Financial experts list ways to sustainable economic recovery
• Say FDI will address infrastructure deficit, others
Irked by the huge infrastructure deficit in Nigeria, experts in the financial system have stressed the need for government to open up opportunities and attract the needed Foreign Direct Investment (FDI) that would be deployed into specific sectors of the economy for sustainable growth.
Participants that gathered at a one-day forum of the Association of Corporate Treasurers of Nigeria (ACTN), maintained that Nigeria’s economic recovery efforts and growth required major investment in critical sectors of the economy and massive infrastructural development.
According to them, if Nigeria would attract the needed foreign capital inflow into the country, it would accelerate developmental programmes, boost infrastructure, and create more job opportunities for the people.
The experts also suggested that government needed to embark on capital projects, which will enhance the infrastructure facilities that foreign investors can build on.
For instance, the Chief Executive Officer of Economic Associates, Ayo Teriba, submitted that the nation’s poor infrastructure is one of the country’s greatest challenges when it comes to attracting capital, as it makes Nigeria less competitive in almost all sectors.
Teriba, who noted that this is already having major ripple effects, with significant drag on the economy, therefore, urged government to focus more on attracting and encouraging more inflows of foreign capital to channel on infrastructure and other growth induced projects to enhance competition.
According to him, Nigeria relies almost exclusively on volatile export income for foreign exchange supply, thereby neglecting opportunities to attract massive and much more stable diaspora and foreign direct investment inflow into the country.
He noted that Nigeria used to attract more FDI than India, South Korea, South Africa, and UAE, all of which have however overtaken the country.“Nigeria used to attract more FDI than India, South Korea, South Africa, and UAE but one after the other, they have all overtaken Nigeria. Non-resident Indians and non- resident Chinese invest wisely at home to fund economic recovery and growth efforts.
“Why did it not occur to us in Nigeria to do the same before now? We must break all government monopolies as we did in telecoms sector; all companies that should attract meaningful FDI remain under government monopoly. We need to open up to FDI.
“We need to be stable in export and investment inflow. We need to open the ban for foreign exchange to flow through foreign inflow like soliciting remittances from diaspora. If we had pushed millions of diaspora bond, we would have gotten more cash.
“Government could sell part of its shares in power transmission and gas pipeline. Government can get big hospitals across the country that have diagnostic ability and ask them to install across all teaching hospitals in Nigeria. This will attract foreign investors and Nigerians would not need to run tests outside the country again.
“We need to replicate the success made in the telecom sector to other sectors. We need to mitigate foreign exchange shortfalls and boost infrastructure gap in Nigeria,” he added.
Also speaking, a financial analyst, Ayokunle Ojo, said for Nigeria to attract meaningful FDI that would help address the infrastructure deficit; enabling environment must be created with much emphasis on improving the ease of doing business.
According to him, to promote and encourage FDI, incentives must be given to attract quality investments, adding that these incentives may come in form of relaxing strict investment laws and cumbersome procedures, by granting tax holidays to certain industries that would promote and increase the country’s GDP.
Another analyst, Revan Wickramasuriya, stressed the need for the Central Bank of Nigeria to put modalities in place that would sustain the new foreign exchange (FX) window for investors, exporters and end-users.
He pointed out that the sustainability of the special FX window would create some reasonable level of recovery for the economy, which would ultimately attract foreign investors into the country.He added that it would also improve liquidity in the market and spur activities in various sectors of the economy.