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‘Lack of economic roadmap responsible for dearth of foreign investment’

By Mathias Okwe (Assistant Business Editor),  Abuja 
31 July 2016   |   4:21 am
Over N11t of Foreign Direct Investments (FDIs) into Nigeria have been lost within four years, between 2011 and 2015, with the hardest hit year being last year, 2015 when the level drastically dropped to a record low of one trillion naira


• Nigeria Loses N11 Trillion FDIs In Four Years
Over N11t of Foreign Direct Investments (FDIs) into Nigeria have been lost within four years, between 2011 and 2015, with the hardest hit year being last year, 2015 when the level drastically dropped to a record low of one trillion naira

A report by the Central Bank of Nigeria (CBN); the National Bureau of Statistics  (NBS) and the United Nations Conference on Trade and Development (UNCTAD) obtained by The Guardian at the weekend in Abuja, showed that in 2011, FDIs inflows to the country increased by a little above a trillion Naira from N11.68t from the previous year to a level of N12.729t, according to a Survey of Foreign Assets and Liabilities (SOFAL) in Nigeria Report by the Statistics Department of the CBN, just released.

Reacting to the development, an economist and Director working with one of the key agencies of the Federal Government charged with infrastructural delivery said it was not surprising, because the current administration was yet to produce a clearly defined economic blueprint, which should guide foreign investors to take investment decision in-country, declaring that the only predictive policy about the administration is “unpredictability.”

He regretted that things were in a state of flux in the economy to the extent that the budget is only implemented in the media with no physical releases being made to MDAs to carry out real implementation, pointing out that contractors were yet to mobilize to site. 
His words: “ It is obvious now, investors are always very conscious of what happens in the environment. It is a reflection of the mood of the nation, the mood of the economy. So, they are watching. They are just sitting on the fence, they are watching to see what direction and right now, even the economic direction of the country is not even known to anybody. Nobody knows where we are going. There is no roadmap and you can’t expect investors to bring in their money. 

“ The little FDIs we are getting is just in form of remittances from Nigerians overseas. But the core investors they don’t want to come in like that, they want to see the direction of things before they can bring in their money. So, there has to be a concrete economic blueprint for them to look at. Even the portfolio investors all of them, they know what is even happening in the economy. You cannot gamble with your money and throw it in, you cannot predict and you cannot invest, that is how the situation could be, so it is difficult honestly. 

“ You shouldn’t blame any investor right now; everybody is sitting on the fence to see what happens in the next quarter. But actually this is supposed to be the time for investors to bring in money, the period of economic recession, but because there is no clear economic blueprint so they have to tarry a while and see where the direction is going”

UNCTAD in its World Investment Report 2014, released over the weekend while reviewing FDI inflows to Africa in 2013, ranked Nigeria third behind Mozambique and South Africa in terms of FDI inflows to Africa last year. The report revealed that Nigeria slumped from its number one position in 2012 to achieve $5.61b (N1.103 trillion) in FDI inflows last year.

The drastic drop in FDIs into the country last year will not be surprising following the face-off between Nigeria and the country’s delisting by JP Morgan from its Government Bond Index – Emerging Markets (GBI –EM Bonds) between September and October last year.

The NBS’s Nigerian Capital Importation Report for the Third and Fourth Quarters of 2015 released in March this year said FDIs inflows into the country as both equity investments and portfolio investment  (also known as Hot money) decreased by 82.4 per cent and 64 per cent respectively.

Though the report was silent on the reason for the drastic drop in FDI inflows for the last two quarters, economic experts in the wake of the warning by JP Morgan last year warned of the devastating consequences of Nigeria’s delisting from the JP Morgan Emerging Market Index.

But the Director General of the Debt Management Office (DMO), Dr. Abraham Nwankwo and officials of the Central Bank of Nigeria (CBN) allayed Nigerians’ fears, insisting that the action may not pose any threat to Nigeria’s FDI drive.

However, the NBS Report indicated otherwise as it said during the two quarters Nigeria suffered serious FDI inflows.

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