The Nigerian government has granted a 10-year tax incentive to Dangote group for the construction and rehabilitation of roads, Minister of Power, Works and Housing, Babatunde Fashola, has said.
Mr. Fashola made this known while speaking at the Businessday Road Construction Summit, held in Victoria Island, Lagos, on Friday.
Mr. Fashola, who disclosed that construction of the Apapa to Oworonshoki end of the Lagos-Ibadan expressway has been handed over to the company, said the government had approved a review of the five-year limit on tax order enjoyed by the company to 10 years.
"We inherited a tax incentive policy for individuals to benefit from tax remission, to recover investment made in public infrastructure like roads, which other members of the public can utilise," Mr. Fashola said.
He noted that pending applications from Dangote Group were not approved by the previous administration, which the present administration has now approved and work has commenced on the 42.9 km Obajana - Kabba road in Kogi State. The government, according to Mr. Fashola, had reviewed, "the five-year limit on that tax order to a 10-year period to sustain private investment in road infrastructure, because it is a long-term asset."
Similarly, government had reviewed "the order by amending individual investment to include groups of individuals because not all potential investors can individually muster the resources alone but can do so as a group, and recover their pro-rated share."
The minister disclosed further that the government had also signed an agreement with NLNG to construct the Bodo- Bonny Bridge at the cost of N120.6 billion with NLNG and Federal Government sharing the cost 50-50.
"As for the agreement with Dangote, we are now awaiting the design of the 35 km stretch excluding the portion that has been completed, about 7 km, by the previous administration around Mile 2 area.
"From the design, we will determine the cost and the scope of works which we hope can be executed quickly. "As this Government promised, we will solve the Apapa and Port congestion problem. I can only tell you that the solution is now on the way," he said.
Source: Premium Times
It has been three years since the Central Bank of Nigeria introduced the Cashless Nigeria Policy. Its aim was to encourage the use of electronic systems for all monetary transactions.
The policy has yielded benefits: it makes many transactions simpler and safer for more people. But there has been an increase in fraud in the banking and payment systems. These crimes are carried out using the information and communications technology that has flourished in Nigeria since the early 2000s.
A 2013 report by the Nigerian Deposit Insurance Corporation identified 14 types of electronic fraud (e-fraud). Automated teller machine (ATM) fraud was in prime position. It accounted for just under 10% of the total value of funds lost to e-fraud and 46.3% of the reported number of cases. The agency’s 2015 report points to an increase in the incidence of ATM fraud in Nigeria.
Despite the apparent importance of e-fraud, little scholarly attention has been paid to understanding how it affects the functioning of the financial system and its impact on victims. That’s why my colleagues and I carried out a study to examine the experiences of ATM fraud victims in south-west Nigeria. We focused on what made a person more likely to be a victim and on the fraudsters’ tactics.
We found that a number of factors predisposed people to being victims of fraud. These include illiteracy, health problems and issues of vulnerability.
An elderly illiterate man who was interviewed said:
I was given an ATM card and nobody told me how to use it. Outside the bank I gave it to a young man at the ATM to help me withdraw cash. He did it and returned my card to me. After a few days I noticed money had left my account, which I promptly reported to my bank. At the bank I was told that the young man had swapped my card.
Our study also showed that close family members sometimes exploit people’s trust to defraud them. One middle-aged man gave his son his ATM card to draw N5,000 (USD $31.25) ahead of returning to school. He later discovered that his son had instead drawn N10,000 (USD $62.50). “If my son could do that to me while I was trying to help him, who can one trust?” he lamented.
When people are ill, they can be vulnerable to ATM fraud. They depend on others because they can’t get around. A “trusted” person may take advantage.
The story of a young man interviewed during our study helps illustrate this. He was ill and gave his ATM card to a friend to help him buy medication. He was later “shocked” to discover that his friend had drawn an extra N70,000 (USD $237.50) from his account.
The coercion factor
Of course, friends and relatives are not to blame for all ATM frauds. Some occur through coercion, particularly physical attacks and armed robbery at ATMs.
One young woman told us:
I wanted to make a withdrawal on a Sunday evening. The ATM on my street was not working so I had to look for another ATM a few streets away. Unfortunately I was robbed by an armed gang. They made me insert my ATM card to confirm the PIN number and balance. They went away with my ATM card and PIN. I couldn’t do anything until Monday, by which time my account had been drained of N200,000 (USD $1,250). They took my phone so I could not even alert the bank and block withdrawals.
The success of online fraud depends on offenders choosing easy victims.
Stemming the tide
Reducing ATM fraud depends on making people less vulnerable.
For example, anti-fraud education campaigns must use indigenous languages and consider that some bank customers can’t read. Banks must show their customers how their cards work and how to get help when in trouble. Security officers who are not bank staff should not be allowed to deal with customers.
ATM users should be taught to change their passwords sometimes. They must also be cautious about when and where they withdraw money to reduce the risk of attacks.
The government of Nigeria has announced the award of a $5.8 billion contract to build what will be the largest power plant in the country.
The 3,050-megawatt Mambila hydroelectric power project in the state of Taraba will be delivered by a consortium of Chinese state-owned construction firms. The megaproject will feature four dams between 50 and 150 meters tall, and take six years to complete, the Minister of Power, Works and Housing, Babatunde Fashola, told reporters in Abuja.
The Chinese Export-Import Bank will finance 85% of the development, with the Nigerian government contributing 15%. Minister Fashola claimed the project will deliver far-reaching benefits. "(Mambila) will have a transformational effect on all of Nigeria's socio-economic development," he said through a government spokesman, "It will have considerable positive impact on electricity supply nationwide, productivity, employment, tourism, technology transfer, rural development, irrigation, agriculture and food production."
The Mambila hydropower plant has been in development for over 30 years, but previous administrations have made little progress. In 2007, the Nigerian government awarded a $1.4 billion contract to two Chinese construction firms for a 2,600-megawatt plant, but the agreement broke down soon after.
Attempts were made to revive the deal without success. But the deadlock was broken by conversations between the presidents of China and Nigeria in 2016, according to the spokesman of Nigerian President Muhammadu Buhari. "The major breakthrough in the execution of this project was achieved when President Muhammadu Buhari initiated discussions at the level of the President of the Peoples Republic of China in the course of his State Visit (in 2016)," wrote government official Garba Shehu.
The meeting resulted in the creation of a consortium of Chinese companies to deliver the project, according to Shehu, and an agreement that the Chinese government would commit finance to it.
Despite being one of the largest economies in Africa, over 40% of Nigerians live without access to electricity, according to World Bank figures. Hydropower, one of the cleanest and cheapest forms of power, is a key target for development as Nigeria is currently exploiting just a fraction of its potential resources.
The country is also seeking to shift away from oil dependency, after plummeting oil prices triggered a recession. The clear need for the Mambila project could make it more likely to succeed, some analysts believe.
"The prospects of project implementation starting are perhaps stronger than in previous decades," says Elizabeth Donnelly, deputy head of the Africa Programme at UK think tank Chatham House. "Nigeria continues, albeit slowly, with its complex power sector reform and badly needs to generate - and more importantly distribute - more power for its 180 million people." "Hydroelectricity is an important part of this mix, particularly for rural electrification."
The location of the development could lead to complications. "There is strong competition for land in Taraba state, which regularly sees outbreaks of ethno-religious violence," says Donnelly. "Such a project, with its need to resettle people, could considerably worsen the conflict dynamics and humanitarian situation in the state."
Environmental groups have also raised concerns about the potential impact. "If the Mambila dam project does continue, it could mean disastrous environmental and social impacts for those already living in poverty along the banks of the Benue River," warned NGO International Rivers, The Nigerian government says that 100,000 people will be displaced by the development, and has pledged to resettle and compensate them.
Taraba state Governor, Darius Dickson Ishaku, has welcomed the project for its potential to boost tourism and agriculture.
The power plant is one of several major Chinese investments in Nigeria, including multiple railway projects. In January, Chinese Foreign Affairs Minister Wang Yi announced plans to invest a further $40 billion in Nigeria.
"Nigeria is seen as an important power that China wants good relations with," says Yun Sun, a scholar of Chinese foreign policy at US think tank, The Stimson Center. Sun adds that the primary motivation is financial. Investments such as the Mambila power plant make good business sense.
"Nigeria is using Chinese banks to hire Chinese companies for the project, which will create profits and jobs," she says. "China also wants to identify large projects that make it look good and (Mambila) falls into this category." But while China is likely to gain from the deal, Sun sees higher risk on the Nigerian side.
"I am less optimistic about the financial impact on the Nigerian economy as the project is very large and there is a question about how Nigeria will repay the 85% finance from the Export-Import Bank," she says. "There could be implications for the national debt."
Nigeria is finally out of recession as data on the country’s Gross Domestic Product released today shows that the economy grew at 0.55 per cent in the second quarter of 2017.
This is 2.04 per cent higher than the rate recorded in the corresponding quarter of 2016 and higher by 1.46 per cent points from rate recorded in the preceding quarter. The statistics office attributes the economic recovery to the performance of four main economic activities comprising oil, agriculture, manufacturing and trade.
Oil GDP recovered significantly from -11.63 per cent in Q2 2016 to 1.64 per cent in Q2 2017, while Non-oil GDP grew marginally at 0.45 per cent. Agriculture grew 3.01 per cent in Q2 2017, from 3.39 per cent in Q1 2017. Manufacturing retained its positive growth for the second consecutive quarter in Q2 2017, growing at 0.64 percent, while trade which has a dominant share of GDP remained negative at -1.62 per cent.
Electricity and gas and financial institutions sectors also recorded strong growths OF 35.5 per cent. Financial institutions saw an 11.78 per cent jump in Q2 2017, compared to 0.60 per cent in Q1 2017 and -13.24 per cent in Q2 2016. The industry sector grew positively by 1.45 per cent in Q2 2017, after nine consecutive quarters of negative growth since Q4 2014.
Credit: Channels Television
Farming in Nigeria is not for the fainthearted. Intermittent electricity means generators are needed half the time. Chronically potholed roads make transport slow and expensive. Fake fertiliser has previously devastated crops, while toxic feed ruined one dairy farm.
But for a group of 13 hardy farmers from Zimbabwe, the opportunity was too good to pass up.
“When it comes to agriculture, there’s a lot that can be done here,” said Piet du Toit, a weather-beaten 64-year-old farmer from Zimbabwe, as he swung open the gate to his lush garden in Kwara state, western Nigeria. “But it’s got a long way to go and it’s not going to happen overnight.”
Fourteen years ago, after Zimbabwe’s President Robert Mugabe seized white-owned farms in a controversial land reform programme, Du Toit took up an offer from the Kwara state government to take his skills to Nigeria.
He established a 1,000-hectare (nearly 2,500-acre) commercial farm in the virgin bush, two hours by car north of the state capital Ilorin. Since then, the gruelling conditions have slashed the size of the original group from 13 to five.
Du Toit, who grows maize and soy, had to shift his focus to poultry farming this year after the plunging naira currency caused the cost of crop production to skyrocket. Yet for all the challenges, he says business is booming.
“It’s profitable,” said Du Toit, showing off his 21 chicken sheds and beaming with pride. “There’s big investment coming into the country.” But Nigeria is in the grip of its worst recession in 25 years after a plunge in oil prices. Now the West African powerhouse is seeking to slash its dependency on crude revenues and wean itself off costly imports.
President Muhammadu Buhari’s government backs farming as one driver of recovery — but the reality has proved far more complicated, with farmers struggling to access credit. Banks’ lending to the agriculture sector has risen from about one percent of their total credit to just four percent in over three years, said FBN Quest, a Lagos-based investment banking firm.
“This will not bring about the rapid growth in the agro-industry underpinning the federal government’s strategies,” it said in a recent note. Most farming is done by subsistence smallholders which complicates efforts to standardise market prices and product quality, while depriving the government of much needed revenue.
“So much of the agricultural value chain is chaotic,” said Edward George, an analyst at Ecobank. A significant proportion of what Nigeria produces is wasted because it cannot reach the marketplace, he added. And because Nigeria’s food production has not kept up with a booming population, imports have soared, funded by the lucrative oil and gas industry.
“There are Nigerians who will use their cell phones to import pizza from London,” agriculture minister Audu Ogbeh complained recently. Like his fellow countryman Du Toit, Peter Crouch, a former tobacco farmer, has also thrown his lot in with poultry. He opened a hatchery along with his son David in January as part of an egg-to-butcher chicken production operation.
“You have to have the full chain” since Nigeria does not have a developed system, said Crouch, as he took a drag from a Zimbabwean-made Madison cigarette. But it is Nigeria’s epidemic of smuggled chicken that really ruffles Crouch’s feathers.
The issue illustrates one of the biggest problems facing modern Nigeria, where the informal sector represents a significant chunk of the country’s economy. Though chicken imports are illegal, the birds keep coming. Farmers blame Brazil, the world’s number one producer, saying it sells breasts and wings at a premium, then dumps the leftover carcasses at a cut-rate price in Nigeria.
“It’s a sophisticated business. If you were to close importation of illegal chicken, we wouldn’t be able to keep up (with demand),” said Crouch. As the imported Zimbabwean farmers look forward to retirement, the next generation is already eyeing the future. Comfort Babajide, 30, is a supervisor who works at the hatchery with her husband.
“Nigeria is looking more into agriculture, beyond petroleum services,” she said. “Some people still believe in foreign or imported products rather than the local products. “We can show them it can happen right here in Nigeria, we can give them the best.”
Nigeria is regarded as a hot country. Average maximum temperature can reach 38℃ - one of the hottest in sub Saharan Africa. In the last few years extreme heat and intense heatwaves have become a common experience in both rural and urban areas, showing that the country is getting hotter. This year, the Nigerian Meteorological Agency has warned of an “above danger heat stress”.
These experiences are in line with projections that the mean temperature of the planet is increasing, and expected to go on doing so. In Nigeria, the average air temperature is expected to rise by between 0.2 and 2.5℃ over the next five decades, according to the UN’s Intergovernmental Panel on Climate Change.
These increases can’t be overlooked. The effect is already being felt in cities which have developed what is known as “heat islands”. These are urban areas that have higher temperatures than surrounding rural areas due to the fact that natural landscapes have been replaced by paved surfaces and buildings.
Some predict that Nigerian cities may become too hot to live in.
Practical solutions are needed. One approach that’s been shown to work elsewhere is urban greening. This involves introducing trees and plants in places such as parks and gardens, streets, on walls and on top of roofs. By constantly releasing moisture into the atmosphere through their leaves, plants and trees cool themselves and the surrounding environment. This helps to reduce heat. This principle is well known and has been implemented in many European and North American cities.
We studied the temperatures inside and around two typical buildings in Akure, Nigeria. One of the buildings had trees around it while the other had none. The study was carried out for six months and spread across the two seasons (rainy and dry). It showed that tree shading had an impact on thermal conditions in buildings and their surroundings.
This evidence, alongside other research, shows that plants and trees need to be grown in the country’s cities. And everyone must play a part - individuals, households, communities, cities and states.
Reducing temperatures and energy saving
Our study showed that air temperature was higher and stayed that way for longer inside the building without vegetation, with indoor–outdoor temperature reaching a peak of 5.4°C for the unshaded building and 2.4°C for the tree-shaded one. The outdoor area around the tree-shaded building was cooler than around the unshaded one, irrespective of the season.
But the impact of the trees went beyond just the temperature. The cooler temperatures meant that there was less demand for indoor cooling like air-conditioners.
Two separate studies done in Nigeria show that greening buildings can reduce the use of air-conditioning, leading to annual savings of about 34,500 NGN (US$218) in Akure and 17,255 NGN (US$162) in Owerri. These cities are in two different regions of Nigeria yet the results were similar.
Other studies support our research findings. A difference in the average temperature of 7.5°C between spaces with trees and those without was recorded in Enugu, a city in South East Nigeria. In Abuja, researchers found that bare surfaces and built-up areas had higher land surface temperatures while green surfaces maintained lower land surface temperatures.
Vertical greening systems like green walls in Lagos was found to have around 0.5°C reduction in temperature.
What must be done
State and local governments have the main responsibility of introducing policies that would lead to more greening in Nigeria’s cities. In the last ten years some states and the Federal Capital Territory have built urban parks. But much more needs to be done to significantly increase the amount of vegetation and green spaces in the country’s cities. Urban tree planting projects should be promoted on streets and beyond.
There should be programmes to plant trees in neighbourhoods and to create vegetated play parks, community gardens and other forms of green open spaces. Plants should also be planted in road setbacks and spaces within dual carriage ways. Vacant lots and derelict buildings can also be purposefully vegetated.
There should also be a push for gardens to be created – for food as well as aesthetic reasons – inside houses, on the roof or on the walls. Densely packed built environment in cities make space a challenge. But this can be overcome through plant growing techniques that use up little or no space. Good examples of vertical greening systems are available in Mexico City.
These examples provide proof that vegetation at the household and community level can directly influence temperature in the neighbourhood. We believe urban greening is a task that can, and must, be done.
Olumuyiwa Adegun, Lecturer, Department of Architecture, Federal University of Technology, Akure and Tobi Eniolu Morakinyo, Postdoctoral fellow at the Institute of Future Cities, Chinese University of Hong Kong
Earlier this year heavy rains and thunderstorms caused havoc in Lagos, Nigeria’s economic nerve centre and one of Africa’s most populous cities. Residents woke up in many parts of the city to find their streets and homes flooded and their property, including cars and other valuables, submerged.
Pictures and videos later posted online showed dramatic and even bizarre scenes of flooding in the city, including the capture of a crocodile in the floodwater. Another video, which went viral, was one of a man kayaking in floodwater on one of the streets.
Lagos has not been alone. Suleija, a town near the capital city Abuja hundreds of kilometres away, suffered its own flooding challenge in early July. Heavy rains washed houses away and caused others to collapse, trapping occupants. Thirteen people were reported to have died.
Some of the worst flooding in recent memory happened five years ago in March 2012 when 32 of Nigeria’s 36 states were affected, 24 severely. More than 360 people were killed and almost 2 million people were displaced.
The seriousness of the flooding was attributed to a combination of two events: very heavy local rainfall and the release of excess water from the Lagdo Dam in nearby Cameroon, which feeds the Niger River.
Although the degree and seriousness of flooding in Nigeria fluctuates, flooding remains a recurring phenomenon in most parts of the country. The first factor aggravating flooding is climate change, which has been shown to contribute to more extreme storms and rainfall. Another factor contributing to flooding in cities is that Nigeria has experienced rapid urban growth and planning is poor.
The problem of flooding is not peculiar to Nigeria alone. In 2007, floods affected 1.5 million people across several countries in Africa, including Uganda, Sudan, Kenya, Ghana, Ethiopia and Niger. Alluvial flooding is common for major rivers - such as Nile, Niger, Benue, Orange, Zambezi - in Africa. Major cities in Africa are also susceptible to fluvial flooding which occurs when excessive rainfall, over an extended period of time, causes rivers to overflow.
Why Nigeria suffers
Rainfall patterns in Nigeria (1978 to 2007) suggests that rainstorms are getting more intense. The data show that there are fewer rainy days, yet the total yearly amounts of rainfall have not changed much from previous decades. This means that more rain is falling on the days that there is rain, which in turn means that rain storms in the city are getting more intense, increasing the threat of flooding.
In addition to more intense rain storms, the other possible cause of flooding in coastal regions is rising sea levels. Although up-to-date data on the rising sea levels in Nigeria are scarce, it’s believed that if nothing is done, this is likely to aggravate flooding in the future, particularly in coastal cities.
Areas at risk include Lagos, which is on the coast, as well as the Niger Delta region which has many low-lying towns and villages. Being on the coast also makes these places more susceptible to storm surges. While these areas are no stranger to floods, evidence suggests that floods have become increasingly common and intense in recent times.
In the northern parts of the country, heavy rains are likely to cause rivers to overflow their banks and cause flooding in the adjoining states. The changes in rainfall patterns, particularly in frequency and intensity, have meant that these events have begun to happen more frequently.
In Nigeria’s cities, the most common cause of flooding after excessive rains is poor drainage systems that can’t cope. This is called pluvial flooding. Lagos provides a good case study.
Lagos as a case study
Lagos has been urbanising rapidly. By some estimates there will be 19 million in the city by 2050, making it the 11th most populous city in the world. It is also home to most of the country’s industrial, commercial and non-oil operations.
Urbanisation and industrialisation increase the number of roads and buildings. This in turn increases the proportion of surface area where water cannot be absorbed into the ground, leading to rapid runoff which then causes flooding during storms. And in cities that manage their infrastructure well, storm water drainage systems are built so that water can be directed to rivers efficiently and quickly.
Lagos has not kept up with its infrastructure needs. The growth and expansion of the city has been largely unregulated. The has resulted in inadequate and poor housing, the development of slum areas and inadequate water supply and waste disposal, among other problems.
What’s complicated the situation for Lagos is that many parts of the city were originally low-lying mangrove swamps and wetlands, which have been reclaimed and settled, mostly by poorer communities and more recently through concerted efforts by the government.
These low-lying areas are particularly at risk of flooding, and the situation is complicated by buildings being constructed on water ways, and bad waste dumping habits which block the drains.
70% of the population of Lagos live in slums, with the density of people being as much as 120,000 people per square kilometre. (The average population density of New York City is 10,384 people per square kilometre.)
What must be done
It’s clear Nigeria needs to take measures to cope with flooding. This will require both local and international interventions, and could include early warning and rapid response systems, flood data gathering and modelling, proper urban and spatial planning, flood emergency preparedness and political will.
The country can learn from others. For example, in Mumbai, India various measures have been implemented to reduce the impact of flooding. These have included an emergency control centre, automated weather stations, removal of solid waste from stormwater drains and the development of emergency response mechanisms. Nigeria must invest in these measures, and sustain them.
The Nigerian National Petroleum Corporation said the West African Gas Pipeline (WAGP) will be extended from Ghana to Cote d' Ivoire.
It said this is part of the Federal Government West African energy integration policy. Group Managing Director of the NNPC, Dr Maikanti Baru, made this disclosure yesterday while receiving a delegation from Cote d'Ivoire at the NNPC Towers in Abuja.
Represented by the Chief Operating Officer, Gas and Power, Saidu Mohammed, the GMD stated that the extension of WAGP to Cote d'Ivoire would facilitate easy transmission of gas within the West African sub-region.
Baru expressed readiness of the NNPC to develop capacity of the delegation, adding that the NNPC was aware of the long history of refining in Cote d' Ivoire. Deputy Director, Production, of Ministry of Petroleum, Cote d' Ivoire, Mr Patrick Marshal, said the visit was to learn from Nigeria some of its best practices in personnel management, exploration and production in the oil and gas industry.
Highpoint of the visit was a technical session on the mode of operations of the NNPC in the petroleum sector.
Credit: Daily Trust
Nigeria could earn billions in foreign currency from its 47 million tonnes of cassava tubers produced annually, a university don, Prof. Aloy Ezirim has said.
Ezirim, a lecturer in the Faculty of Management Sciences, University of Port Harcourt (UNIPORT), made this known to the News Agency of Nigeria (NAN) in Port Harcourt on Friday. Ezirim said that Nigeria rather than producing cassava for food consumption alone should produce it for both industrial purpose and for consumption.
"Diversification of the nation's economy can take the country to the Promised Land, and this can be achieved by producing cassava for industrialised purposes, which is presently in global demand.
"Nigeria is the largest producer of cassava tubers in the world but cassava produced in the country is processed and consumed locally in various forms with little set aside for export. "Today, cassava has over 2,000 uses in the world that can easily replace or support crude oil as a foreign exchange earner and provide employment for many, if well harnessed.
"Government cannot leave cassava production in the hands of individuals, rather it should intervene by considering cassava as a national crop and accord it priority attention given to crude oil," he said.
Ezirim said that cassava could be used as biofuel as well as used to produce livestock feeds; ethno-medicine; cassava flour; cassava starch and cassava wine and oil, among others. According to him, the crop can also be used to produce alcohol and syrup, which is in high demand by food, beverage and pharmaceutical industries. The don urged farmers to equip themselves with modern researches and development techniques that would enable them expand production and export harvest.
NAN reports that Nigeria is one of the largest producer of cassava in the world followed by Thailand, Indonesia and Brazil, Angola, Ghana and Democratic Republic of Congo.
Nigeria produces almost a third more than the volume of cassava produced in other African countries, including Malawi, Cameroon, Mozambique, Benin, Sierra Leone, Madagascar, Uganda and Rwanda.
Nigeria and the International Monetary Fund disagree over how much the economy will grow this year, with the government saying 2.2 percent and the Fund opting for just 0.8 percent.
Either would be an improvement on last year, when Nigeria suffered its first recession in more than two decades as low crude prices and oil production slashed government revenues and caused chronic dollar shortages.
The government's forecasts, seen by Reuters on Thursday, are contained in a document titled: 2018-2020 Medium Term Fiscal Framework and Strategy Paper, which forms the basis for its 2018 budget, dated July 27. It projects a big bounce back, to 2.2 percent this year, 4.8 percent in 2018 and 4.5 percent in 2019, before reaching 7 percent in 2020.
The IMF, however, is not as bullish, saying on Wednesday it expects Nigeria's economy to grow by 0.8 percent this year, with threats to growth remaining elevated.
"I think that risks are to the downside rather than the upside, but 2.2 percent isn't outside the range of the possible now that oil prices and oil output are recovering," said John Ashbourne, Africa economist at Capital Economics.
The OPEC member expects oil production to hit 2.3 million barrels per day and a price of $45 per barrel. It said oil production reached 1.9 million barrels between January and June 2017, including condensates. Nigeria has promised OPEC to cap its crude oil output at 1.8 million bpd, although it does not include condensates in this total.
The country's economy contracted 0.5 percent in the first quarter, its smallest fall in five quarters of decline.
The government projects the naira's exchange rate to the dollar, which has traded at around 305 on the official market since 2016, to remain stable while inflation will decline but remain in double-digits at 12.42 percent next year. Nigeria has at least six exchange rates which it has used to mask pressure on the naira after a drop in oil price caused foreign investors to flee, triggering a currency crisis.
The central bank has been working to converge the rates through dollar interventions but that is burning out reserves.
"Should there be any harmonisation in FX rates – as encouraged by the multilateral agencies – then an FX assumption of 305 is likely to prove unrealistic," said Razia Khan, chief economist Africa at Standard Chartered Bank. Nigeria suffered significant revenue shortfalls in the first half of 2017, with interest payments remaining as high as 40 percent at end of June.
The country estimates record spending of 7.94 trillion naira ($21.75 bln) next year, up 6.7 percent from the sum budgeted for 2017 with deficit rising to 2.45 percent as a percentage of GDP. "In order to sustain spending of anything close to 7.94 trillion naira, Nigeria will need to do a great deal more to boost non-oil revenue mobilisation," said Khan.