved some level of stability during the year with inflation declining and oil prices improving.

Here are some key events that played out in 2017.

• STRENGTHENING OF OIL MARKET

In the first quarter of 2017 oil prices strengthened and production levels surpassed 2m Barrels Per Day (BPD) after Vice President, Yemi Osinbajo, visited the Niger Delta and held meetings with leaders of the region as part of the Federal Government’s efforts to address grievances that saw attacks on oil facilities spike in previous months.

This stability in oil sector production was instrumental to the CBN’s ability to intervene in the foreign exchange market which helped the naira to gain value against the dollar.

The dollar which was scarce at some point was forced to be in the market ensuring everyone that needed it got it.

• CBN OPENS SPECIAL FX WINDOWS FOR SMEs

In April 2017, the Central Bank of Nigeria introduced an initiative to offer the foreign exchange to Small and Medium businesses in the country.

The aim of the initiative is to ensure easy business transactions for industrialists, and the Apex bank will continue to provide liquidity in the system for the ease of doing business.

Also, businesses can now also make their foreign loan and interest repayments, and other trade-related payment obligations.

Participants now trade with each other, as the CBN reduces its activities in the market. Due to the new-found confidence brought about by this market, MSCI (Morgan Stanley Capital International), decided to leave the country in its frontier index until at least November.

• OSINBAJO SIGNS EXECUTIVE ORDERS ON EASE OF DOING BUSINESS

The Vice President, Yemi Osinbajo, in May signed three executive orders expected to change some of the ways government business and operations are conducted in the country.

The executive orders stipulate sanctions and punitive measures that will be imposed where necessary.

They were also expected to ensure the promotion of transparency and efficiency in the business environment designed to facilitate the ease of doing business in the country.

The orders are also expected to ensure support for local content in public procurement by the federal government.

• SIGNING OF THE 2017 BUDGET

The Vice President, Yemi Osinbajo, who was in an acting capacity as the President in June signed the 2017 Appropriation Bill into law, one month after it was passed by the National Assembly.

The Senate President Bukola Saraki and Speaker of the House of Representatives, Yakubu Dogara, joined the Acting President at the Presidential Villa for the signing of the budget.

The National Assembly passed the budget of N7.44tn on May 11 after increasing it from the N7.29tn proposed by the executive.

Professor Osinbajo described the signing of the budget as “an important milestone” in the economic recovery and growth plan laid in April by President Buhari.

• Nigeria Launches First Diaspora Bond

Nigeria’s Debt Management Office (DMO) on June 13, 2017, commenced a ten-day roadshow in the United States, UK and Switzerland, for the country’s first diaspora bond of 300 million dollars.

The debt office has filed a registration statement for the bonds with the U.S. Securities and Exchange Commission.

The DMO said an application would be made for the bonds to be admitted to the official list of the UK Listing Authority and the London Stock Exchange to ensure that the bonds were admitted to trading on the London Stock Exchange’s regulated market.

• OSINBAJO SIGNS EXECUTIVE ORDER ON TAXES, ASSETS DECLARATION
The Vice President, Professor Yemi Osinbajo, On June 29, 2017, signed an executive order to back the Voluntary Assets Income Declaration Scheme (VAIDS).

The signing of the executive order and launch of the scheme is targeted at increasing tax awareness and compliance.

It also gave taxpayers a time-limited opportunity to regularise their tax status without penalty.

“When people pay taxes they pay more attention to what government is doing. There’s a greater level of political and social consciousness.

“Taxes not only about boosting government revenues. When people pay taxes they hold the government to account more,” Osinbajo said at the time.

While decrying the low number of Nigerians that pay taxes, Professor Osinbajo said, “Tax evasion not limited only to wealthy Nigerians. (It is) Also not limited to individuals. Many companies maintain two to three sets of books.”

 

• ETISALAT Nigeria’s Crisis And Emergence Of 9MOBILE

Telecoms operator, Etisalat Nigeria ran into major trouble in 2017. First, it ran into challenges repaying its N541billion loan to a group of banks, then the banks rejected its loan restructuring plan.

Subsequently, the company’s largest shareholder, Etisalat International terminated its management agreement with the Nigerian subsidiary, pulled out of the country and asked the company to phase out its name.

Consequently, Etisalat Nigeria on July 13, 2017, officially changed the company’s corporate identity to 9mobile.

Etisalat Nigeria had a running battle with a consortium of 13 banks, starting in March after it notified them of its inability to service its $1.2billion debt in February due to the foreign exchange challenges in the country, before the name change.

• NIGERIA EXITS RECESSION

In September 2017, Nigeria came out of recession as data on the country’s Gross Domestic Product released by the National Bureau of Statistics showed that the economy grew at 0.55 percent in the second quarter of 2017.

The statistics office attributed the economic recovery to the performance of four main economic activities comprising oil, agriculture, manufacturing and trade.

Oil GDP recovered significantly from -11.63 percent in Q2 2016 to 1.64 percent in Q2 2017, while Non-oil GDP grew marginally at 0.45 percent.

Agriculture grew 3.01 percent in Q2 2017, from 3.39 percent in Q1 2017.

• Paris Club Refund

2017 has also been the year of the Paris Club Refund. So far the Federal Government has refunded more than N700bn to the states in partial fulfilment of claims by state governments relating to over-deductions from their Federation Account Allocation Committee allocation for external debt service arising between 1995 and 2002.

 

The refunds has led to conflict over how they were utilised by the state governments.

• 2018 BUDGET PRESENTATION

On November 7, 2017, President Muhammadu Buhari presented a proposal for a budget of N8.612 trillion for the year 2018.

At the presentation of the budget before a joint session of the National Assembly, President Buhari addressed the lawmakers on the key achievements and plans of his administration as well as the key assumptions and allocations in the budget.

The President said that the 2018 Budget will consolidate on the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2018 – 2020.