Experts urge Govt to open more doors for foreign direct investments
A former Senior Economist with the International Monetary Fund (IMF), Prof. Olumuyiwa Adedeji; the Chief Executive Officer of Economic Associates, Dr. Ayo Teriba; the Dean, Faculty of Economic and Management Science, University of Ibadan (UI), Prof. Olanrewaju Olaniyan; Head of Economics Department of UI, Prof. Adeola Adenikinju and others, have urged the Federal Government to open its doors to foreign direct investments (FDIs) to reduce the nation’s debt and increase revenue.
They made the call during a symposium tagged: ‘Budget 2023 Seminar’, organised by the Economics Department of UI in conjunction with UI Eco Alumni Council.
The event, which took place at the Economics Department of the premier university, was chaired by Prof. Ibi Ajayi.
Teriba, who is the Interim Chairman of the UI Eco Alumni Council, pointed out that debt financing could lead to doom, but equity financing could lead to El Dorado.
While charging the Federal Government to increase the nation’s revenue, he said: “The Federal Government must open its doors for an increased inflow of Foreign Direct investments (FDIs). With this, debt will reduce, naira will be strong and we will have more to spend on infrastructure. If you want to spend more, you earn more”.
Speaking, Prof. Adenikinju said when FDIs are employed, it would come with new technology “because you are trying to get foreign capital to come in and invest to create jobs, value addition and so on.
“And if the environment is very conducive, it will lead to having a more stable income for the country. FDI is not very volatile unlike foreign portfolio investments or exports.
“We are sitting on a lot of assets and if we properly value them, foreigners can buy shares, acquire equity and then that will bring in more money for the government, so these are non-debt ways to finance the budget’’, the HOD said, stressing that, ‘’ if the country is going to do FDIs, then it must create an environment that will facilitate it’’.
Prof. Olaniyan said the seminar identified that many of the issues that were in the National Development Plan (NDP) 2021 to 2025, which the budget is expected to contribute to have not been done so, the budget appears to be working differently from what the NDP thinks it should.
Olaniyan, who spoke on “Fiscal and Structural Reforms to boost Nigeria’s Economic Prosperity Beyond Macroeconomics’’, said when the budget is prepared, it has to be in sync with the population structure.
‘’While we have a low tax-to-revenue base is because we are not considering the proportion of Nigerians that are working.
“Only 17 per cent of Nigerians are employed and it is their income that we are taxing, then we can only expect that tax revenue to GDP will be low’’, he said.
Speaking on “Enhancing Revenue Collection for Growth and Development,” Dr. Adedeji, said the Federal Government should consider total and permanent removal of PMS subsidy and streamline existing VAT exemptions as measures to increase revenue.
Dr Afolabi Olowookere, in his presentation on “Improving the Level of Composition of Public Expenditure,” argues that for Nigeria to earn more, it has to spend more, especially on capital projects.
He said, “The size of the Nigerian government budget has risen significantly over time, but compared to the size of the economy, it is relatively small.