19 January 2018

Nigeria: AfDB - Nigeria's Economy Needs Double Digit Growth to Reduce Poverty, Create Mass Employment

The African Development Bank (AfDB) has declared that a double digit growth rate was required for Nigeria to reduce poverty and create mass employment, expressing an unrelenting resolve to support critical areas with a view to boosting growth, diversify the economy and create jobs.

After exiting one of its worst recessions in recent history, which it slipped into in the second quarter of 2016, Nigeria posted the second positive growth rate of 1.4 per cent in the third quarter of 2017.

In an address, which he presented at the inauguration of the bank's state-of-the-art office building in Abuja, thursday, the AfDB President, Dr. Akinwumi Adesina, said Nigeria needed to grow at double digit to cut down the level of poverty in the land, and create mass employment, adding that this was why the bank was supporting the federal government's Economic Recovery and Growth Plan (ERGP).

He said: "This building makes a bold statement: Specifically, that the AfDB is here to stay in Nigeria. It sends a strong message that the AfDB appreciates Nigeria. And it sends a message that Nigeria's place in the integration of Africa, especially in West Africa, cannot be ignored.

"We cannot ignore the fact that Africa's largest economy is now out of recession and projected to grow at 2.3 per cent this year. I highly commend the government for all the hard work and efforts to change the trajectory of the economy for good. Congratulations!

"Yet, more still needs to be done and I know you are up to the task, for Nigeria's economy needs to grow at double digit rates to drive down poverty and create a massive number of jobs. That's why the AfDB strongly supports the Economic Growth and Recovery Plan of Nigeria. We were there in the down time, we will also be there for Nigeria in the up time," Adesina said.

Providing an insight into the building, he said it has a unique importance, being the first time that the AfDB has built an office complex outside of its headquarters in Abidjan, Cote d'Ivoire since its beginning in 1964.

He noted: "It is therefore wonderful that the Bank's first ever purpose-built building would find a home in Nigeria, for we must give honor to whom honor is due. After all, Nigeria is the largest shareholder of the AfDB."

Further attesting to the importance the bank attaches to Nigeria, he stated that The Bank, which currently boasts an investment portfolio of about $6 billion, expects the levels to reach $8 billion by 2019.

The bank, he said, strongly supports Nigeria and always will, adding, "you can tell by our level of investments in Nigeria to the tune of $6 billion.

"From our perspective, our investments can only increase, as we expect levels to reach $8 billion by 2019.

"Permit me Mr. President to suggest that our marriage is stable and dependable. The AfDB was there for Nigeria when the country faced economic downturn from the recession. I said at the time that Nigeria was too big to fail. The AfDB is not a fair-weather partner: we were there when it mattered most.

"For a partner in times of need, is a great partner indeed. The AfDB approved and disbursed budget support of $600 million to Nigeria, as it faced its worst recession in decades. Our support went beyond money: it demonstrated our strong commitment to help stabilise Africa's largest economy," he added.

Adesina promised that the bank would not relent in supporting critical areas to boost growth, diversify the economy and create jobs, adding that this includes support for youth in agriculture, small and medium sized enterprises and the financial sector.

"We will accelerate support for infrastructure and the energy sector. Our investments are structured around our High 5 priorities: Light up and power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life for the people of Africa.

"We've invested $500 million in the Development Bank of Nigeria. We expanded private equity investment in agriculture. We put in $18 million into the Fund for Financing Agriculture in Nigeria (FAFIN).

"This year, we will be investing this year $200 million in the TCN to support the rehabilitation of existing transmission lines in partnership with the World Bank. We've invested $100 million in the Mainstream Power IPP in Jebba and Kanji, to add 700 MW to the national grid.

"Our private sector investment includes $300 million in Dangote Industries to promote refining of petroleum products, and $100 million to support Indorama Eleme fertilizer company as part of a $1.2 billion syndicated financing package that will produce 1.4 million MT of fertilizers, and expect to generate $2.1 billion in export earnings over the project life. We invested over $134 million in OLAM in agriculture," the AfDB President said.

He pointed out that the Bank was also providing $263 million toward the rehabilitation of basic livelihoods in the North-east, with the expectation of providing water, sanitation, hygiene and health services that will impact 14 million people, including 1.9 million Internally Displaced Persons.

"Our support of $85 million to the Lekki Concession Company helped construct the 50km Lekki-Epe expressway. This was the first Public-Private Infrastructure partnership in Nigeria. We look forward to supporting additional infrastructure, he stressed.

Adesina disclosed that the bank's support also extends to the financial sector, adding that several Nigerian banks had benefitted from $1.8 billion in lines of credit, including Access Bank, Fidelity Bank, Stanbic IBTC, First Bank, WEMA bank, Zenith Bank, GTBank and the Bank of Industry and NEXIM.

In his remarks at the event, President Muhammadu Buhari observed that the AfDB building in Abuja, among others, was an important symbol of the special relationship between the bank and Nigeria, a founding member and the largest shareholder from inception to date.

Buhari, who was represented by the Vice President, Prof. Yemi Osinbajo, said since 1971, the Nigeria country office has served as an important convening point between the bank, the federal government, state governments and the private sector.

"Nigeria has been important in the growth of the institution as a major shareholder, a donor and a borrower all at the same time, and we have over the years shared the bank's vision and objectives.

"Since its founding in 1964, the AFDB has evolved into one of the most efficient vehicles for economic development and integration for the African continent.The bank has faithfully played its role as a trusted adviser and an honest broker in our region and has also earned its place as the voice of Africa and development issues."

He added: "As the continent's premier financial institution, it's at the centre of Africa's transformation to bring real and lasting progress to the lives of African people. While Africa has made significant strides in economic growth and in poverty reduction much needs to be done. The goal is clear, to eradicate poverty, to create more inclusive social economic development and to integrate the continent.

"To do so the continent needs to promote growth by creating jobs and providing economic opportunities for all. To contribute to this agenda through the high fives unveiled by Dr. Adesina since he took office in 2015, and in our view right on track especially by investing more in infrastructure, power, water, agriculture, education, health care and increased access, in particular, to affordable energy and water " Buhari said.

The president particularly commended the AfDB for its ongoing efforts to close the gender gap, empower women and youths and to ultimately strengthen and expand social safety nets for the most vulnerable population.

He noted that with its large market of over 185 million people, Nigeria will continue to be an important pillar in the bank's work, advancing efforts to this regional integration within the Economic Community of West African states in particular and Africa as a whole.

Buhari assured that Nigeria will continue to be a strong and committed partner of the AfDB and to lead by example.

He said, "We already clearly demonstrated through the partnership that led to the establishment of the bank's Nigeria trust fund established in 1976. The trust fund of $500 million has helped to transform the economy and improved the living standards of millions of people in other African countries."

Applauding the bank's numerous interventionist roles in diverse areas, Buhari thanked the Adesina and board of AfDB for their support to Nigeria at a very difficult time during the 2015, 2016 economic recession. "When we requested support from the bank, the response was swift. The bank approved a budget support loan of $1 billion in November 2016 . The first $600 has been fully disbursed and utilised, " he said.

Osinbajo disclosed that in his discussions with Adesina, Nigeria will be getting the balance $400 million in form of sector loans.

" So we are looking forward to the remaining $400 million The approval by the AfDB sent a much-needed positive signal to the market at a critical time for Nigeria and for this we will always remain grateful to the AFDB,.

"As we celebrate the commissioning of this world class edifice, I wish to reiterate the commitment of Buhari's administration to the bank's strategy in Nigeria. The strategy is fully alarmed with our own economic recovery and growth 2018 to 2020," he said.

Meanwhile, the Minister of Finance and Governor-Member of the African Development Bank, Mrs. Kemi Adeosun, demanded for the hosting of the West Africa Regional Office of the African Development Bank in the Federal Capital Territory, Abuja.

Adeosun, who made the request in her addresd , stated that the new office complex would strengthen Nigeria's effort and desire for regional integration in the West African Region.

She said: "It is in this regard that I will like to put on record Nigeria's strong desire and demand to host the regional hub of African Development Bank.

"We think being the largest shareholder of the Bank since inception, and the country with one of the largest portfolio of its projects, Abuja - Nigeria is the natural and logical place for the bank's regional hub.

"Through this investment, the AfDB has made Nigeria the first regional member-country to host the Bank-owned office complex." Adeosun said


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