Nigeria Needs Tailored Policies, Incentives To Attract More FDIs – Expert

Managing Director, Cowry Asset Management Limited, Johnson Chukwu,

says Nigeria’s Federal Government must begin to deliberately create an enabling environment, by fashioning appropriate policy measures, if she is truly determined to attract Foreign Direct Investments.This, he noted, is in addition to offering appropriate fiscal incentives to ‘out-compete’ today’s preferred destinations of foreign capital like China, India, and Vietnam, among others.

Foreign Direct Investors, he argued further, will go to a country with stable macro-economic policy environment with low or moderate inflation; stable interest rates; stable or predictable exchange rates; easy access to foreign exchange and minimal capital controls.Speaking at the February 2022  bi-monthly forum of the Finance Correspondents Association of Nigeria (FICAN) in Lagos, he said Investors are interested in large and skilled labour market, relatively unencumbered by union and government control.He noted that Nigeria recorded $1.44bn FDI inflow in 2015, but the figure fell to $1.028bn  in 2020, and then $340.55m in the first 9 months of 2021.

This, he lamented, is a far cry from those of other countries within the region.According to Chukwu, “investors gear their foreign direct investments toward economies where they have the highest potential for profit and the least risk.

As such, the dent of the social unrest to the image and perceived risk of long-term capital investment would mean that the country will struggle in attracting the much desired long-term finance needed for accelerated growth and enhanced job opportunities.”Speaking further, he detailed reasons why the Nigerian government’s investment in capital projects will be low this pre-election year, stressing that the country  needs appropriate policies that will attract Foreign Direct Investment (FDI).

The securities dealer revealed that because of the US Fed’s normalization exercise, interest rate will be high globally. He therefore projected that  the government may not borrow at the international market, neither will there be sufficient liquidity to be borrowed from the local bond market to finance the 2022 budget deficit.

As such, Chukwu expects that the Nigerian  government will do minimal capital investment this year, but make more political expenditures, especially on activities that will keep the voters happy so as to get their votes.According to him, though government will pay salaries and other overhead expenses, the private sector will smile as some sectors will have good patronage. 

These sectors are: advertising, printing and designs, blogging, media and television through adverts; food and beverages, breweries and people in the fashion industry, comedians and musicians.FICAN, an umbrella body of Nigeria’s finance journalists drawn from print, online and electronic platforms, organizes its monthly capacity building 0rogramnes to keeping members abreast with current developments in the economy