The Nigerian economy, hobbled for years by state inefficiency, is beginning to connect with the real sector as the pace of reforms in diverse areas accelerates.

Reforms in agriculture, banking and power and the establishment of a sovereign wealth fund (SWF) are beginning to impact the real economy.

Specifically, the reforms have attracted private sector financing commitments in agriculture to the tune of over $4 billion in executed letters of intent for investments, according to Akinwunmi Adesina, minister of agriculture and rural development.

“Bank lending to the sector [agriculture] has increased by 614 percent from N3.5 billion in 2012 to N25 billion this year, while 9 million metric tonnes of food was added to the nation’s domestic food supply in a boost to farmers and consumers,” Adesina said at the NESG summit held in Abuja two weeks ago.

Nigeria’s Sovereign Wealth Fund, with seed capital of $1 billion, has also begun to impact the real economy with plans to invest in infrastructure. The board of the SWF has decided on the first infrastructure investment, according to Finance Minister Ngozi-Okonjo Iweala.

The Nigeria Sovereign Investment Authority (NSIA) and Africa Finance Corporation (AFC) recently formalised a strategic collaboration to support the financing, development and implementation of infrastructure projects in Nigeria.

Dangote Industry Limited’s (DIL) planned $9 billion refinery and petrochemical complex – resulting from President Goodluck Jonathan’s attempts to reform the oil and gas sector by eliminating fuel subsidies – is another link between reforms and jobs.

Aliko Dangote, chairman of DIL, has hinted that favourable government policies were crucial for the refinery project to proceed. The complex should add 85,000 direct and indirect jobs on completion.

“Should the Dangote refinery address the domestic shortage and even result in moderate refined fuel exports to other African countries, this would clearly be a positive for the Nigerian economy,” Samir Gadio, emerging markets strategist at Standard Bank, London, said in a response to BusinessDay questions.

“A turnaround in private investment in the refining business has so far, however, been constrained by regulated petrol prices and an uncertain regulatory framework over the past decade.”

Reforms in the banking sector have also brought about better capitalised banks, which are now able to finance big ticket transactions.

Sanusi Lamido Sanusi, Central Bank of Nigeria (CBN) governor, said recently that the Dangote refinery deal signed with a consortium of Nigerian banks – Guaranty Trust Bank, Access Bank, Zenith Bank, Ecobank Nigeria Limited, Fidelity Bank, First Bank of Nigeria Limited, UBA, First City Monument Bank and Diamond Bank – showed that the banks are healthier, attributing it to the banking reforms the CBN carried out earlier.

Nigerian banks are also in the forefront of financing power privatisation as the reform of the sector nears conclusion. The reform involves the sale of majority stakes in power plants and letting private investors acquire holdings of as much as 60 percent in six transmission and 11 power-distribution companies spun out of the former state-owned Power Holding Company of Nigeria (PHCN).

AFC recently provided a $170 million debt financing facility, in conjunction with GTB, to the Mainstream Energy Solutions Limited consortium (MESL) for the acquisition of Kainji Power plc.

A successful execution the power reform agenda would eliminate electricity shortages and push growth to double digits, economists say, helping to create jobs and lift millions out of poverty.

In the meantime, just the movement on reforms in the power sector has led to a plethora of jobs in legal, finance, advisory and consulting services as the Discos and Gencos buyers navigate the complex deals and transactions.