The Federal Government has embarked on the process of repatriating foreign denominated assets into the formal financial sector as part of its strategy to enhance intermediate and long-term foreign exchange (FX) supply.
Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, revealed this development, stating that the repatriation efforts would commence in the second quarter of 2024. Additionally, Edun emphasized the government’s plan to initiate the local issuance of foreign denominated federal government bonds in early Q2 2024.
According to Edun, a portion of the Nigerian Treasury Bills (NTBs) and Bonds issued in 2024 has been utilized to settle Ways and Means advances from the Central Bank of Nigeria (CBN), totaling N4.83 trillion. This strategic move aims to increase the supply of stable foreign capital to critical sectors of the economy.
Despite the increased costs to the government, Edun highlighted that the surge in the pricing of Federal Government securities is attracting US Dollar inflows into the economy.
Addressing participants at the Lagos Business School breakfast club on the theme ‘Reconstructing the Economy for Growth, Investment, and Climate Resilience Development,’ Edun underscored the issuance of presidential executive orders to enhance US Dollar liquidity in the economy.
Furthermore, Edun outlined the government’s agenda to achieve up to 6GW of generated and delivered electricity in the second half of 2024, as well as scaling up agricultural value chain projects. He cited sector-focused interventions in oil and gas, including tax incentives, exemptions, and remissions, aimed at reducing contracting costs and timelines while ensuring local content compliance.
Edun emphasized the administration’s commitment to implementing key enablers to attract and retain long-term domestic and foreign direct investments. He mentioned ongoing engagements with manufacturers to develop programs and policies to mitigate current challenges and stimulate productive activity across various sectors.
Additionally, Edun highlighted the government’s deployment of fiscal tools to increase the supply of grain and other inputs, create jobs, and boost the export of farm produce, with a focus on addressing food inflation, which currently stands at 31.7 percent as of March 2024.
Experts suggest that stable exchange rates, risk-reflective yields, and targeted policies would enhance the country’s ability to attract both local and foreign capital.
