Vice President Yemi Osinbajo says foreign portfolio investment (FPI) coming into the Nigerian economy via the capital market has declined by 85.5 percent since the first quarter of 2015.
Osinbajo, who spoke at the presidential policy dialogue organised by the Lagos Chambers of Commerce and Industry (LCCI), said foreign direct investment also took a plunge of 56 percent of from $395 million in Q1 2015 to $175million by Q1 of 2016.
He said FPI, which averaged $621 million in Q1 of 2015, had declined to $90.3 million by Q1 2016.
“Inflation is at 16.5%. Depreciation of the naira, increase in importation costs due to scarcity of FX. GDP declined from 6.3% in 2014 to 2.15% in 2015 and -0.36% in Q1 2016,” he said.
“Earnings from oil declined in the past eight months due to vandalization of pipelines and export assets in the Niger Delta. Power output fell from 5kMW in February to about 2.5k recently on account of over 60% loss in gas production due to pipeline vandalization.”
After stating the problems with the economy, Osinbajo highlighted steps the government is taking to revive it.
“In order to tackle these problems, permit me to elaborate on some of the steps taken in this regard,” Osinbajo said.
“Priority attention was given to assist the states and local governments pay the salaries of workers, which were several months in arrears. We have had three such interventions, including the latest loan of N90bn as part of a fiscal responsibility plan for states.
“These interventions have helped to boost household spending, which were key steps to prevent the economy from falling into deep recession. We have pledged to keep capital spending in the budget at a minimum of 30%.
“Accordingly, we have already made capital releases of N332billion, with another N100 billion set to be released in the next few days. Other policy instruments used in this regard include the TSA, which has brought transparency into inflows & outflows of government monies.
“A great effort has been made to improve non-oil revenues. This includes bringing an additional 700,000 companies into the tax net as compared to the targeted 500,000 set at the beginning of the year.
“FIRS has achieved 73.17% of its target for the first half of the year. Similarly, milled rice capacity is being increased from 3 million tons annually to 10 million tons of paddy annually.
“The present administration is a strong believer in public-private dialogue. Our immediate tasks to achieve our economic objectives are: Reduce fiscal and forex imbalances; Boost dollar liquidity; Curb inflation; Lower interest rate and ensure lending to the real sector; Increase FDIs and FPI by sustaining enabling policies.”