The Nigeria Economic Summit Group (NESG) has stated that in order to improve Foreign Direct Investment (FDI) inflows, the federal government must demonstrate the commitment to attract and protect investments.
According to a statement signed and made available to THISDAY by the Chairman, Board of Directors, the Nigerian Economic Summit Group, Asue Ighodalo, given the shortage of capital, Nigeria needs to do more to attract real investments into key sectors of the economy.
The statement explained that the low inflow of Foreign Direct Investment (FDI) into strategic sectors in the last three years is instructive -post-recession, FDI remains around US$1 billion per annum, significantly lower than pre-recession levels where, as recently as 2014, it stood at US$2.3 billion.
“To improve FDI inflows, Nigeria must demonstrate the commitment to attract and protect investments. In addition, businesses continue to be concerned about policy inconsistency, insecurity and other business constraints such as inadequate infrastructure,” the statement said.
The statement lauded the federal government for the stability in the exchange rate of the Naira in 2019 and 2020, adding that the country’s external buffers have continued to decline and that the foreign investment inflows are predominantly short-term portfolio investments.
The statement further explained that given the fall in oil prices and expectation that oil prices would continue to ease, the NESG recommends that the Central Bank of Nigeria (CBN) consider managing the Naira by allowing the currency fluctuate within a pre-determined range not exceeding 5 percent, “such fluctuation would serve to reduce the net outflow of reserves by improving confidence in the economy.”
According to the statement: “The outlook for the global economy is beclouded by the Coronavirus outbreak in China. As a threat to public health, the NESG notes that the World Health Organisation (WHO) has listed Nigeria along with 13 other African countries as nations where an outbreak of the Coronavirus is possible. Given increasingly close economic links with China, it is imperative for Nigeria to upgrade national preventative readiness and ensure adequate capacity to isolate any infected entrants into Nigeria. It is also important for public policy to note the adverse effect of the Coronavirus on global economic growth, especially commodity prices, and adjust to ameliorate these adverse effects.
“The NESG is worried about the rising cases of harassment of businesses in the guise of raising revenue. Whilst companies must meet ALL legal demands and obligations, it is important that the processes for demand and collection of dues must not only be transparent but must avoid trampling on the rights of companies to challenge demands which they believe exceed their obligations. As we noted earlier, it is imperative that Nigeria continues to work towards being a preferred destination for international investment.
“The NESG acknowledges continuing progress on Ease of Doing Business and commends the work of the Presidential Enabling Business Environment Council (PEBEC) as Nigeria moves from 146th position in 2018 to 131st position in 2019 in global World Bank Ease of Doing Business rankings. Sustained progress has been made in such areas as: Starting business; Obtaining Construction Permits; and Enforcing Contracts. The next level of reform which will further improve Ease of Doing Business must focus on areas which include: Power Supply; Ports Administration; and Rail Infrastructure Development. The NESG recommends that the Public-Private Partnership (PPP) model provides a model which Nigeria must successfully leverage to tackle the challenge of infrastructure financing. To achieve this, the government needs to strengthen all laws governing PPP agreements and must demonstrate sincere commitment towards upholding agreements and protecting investors.”