Nigeria’s economy is showing signs of recovery, President Umaru Yar’Adua said on Thursday, thanks to a series of reforms that has stabilised the naira currency, lowered inflation and renewed investor confidence.
“As the world begins to recover from the global recession, we are increasingly encouraged by the emerging signs of recovery in our national economy,” Yar’Adua said in a national address marking Nigeria’s 49 years of independence.
He pegged the oil producer’s economic growth at 5 percent this year, echoing similar estimates made by the central bank.
A Reuters poll of 12 analysts in late August forecast Nigeria’s economy to grow 3.6 percent in 2009 and accelerate to 4.8 percent next year. [ID:nLP387068]
Yar’Adua highlighted the drop in inflation to 11 percent in August from 15 percent at the end of last year.
Sub-Saharan Africa’s second-biggest economy, once a darling of frontier market investors, has seen its fortunes decline as the global economic downturn pushed down energy prices and exposed fundamental weaknesses in its banking sector.
REFORM SUPPORT
Yar’Adua offered his full support to central bank Governor Lamido Sanusi’s unprecedented reforms in Nigeria’s financial institutions.
The regulator injected $2.6 billion into five ailing banks in August after an audit of 10 institutions found they were so weakly capitalised that they posed a systemic risk.
The central bank said it would submit audit results of the remaining 14 banks for final review next week and that they appeared to be in better health than those already examined. [ID:nLL734245]
“The goal is to have banks and financial institutions that can be effective partners with government in delivering economic growth,” Yar’Adua said.
“By enforcing full disclosure, entrenching sound corporate governance and risk management principles, Nigeria would be on the way to entrenching a financial system that inspires the confidence of the international community,” he said.
Yar’Adua praised central bank reforms, including the lifting of foreign exchange controls in July, that have helped stabilise the naira.
“In the last quarter of 2008, the naira suffered a very sharp depreciation which continued into the early part of this year,” he said. “Normalcy has now been restored with the convergence in rates in our foreign exchange markets.”
The president renewed his commitment to develop the oil-producing Niger Delta and provide stable electricity to the country’s 140 million residents, both considered major brakes on economic growth.
Yar’Adua expressed hope that all militants in the Niger Delta would surrender their arms in return for clemency.
The federal amnesty programme is set to expire on Sunday, despite requests from key rebel leaders to push back the deadline to allow time for peace talks.
“Some remarkable progress has been made and it is our hope that all militants would avail themselves of this amnesty, which expires on Sunday,” he said.