* Finance minister says Nigeria buoyant despite insurgency
* Okonjo-Iweala, visiting Berlin, expects impact on GDP
* Financial and direct investments holding up, she says
By Stephen Brown
BERLIN, July 1 Boko Haram's insurgency will slow
Nigeria's economy again this year, knocking half a percentage
point off growth like last year, the finance minister said on
Tuesday, adding that her 6.75 percent 2014 growth forecast took
this into account.
Ngozi Okonjo-Iweala told Reuters that while the violence in
the northeast might put off some potential foreign investors,
those who were in Nigeria for the long term seemed to be holding
their nerve, as did portfolio investors in its government debt.
"We are expecting about 6.75 (percent growth in 2014) and we
have accounted for the impact of the insurgency which we will
think will take half a percentage point off GDP growth," she
said in an interview during a visit to Berlin.
Nigeria overtook South Africa as the continent's biggest
economy this year, following a rebasing calculation that almost
doubled its gross domestic product. The economy grew about 6.4
percent last year, the minister said, with the Islamist rebels
having most economic impact on agriculture in the northeast.
The economist and former World Bank vice-president said her
talks with German Finance Minister Wolfgang Schaeuble emphasised
"our strong fundamentals despite the challenges that we face".
She sought his support for the creation of a new Nigerian
development bank to improve financing to small and medium-sized
private enterprises which could become an "engine for growth" as
the country seeks to diversify its economy away from oil.
Rebasing GDP had revealed hidden strength in sectors such as
services and telecoms, which had "gone to 0.7 percent of GDP to
7 percent" and was seeing strong growth, said the minister.
She said the creation of a secondary mortgage market could
help kick off growth in housing, another sector that she hoped
could "help to make up for some of the lost growth".
The minister cited government bonds yields of 4-5 percent as
evidence financial investors were not panicking: "The prices are
quite reasonable which is an objective assessment that investors
may be looking at the long-term underlying fundamentals of the
economy, which are strong."
Some potential foreign direct investment might be affected
negatively by the Islamist insurgency, she said, but existing
investors - especially those from emerging powers such as South
Africa, China and Brazil - were proving resilient.
"Part of our turbulence may also be linked to the upcoming
election (in 2015)," she said. "Whenever we have elections there
is always some increase in violence and disturbance."
Boosting the regional economy is part of President Goodluck
Jonathan's response alongside counter-insurgency efforts and
attempts at dialogue with Boko Haram, which was hampered by the
fact that "they have not articulated any political demands".
She was due to meet former British prime minister Gordon
Brown in London on Wednesday to discuss a "safe schools
initiative" aimed at avoiding a repeat of the still-unresolved
kidnapping of more than 200 Nigerian schoolgirls by Boko Haram
The hope is to raise $100 million for infrastructure such as
solar-powered lighting, sanitary facilities, walls or alarm
systems and to coordinate with local communities to make girl
students especially "feel safer", the minister said.
(Editing by Alison Williams)