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Experts Recommend How Nigeria Can Attract $80bn G-7 Investment Funds

Experts Recommend How Nigeria Can Attract $80bn G-7 Investment Funds

• Teriba urges FG to approach global equity markets

•Yusuf, Oyedele canvass extensive policy reforms

Gboyega Akinsanmi

Experts have emphasised the need to improve Nigeria’s regulatory environment and end security challenges as strategies to attract part of $80 billion investment funds proposed by the G-7 governments and partners to boost economic growth in Africa in the next five years.

While the Chief Executive Officer, Economic Associates (EA), Dr. Ayo Teriba said Nigeria should not queue for $80 billion G-7 funds; the Director-General, Lagos Chambers of Commerce & Industry (LCCI), Dr. Muda Yusuf and Fiscal Policy Partner, PwC Nigeria, Mr. Taiwo Oyedele emphasized the quality of the investment climate.

The experts made divergent recommendations during separate interviews with THISDAY at the weekend, expressing grave concern about the country’s worsening security conditions.
G-7 countries, along with multilateral partners, had announced an $80 billion commitment to invest in the private sector across Africa.

The group had claimed that the investments would support the long-term development objectives of African economies, including those, which had been negatively hit by the COVID-19 pandemic.
According to the G-7, this investment, set to roll out over the next 5 years, will see the G7 Development Finance Institutions (DFIs), including the UK’s CDC Group, support sustainable economic recovery and growth in Africa.

Responding to the G-7 investment plan, Teriba said Nigeria had no chance of benefiting from the fund, saying the funds would be released to the countries where the G-7 governments and partners already had their footprints.

He listed the countries and regional economic blocs to include East Africa, Kenya, Cairo to Cape Town are some of the places where the bulk of their previous funding have been sunk.
“When they say Africa, they do not necessarily have Nigeria in mind. Nigeria should not expect much from donor assistance,” Teriba observed.

Rather than waiting for the G-7 funds, EA’s chief executive urged the federal government or corporate interest to approach global equity markets to use our wealth of assets to raise ‘our own money’.
Teriba, therefore, observed that Nigeria should not be queuing up for a share of US$80 billion spread over 64 African countries in five years, and an average of US$16 billion to be spread across 54 countries per year.

He noted that there was no reason “to wait for G-7’s $80 billion investment funds when Brazil gets US$70 billion a year from FDI. India gets nearly as much, and China gets twice as much in annual FDI inflows.”
Teriba noted that Nigeria had more idle local assets spread across thousands of cities that could be funded with global equity than any of them.

Unlike Teriba, LCCI’s director-general, described the decision by the G7 countries to invest over $80 billion in Africa’s private sector over the next five years as a welcome development.
He said if finally deployed, the funds would surely boost economic growth and accelerate the pace of investment for countries that are able to access this facility.

Since the focus is on the private sector, LCCI’s director-general pointed out that project bankability and sustainability “are critical to accessing the funds.

“This underscores the imperative of the creation of an enabling environment for African countries to attract G7 investment funding offers,” he observed.
He explained that coming at the inception of the ACFTA “makes the development very timely. But it is the economies that offer the best investment opportunities and investment climate that would benefit the most.

He, thus, said the ability of Nigeria “to access this funding window will depend on how well we position ourselves. The critical question will be around expected returns on investment.

“Over all, it is the quality of the investment climate that will make the difference. We need to accelerate necessary reforms to make Nigeria a much better investment destination. We need policy reforms, regulatory reforms and institutional reforms, among others,” Yusuf suggested.

The director-general, similarly, emphasised the need “to accelerate the ongoing foreign exchange reforms; we need to undertake trade policy reforms to liberalise trade in sectors of weak comparative advantage.
“We need regulatory reforms to make regulations more investment friendly. We need to create new opportunities in the public private partnership space, mainly in infrastructure. We need to see more privatisation of public enterprises.”

Yusuf, also, recommended the exigency of “quickly fixing the ravaging insecurity in the country. All of these are crucial to boost investors’ confidence.”

Also commending the G-7 governments and partners for setting aside $80 billion for Africa’s private sector, Oyedele challenged Nigeria to set a target to attract at least 20 percent of the total investment.

To be attractive, according to him, the federal government needs to improve the business environment and reduce overregulation, which stifles growth.

Without the right policy environment, Oyedele observed that the risk of any investment proposition would be higher than it needed to be thereby affecting the overall viability and attractiveness.

Oyedele, also Chairman of the COVID-19 Intervention Committee for PwC West Africa, urged the private sector to be strategic in their approach with particular focus on green investment such as renewable energy given the objective of the G7 investment.

He said: “This can also help address Nigeria’s energy challenge while reducing the threat posed by the plan to phase out the use of petrol and diesel powered vehicles by 2030.

“Also, the private be sector should embrace the need to report on their environmental impact and demonstrate genuine commitment towards net zero by 2030.

“Nigerians companies also need to start exploring partnerships across the continent leveraging on the African Continental Free Trade Area agreement.

“Certainly a regional investment proposition cutting across a number of countries in Africa will be more compelling to attract the investment, and Nigerian companies must take the lead in this regard,” he said.

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