Central Bank of Nigeria, (CBN) Governor,  Mr. Godwin Emefiele, sees Nigeria sliding out of recession by the fourth quarter of this year but says full emergence out of recession can only happen in 2017. His optimism was buoyed by certain actions and monetary policies of the government and what CBN has put in place in terms of strategy and policies.

For instance, he is opmitistic that the decision of the apex bank to establish a bridge fund for the government to stimulate the economy  will help loosen the tight grip of inflation on the domestic economy. He disclosed this to media executives in Lagos at the weekend.

“The worst is over. The Nigerian economy is on the path of recovery and growth. So, please if you are a bystander or sideliner, you are losing; join the train now before it leaves the station.

“We said to the fiscal authority that we can give you a bridge to go ahead and spend, and when you obtain the foreign loan that you are negotiating, or when your revenue improves, you can repay the bridge that we have created for you in order to stimulate spending. That is a practical case of collaboration between the monetary and fiscal authorities.”

Emefiele’s analysis of the situation was in sync with suggestions by various persons and authorities that the only way the nation can come out of recession was to borrow and spend just to reflate and loosen up the economic space. Recently Minister of Finance said the government was on the verge of  releasing N350bn to stimulate the economy.

“I wasn’t optimistic that the FDI would come initially, but with what we have seen in three months, almost $1bn, I feel very confident that there will be more inflow into the system and more and more people will have foreign exchange available for them to do their business.

“That will improve industrial capacity. The rate may be high now, but there’s high possibility that with more availability of foreign exchange, the rate will come down. I am very optimistic that a lot of positive things will happen.

“I have talked about how the fiscal authority is trying to push in liquidity to stimulate consumption, demand consumption expenditure; and of course, when consumer consumption is stimulated, demand for goods will go up and if the demand goes up, the industrial capacity will improve. If we maintain a steady course in the way we are going, and if all those who have foreign exchange repatriate them, more and more people will have foreign exchange to do their business, that will improve industrial capacity,” he said.

Meantime, the National Bureau of Statistics has released the revised second quarter (Q2) report on foreign direct investments/importation.

According to the NBS, “the total value of capital imported into Nigeria in the second quarter of 2016 was estimated to be $1,042.17 million, which represents an increase of 46.58% relative to the first quarter, and a fall of 60.91% relative to the second quarter of 2015. This contrasts with the preliminary estimate for Q2 2016 of ($647.1mn) which was based on the first two months of the quarter, which indicated a quarter on quarter on decrease of 8.98%. However, a sharp increase in June outweighed the low values recorded in April ($305.82mn ) and May ($125.58mn). We had estimated June at $215.7bn. The actual level of capital imported in June ($610.77mn) was  however the highest monthly value in 2016 so far.

The report continued: “Further analysis reveals that the sharp rise in June in particular and Q2 2016 over Q1 2016 in general was due to a 115.12% quarter on quarter and 239.48% year on year rise in loans predominantly to the oil and gas (862.02% quarter on quarter rise and 4,023.25% rise year on year) and telecoms sectors (783.25% quarter on quarter and 14.22% rise year on year).

“The increase in capital importation in the second quarter was despite low levels of capital importation in both April and May, of $305.82 million and $125.58 million respectively. In May the value of capital imported was the lowest since August 2009. However, in June the value rose to $610.77 million, more than the previous three months combined due to a surge in loans as aforementioned.

“ Portfolio and FDI recorded increases of 24.45% and 5.64% respectively. In each case this was as a consequence of large monthly increases in June, following disappointing values in April and May. The composition of total capital importation also changed: the larger quarterly increase in Other investment resulted in this investment type accounting for 49.95% of imported capital, roughly half.

“ FDI remained the smallest component and accounted for 17.68%, and Portfolio accounted for 32.37%. Despite the quarterly increases, FDI and Portfolio investment recorded year on year decreases, of 12.71% and 84.55% respectively”.