FG Urges Private Equity Firms to Boost Investment

Nume Ekeghe

The federal government has called on private equity firms and fund managers to play a stronger role in financing Nigeria’s growth ambitions, while committing to deeper engagement, clearer policy direction and better coordination to address bottlenecks constraining private capital.

The commitment was made at a high-level engagement between government officials and private capital stakeholders in Lagos, yesterday, aimed at strengthening Nigeria’s private capital ecosystem in support of the administration’s target of achieving seven per cent economic growth.

Speaking at the session, Special Adviser to the President of Nigeria on Finance and the Economy, Sanyade Okoli, said growth at the scale envisaged by government would have to be financed largely through investment, particularly domestic capital, given global economic volatility. 

She noted that while the government has taken difficult reform decisions, including foreign exchange unification and fuel subsidy removal, the next phase requires a more coordinated policy framework that supports investment and job creation.

“We cannot achieve seven per cent growth without investment. And in today’s global environment, that investment must increasingly come from domestic private capital,” Okoli said, stressing the need for policies that are aligned with government’s growth objectives.

The engagement, which drew participants from the Private Equity and Venture Capital Association of Nigeria (PEVCA), Nigeria Sovereign Investment Authority (NSIA), Nigerian Economic Summit Group (NESG) and the Nigerian Exchange Group (NGX), also served as a platform for feedback on reforms and regulatory developments affecting private capital.

Participants acknowledged progress on macroeconomic reforms but raised concerns around capital gains tax implementation, foreign exchange losses, and capital requirements set by regulators, particularly the Securities and Exchange Commission (SEC), which were described as too high for risk-based investment vehicles such as private equity.

Okoli said the government recognises the distinct nature of private equity and venture capital, noting that unlike banks, insurance or pension institutions that safeguard deposits, private equity deploys risk capital and should not be regulated in the same manner.

She said, “Engaging with key stakeholders, because that’s the only way you’re going to have policy that works, and a coordinated policy where we’re saying, okay, we as government say this is where we’re trying to go. Make sure that we don’t have policies that are misaligned against where we say we’re trying to go.”

“The second big area is saying that, look, across the world, everybody is retreating. I think it’s opening of de-globalisation and the erosion of multilateralism, and saying that we need to till our land, we need in catalytic areas that will really move the needle.”

Beyond regulation, Okoli said there was growing consensus that the government must play a more active role in sharing risk, particularly by deploying its limited capital in catalytic areas that can crowd in additional private investment.

“Government can’t keep looking to the private sector to be taking all the risk. Government needs to put into place some kind of risk capital that will then help bring in additional capital. It makes it more attractive; it makes the returns make more sense. We then had the discussion on how best we achieve that. The general opinion was whether we need other entities, but the general consensus was how you do it amongst yourselves, just make it happen in a way that makes sense for others and achieves what we say we need.

“The other area is making sure that government provides the incentives and support. We ought to be able to make the business environment easier,” she said.

According to her, feedback from representatives from organisations active in the private capital space would help shape policies capable of unlocking investment, scaling businesses and creating the jobs needed to deliver the government’s growth target.