Chukwu Highlights What Nigeria Should Do To Attract Foreign Investment

An Economist Mr. Johnson Chukwu, says if Nigeria is determined to attract Foreign Direct Investments, it must start with creating the right environment as well as appropriate fiscal incentives to out-compete current preferred destinations of foreign capital such as China, India, pVietnam, among others.

Mr Chukwu who stated this in a presentation at the bi-monthly forum of the Finance Correspondents Association of Nigeria, FICAN, in Lagos noted that Investors are interested in large and skilled labour market, relatively free labour of less union and government control.

According to Mr Chukwu, Foreign Direct Investors, FDI, will go to a country with stable macro-economic policy environment including Low or moderate inflation; Stable interest rates; Stable or predictable exchange rates; Easy access to foreign exchange and Minimal capital controls.

He noted that Nigeria recorded $1.44 billion inflow of FDI in 2015, as well as over 1 billion dollars recorded in 2020 as against $340.55 million in 9 months in 2021, which according to him, is a far cry from those of other countries in the region

Mr Chukwu pointed out that “Investors gear their foreign direct investments toward economies where they have the highest potential for profit and the least risk.

He explained that 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, Mr Chukwu detailed why the federal government’s investment in capital project will be low this pre-election year, stressing that the country needs appropriate policies that will attract Foreign Direct Investment.

The securities dealer revealed that because of the US Federal’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 in order to finance the 2022 budget deficit.

As such, Chukwu espoused that the federal government will do minimal capital investment this year but will do more political expenditures especially on activities that will keep the voters happy in order to get their votes.

According to the economist, although government will pay salaries and other overhead expenses, the private sector will smile as some sectors will have good patronage.

Mr Chukwu enumerated such sectors to include: advertising, printing and designs, blogging, media and television through adverts

Others are food and beverages, breweries and people in the fashion industry, comedians and musicians.

FICAN is an umbrella body of Nigeria’s finance journalists drawn from print, online, Radio and television platforms

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