There can be no gainsaying the fact that Nigeria needs to stop the hemorrhaging of foreign investments.
To put the development into perspective, foreign investors ignored 27 states as the value of capital importation into Nigeria fell by 20.5 percent to $5.33 billion in 2022 from $6.70 billion in 2021.
According to the NBS data, the 27 states snubbed by investors include Abia, Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Enugu, Gombe, Imo, Jigawa, Kaduna, Kano, Kebbi, Kwara, Nasarawa, Niger, Ogun, Osun, Rivers, Sokoto, Taraba, Yobe, and Zamfara.
In 2022, only ten states attracted foreign investments. Lagos took the lead with $3.61 billion as it outshined others. The Federal Capital Territory (FCT) attracted the second highest, $1.63 billion. Akwa Ibom attracted $42.52 million; this was followed by Anambra with $36.97 million, Oyo with $3 million, Kogi with $2 million, Katsina, Ekiti, Ondo, and Plateau with seven hundred thousand, five hundred and ten thousand, two hundred thousand and forty thousand dollars respectively.
The chairman, Association of Securities Dealing Houses of Nigeria, Sam Onukwe, had identified some factors such as security challenges, inflation rate, taxation of market instruments, especially, Capital Gain Tax, a disincentive to investors, the government’s management of debt, funding of budget deficit, privatisation of moribund parastatals among others to determine the investment environment and drive activities in the Nigerian financial market in 2023.
He stated that the market would have earned higher but for the incessant review of the Monetary Policy Rate (MPR), rising inflation rate, and the inconsistent exchange rate that characterized investment activities in the review period.
However, the body language of the president clearly shows that he is keen about reversing that trend. His recent trips abroad have the potential of attracting foreign investment to the tune of $50 billion. However, the green light being shown by potential investors is clearly the result of investor-friendly policies that have been put in place by the Tinubu administration. The removal of fuel subsidies is an incentive to potential investors in Nigeria’s petroleum industry.
The exchange rate subsidy removal potentially opens up a whole gamut of opportunities for foreign investors, including the aviation industry, in the Nigerian economy.
Another incentive to foreign investors is the streamlining of taxes in the country. PriceWaterhouseCooper had estimated that Nigeria operated circa 65 different taxes. These had ranged from the federal government to the local governments, making many investors decry multiple taxation, which is a disincentive to investors.
Tinubu has initiated the move to streamline taxation to ten; many foreign industry watchers must be taking note, hence the green light signal being accorded.
But the revival of the Nigerian economy and attraction of foreign investors would take a lot more effort, considering the fact that there had been what many economists consider confusing monetary and fiscal policies over the last eight years.
The chief executive of Anthill Concepts Limited, and member of the Board of Economists, NATIONAL ECONOMY, Dr. Emeka Okengwu, said the trips the president is making and the deals he is striking with other economic partners is good news. He said we are not getting rejected by our partners. He contrasted the last eight years as being really challenging in terms of monetary and fiscal policy alignment.
He said while the policies by the present administration have not yielded the desired outcome yet, Tinubu’s policies have been very proactive and ingenious, stressing that while things are bad at the moment it is not irredeemable. He said the mere fact that the president’s trips abroad so far have potentially cumulatively attracted close to $50 billion, is not bad.
He however noted that there are a lot of challenges in getting Nigeria out of the current economic doldrums as the country’s population growth is more than its economic growth, caveating that it does not mean we are over the cliff.
Okengwu stated that the best way out of the problem is to spend your way out of the challenge, noting that Nigeria should begin to spend money to improve the infrastructure that can support productivity. He said Nigeria should focus on the real sector that can put young people back to work.
He cited that Nigeria should get involved with technologies especially that support food production.
He stressed that the president should begin to build clusters of MDAs that will begin to stick together and focus on productive programmes such as forestry, fishery, and animal husbandry and to get the farmland productive again, not with rented agriculture, but with technology-supported food systems.
He added that Nigeria should begin to get the local car manufacturing companies to begin to reduce the importation of such goods, noting that if the government is serious and proactive about these recommendations the nation will begin to witness positive change within six months to a year.
A financial economist at Nnamdi Azikiwe University, Dr. Felix Echekoba, cited security as a challenge. He cited that bandits have evolved into a well-organized guerrilla movement, posing a significant security threat, especially in the North. “While addressing this challenge, President Tinubu must not lose sight of other forms of terrorism. His administration must take comprehensive steps to quell banditry promptly,” he said.
Another economist, Dr. Zakari Mohamed, who lectures at Auchi Polytechnic, said the cost of running Nigeria’s government is excessively high. He said President Tinubu can swiftly reduce expenses by merging or eliminating some federal parastatals and boards. The concept of a minister of state, as questioned by former Minister Festus Keyamo (SAN), should be reevaluated. Trimming presidential aides’ numbers and redirecting funds toward alleviating citizens’ hardships is essential.
He stated that the government’s bloated civil service is a fertile ground for bureaucracy that slows the processing of documents down.
Ben Atuma, an economic affairs analyst, said the cost of doing business in Nigeria is as high as coming to Nigeria. He said many foreign investors and potential tourists are turned off at the mention of $250 for a visa to Nigeria, stressing that there is a need to review the cost of coming to Nigeria.
NATIONAL ECONOMY notes that President Tinubu’s ‘Renewed Hope’ agenda hinges on his ability to tackle these perennial problems effectively. Nigerians are looking to him for leadership that brings about meaningful change and addresses their pressing concerns.
