President Bola Tinubu’s administration signed some positive economic deals and investments in 2023 despite its grappling with economic challenges and a record-high inflation rate.
Earlier this month, the Minister of Information, Mohammed Idris, revealed that the federal government has had about $15 billion in pledges from foreign direct investors.
These deals signal possible foreign investment inflow into the country in the coming months.
As the year draws to a close, Nairametrics examines some of the major economic deals the Tinubu administration signed in 2023 with both international and domestic investors and their possible impacts on the 2024 economic outlook.
Below are five major deals signed by the federal government with investors in 2023.
5. Saudi FX and refinery rehabilitation pledges
President Bola Tinubu’s investment trips in 2023 hit the bull’s eye in Saudi Arabia when the government of the Gulf State pledged to assist Nigeria with its FX obligations as well as invest in the country’s refinery rehabilitation process.
It Is noteworthy that Nigeria is attempting to reactivate its refineries in 2024, with Port Harcourt refinery set to take off by the second quarter of next year and the reconstruction of Kaduna refinery said to be underway.
In addition, the most populous African nation is currently battling FX backlog obligations the CBN is yet to clear completely.
With an investment inflow from Saudi, Nigeria might witness a boost in FX liquidity as well as infrastructural development in 2024.
- “To support the central bank’s ongoing reforms of Nigeria’s foreign-exchange regime, the Saudi government will make available a substantial deposit of foreign exchange to boost Nigeria’s forex liquidity,” Information Minister Mohammed Idris said in a statement in November.
However, further details on the funding are yet to be provided.
4. TotalEnergies deal with NNPCL
One of the main deals in 2023 is the French Energy company, TotalEnergies, with NNPCL to carry out methane detection and measurement campaigns using its advanced drone-based AUSEA technology on oil and gas facilities in Nigeria.
The Energy company also pledged to “invest $6 billion in the coming years,” with a focus on offshore oil projects and gas production across all terrain.
No doubt, this deal will revolutionize the Nigerian oil and gas sector, providing much-needed liquidity in the sector as well as creating employment opportunities in the foreseeable future.
3. I-Dice deal with France
The digital economy was not left behind in 2023. By signing the I-Dice deal with the French government, the federal government says it secured $116 million to boost the digital and entrepreneurship sector in the country.
With a bulging youth population estimated to represent about 60% of the population, the tech and digital industry provides a massive platform for investment opportunities for the federal government to harness talents, create jobs and expand the tax net bracket for the creative industry.
Speaking on the development earlier in November, Bosun Tijani, minister of communications, innovation, and digital economy, noted that the investment is meant to create job opportunities in the digital and creative industry in 2024.
- “The I-DICE programme, led by the office of the vice president, will support young Nigerians as they create job opportunities in the digital and creative economy,” Tijani shared on his official X handle.
2. Siemens Energy deal to increase grid capacity to 12,000 mega watts
During the COP28 Summit in Dubai, the federal government announced that it signed the Presidential Power Initiative agreement with the German company, Siemens Energy, designed to ultimately inject 12,000 Megawatts of electricity into the national grid.
The minister of Power, Adebayo Adelabu, said the project will be financed under the government export credit facility being provided by a couple of German banks to Nigeria.
The Siemens deal is a consolidation of the Buhari’s administration initiative known as PPI.
With this new signing, the federal government aimed to attract more foreign direct investment particularly in the energy sector to the country in 2024.
FDI hit a record low in the country in 2023. However, according to the minister of power, the deal with Siemens includes infrastructural projects that are up to $60 million in funding.
1. Germany’s $500 million renewable energy deal with Nigeria
The biggest investment deal signed by President Bola Tinubu in 2023 is the $500 million renewable energy deal with Germany.
Union Bank of Nigeria and Germany’s DWS Group signed a memorandum of understanding (MoU) on renewable energy. The agreement seeks to harness $500 million in investment in renewable energy projects across Nigeria, mostly in rural communities, spokesperson Ajuri Ngelale said in a statement.
A second MoU on gas export partnership was agreed between Riverside LNG of Nigeria and Germany’s Johannes Schuetze Energy Import AG. Under the accord, Nigeria will supply 850,000 tons of natural gas to Germany annually which is expected to rise to 1.2 million. The first deliveries will be in 2026, Ngelale added.
The deal will help process about 50 million cubic feet per day of natural gas that otherwise would have flared.
