Olawale Edun, Minister of Finance and coordinating minister of the economy, has been around long enough to have since exceeded his fifteen minutes of fame.
For sure, the minister is not searching for moments of applause any more. In any case, Edun does not appear like someone who covets applause. His bearing is that of a man who does not really care for all that. He goes about his business with equanimity, often appearing of staid detachment from many activities around his world, including the giddy politics of the time.
Recently, however, the self-effacing investment banker, who is now minister, was remarkably upbeat and could not hide it. You cannot begrudge him the relief, considering that the Nigerian economy has seemed, more or less, like the British weather, since the advent of the present administration. Sunshine has been rather too infrequent. Hope of bright days are far too stretched too. And rains tend to fall too often.
Such unfortunate, exploitative game of sleight of hands by managers of the oil sector, must also make coordinating the economy under the present dispensation, arduous.
For the coordinating minister of the economy, the appearance of the sun in the horizon, in the form of an outstanding success of the first domestic dollar bond, was uplifting. That shift in the barometer of the Nigerian economy, negligible as it may seem to some, had profound meaning for the minister and his team of managers of the national economy. Any sign of the economy turning a positive bend is significant and deserves to be marked.
The issuance of the first Domestic Dollar Bond in Nigeria, under the auspices of the African Finance Corporation (AFC), provided,a needed critical vote of confidence by investors, local and international, on the Nigerian economy.
For an economy that has been passing through the rains, the expression of such confidence on it, serves various salutary purposes. First, it is a reaffirmation, that when all is said and done, the Nigeran economy still has a lot to offer investors. Also importantly, it is a statement that there are many investors who retain confidence in the prospects of the Nigerian economy, all things being equal. That, of course, is a phrase, commonly used by economists, to indicate that other variables are at play. The expression of confidence in the economy by investors must, particularly be a boost to the government, against the backdrop of recent serial exit of many multinational conglomerates from Nigeria.
Issuing a domestic dollar bond in Nigeria at this juncture, is,at once, a risk and a mark of courage by the economic management team of the government, which Edun leads. This is hardly the best time to wager a bet on Nigeria. It must be gratifyingly to the team therefore, that the decision paid off. Under the auspices of the Africa Finance Corporation (AFC), the bond issuance, turned out an unqualified success, raising $900 million. Indeed, the bond was over-subscribed by 180 percent.
By embracing the bond and indeed, over-subscribing to it, the primary constituent investor-community, mainly investors in Nigeria, Nigerians in the Diaspora and institutional investors, expressed confidence in the Nigerian economy. Interpretation of the bond sales as a measure of what Nigerians think of the economy, cannot be faulted. What is also true, is that such affirmation can be tenuous, if not boosted by clear policy initiatives that support a sustainable environment for investments.
AFC was reportedly excited at how the domestic dollar bond issuance turned out. The agency has every reason to be proud of its role, which in the first place, represents its own confidence in the capacity and resilience of the Nigerian economy. Proceeds from the bond are to be dedicated to further enhance Nigeria’s infrastructural needs. It is up to the Bola Tinubu government to properly deploy this boon. Roads across the country are in terrible shape. Now, flood has wreaked havoc in several parts, further stretching the economy.
The success of the issuance of the first domestic dollar bond, counting alongside the trade surplus of N6.9 trillion which Nigeria posted in the second quarter (Q2) of 2024, should give Minister Olawale Edun and the government, something to be cheerful about. The Q2 trade surplus figure assumes more significance, when it is noted that it marks a growth from the previous quarter, Q1 2024, which posted N6.52 trillion surplus. Devaluation of the Naira has a role here, but no matter.
Now, beyond technical jargons in the issuance of bonds, whether in dollar or naira, subscription level of the bond and what the exercise yielded etc, the concern of the ordinary citizen is; how does all this affect the price of beans and garri in the market? This, in the final analysis, is the real life?
The success of the first issuance of domestic dollar bond in Nigeria, had an instant positive impact on the value of the naira. The currency promptly recorded a 4.8% upward move the days after, a development the government celebrated. Fair enough.
How wonderful it will be for all, if the impact of any such economic policy or action, heralds desired cushioning effect, say, on the price of commodities and general cost of living. This is the type of impact that ordinary citizens and indeed, the economy as a whole are waiting for, to signal that the government is, after all, taking them to a future that offers hope, better life and worthwhile prospects.
As coordinating minister of the economy, Edun’s reported satisfaction and high spirit, at the successful outcome of the domestic dollar bond, is understandable. He presided over an economic decision that yielded positive result. He is in a position to understand how important it is to build on such investor confidence to achieve bigger and more sustainable result for the economy. Until that sustainable impact is achieved in the economy, the promised transformation of the economy remains, a promise.
The task now is to translate the good feeling and the positive omen of the success of issuing the first domestic dollar bond,into the desired turning of the bend, by the Nigerian economy.
There is need to build on this moment of positivity, such that the Naira will look up again, and keep a respectable pace beside other currencies, while the economy maintains, even if, incrementally, a walk towards recovery, the type that consumers will feel its impact. Nigerians can do with such positive economic news.
EZEANI, a former Editor of Sunday Champion and Spokesman for the INEC Chairman, first published this piece in Daily Sun, and writes from Abuja, the FCT.
