Nigeria’s President Bola Tinubu named Wale Edun, who served as his senior adviser on monetary policy, as finance minister.
A former chair of Lagos-based investment bank Chapel Hill Denham Group, Edun has played a key role in the West African nation’s market-pleasing moves away from the unorthodox methods of the central bank under its suspended governor Godwin Emefiele.
Nigeria’s dollar bonds due in 2027 erased earlier losses on the news, gaining 0.4 cents to 84.5 cents on the dollar, according to indicative pricing data collected by Bloomberg.
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Edun will be responsible for boosting government revenues, which are among the lowest in the world as a proportion of the economy. That’s essential to help narrow a budget deficit expected to reach 5% of gross domestic product this year while reducing debt service payments, which in 2022 amounted to a staggering 96% of government revenue.
His track record is promising. Edun served as commissioner of finance in Nigeria’s commercial capital Lagos between 1999 and 2007, when Tinubu was governor, and was credited with more than doubling the state’s revenues on his watch.
Since the president’s inauguration on May 29, Tinubu has taken significant steps to repair the country’s fiscal situation. He scrapped a fuel subsidy that had been a long-standing burden on government finances, costing $10 billion last year, and reformed Nigeria’s widely criticized exchange rate system that also sapped revenues.
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The benefits are already visible. Federal tax collection totaled 1.65 trillion naira ($2.1 billion) in June — a record for a single month — and are projected to reach 7.5 trillion naira in the second half, versus 5.5 trillion naira in the previous six months.
That will take total tax collection this year to 13 trillion naira compared to 10.1 trillion last year, with the Nigerian authorities projecting revenues will surge to 25 trillion naira in 2024, buoyed by the reforms and improved tax collection.
S&P Global Ratings on Aug. 4 raised Nigeria’s credit outlook to stable from negative on the basis of the reforms, which have also been welcomed by investors, leading to a rally in bond yields and sending stocks to a 15-year high.
Still, Africa’s most populous country — where 40% live in extreme poverty — faces significant economic challenges amid slow economic growth and the rate of inflation at an almost 18-year high.
In addition to picking his finance minister, Tinubu selected 45 other ministers, including seven women. Heineken Lokpobiri was named minister of petroleum and Adebayo Adelabu, a former deputy governor at the Central Bank of Nigeria, will be the minister of power.
Anthony Osae-Brown and Ruth Olurounbi, Bloomberg
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