Stakeholders call on Govt to articulate new strategies to promote sustainable FDI inflow, Infrastructure Development in Nigeria — Stakeholders
As Nigeria seeks to diversify its economy, stakeholders have renewed call for government to articulate new strategies that would reposition the country to attract more foreign direct investment (FDI) and boost infrastructure. The stakeholders, who spoke in an interview with The Guardian, submitted that the new strategies that would be adopted would make Nigeria more competitive in attracting FDI’s and tackle the nation’s infrastructure deficit. They argued that FDI is critical for economic growth and development but however noted that FDI inflows in Nigeria has been nothing to write home about when compared with other emerging economies.
According to them, capital importation in Nigeria is largely of the non-resident portfolio type, which easily takes flight at the slightest shock. Therefore, they suggested that government must continue to work on the nation’s investment climate through the use of incentives.
Specifically, the Director General of Lagos Chambers of Commerce and Industry, Muda Yusuf argued that there was need for government to provide an enabling economic environment for influx FDIs. Besides, he pointed out that there must be transparency, consistency in policy and regulation in the system.
According to him, any economy that operates in an environment where there is inconsistency in policy and regulation would continue to deter both local and foreign investment in the country. Furthermore, Yusuf maintained that the competition for global FDI has become stiffer urging government to tackle militating hurdles and pursue more credible and sound macroeconomic policies. He insisted that government must create that environment that would inspire confidence because infrastructure investment it is a long term project.
“If the risk is too high nobody will bring capital because there could be a change of government, policy, contextual obligation.. We had not witnessed good story on private sector infrastructure development. We need to derisk the environment. “ Domestically, no financial structure to support private sector investment in infrastructure because it need long term funding.
“Even private investment in the power sector is facing challenges of policy. Their experience is not palatable and prospective investors may los interest.” A Professor of Capital Market and the Head, Banking and Finance Department, Nasarawa State University Keffi, Prof Uche Uwaleke argued that government must continue to work on the investment climate in Nigeria with a view to improving the system through the use of tax incentives and addressing the issues around multiple taxes, enforcement of contracts, resolving insolvency, access to credit as well as enabling infrastructure especially transportation and electricity.
“Also, for FDIs to gain traction in Nigeria, the importance of sustaining exchange rate stability and the fight against corruption cannot be overemphasized.” An independent investor, Amaechi Egbo explained that the current state off the nation’s infrastructural facilities could be the bane of Nigerian development. He noted that FDI have played a critical role in accelerating infrastructure growth in other foreign jurisdictions.
According to him, FDI flows where there is stable government, clear and consistent policy and an investor friendly environment. He argued that Nigerian banks have played pivotal roles in financing infrastructural projects but however noted that one of the major constraint is that the Nigerian banks is still not able to provide long term funding.