Increasing investment inflow into Nigeria will require the country to develop a business-friendly environment while leveraging the resources in its non-oil sector according to economic experts.
This was discussed at the 2021International Investment Conference hosted by the Lagos Chamber Of Commerce and Industry (LCCI), themed repositioning Nigeria as a key global investment destination held via Zoom.
Toki Mabogunje, president, LCCI said Nigeria as the largest economy in Africa was one of the top three countries in the continent to attract the highest inflow of FDIs between 2010 and 2020, however investment inflows had steadily declined due to the economic headwinds the country has faced, including insecurity and foreign exchange challenges.
“To reposition Nigeria as a global investment destination, the Presidential Enabling Business Environment Council (PEBEC) must collaborate with relevant private and public sector institutions to improve the ease of doing business in Nigeria, also the Petroleum Industry Act 2021 must be speedily implemented to attract foreign investors to the oil and gas sector,” she said.
She also said that the government must establish industrial clusters and Special Economic Zones (SEZs) where robust infrastructure is provided and where lower levies and taxes are applied, while the border closure directive is reviewed.
Speaking on the African Continental Free Trade Agreement (AfCFTA), Mabogunje said the trade agreement provides a platform to boost FDI inflow into Africa especially Nigeria and its non-oil sector.
However, there is a need for more enlightenment and capacity-building of expertise to guide the business community in harnessing these opportunities.
“We are excited about the signing of the AFCTA, but we need to get ourselves ready for the pressure of competition inherent in the continental economic integration agenda, we would like to see a new funding model with a much bigger focus on private sector capital within a Public-Private Partnership [PPP] framework for infrastructure development in the country,” she said.
Bola Onadele Koko, CEO, FMDQ OTC Securities Exchange, said that Nigeria’s economy remains largely dependent on foreign exchange earnings from the oil and gas sector even though it accounts for 10 percent of the country’s GDP while the non-oil sector has proven resilient to macroeconomic realities.
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“The non-oil sector retains the capacity to attract increased foreign capital from investors seeking to exploit Nigeria’s demographic potential, also increased export from the non-oil sector will help reduce Nigeria’s dependence on the oil sector,” he said.
Koko who was represented by Vincent Nwani, head of research, FMDQ said that positioning the Nigerian non-oil sector as a destination for investment can be partly realized through a vibrant capital market characterized by a high level of liquidity, depth and transparency.
Amr Kamel, Executive Vice President, Business Development & Corporate Banking, African Export-Import (Afrexim) Bank in his presentation titled reinventing the Nigerian investment climate for sustained FDI inflows said FDI into Nigeria has declined prior to the pandemic outbreak but was aggravated following the pandemic.
“A number of reforms have been introduced in recent years to improve the ease of doing business in Nigeria but much still needs to be done to attract greater volume and variety of investment into Nigeria,” Kamel who was represented by Intong Monchu, regional chief operating officer, Anglophone West Africa, Afreixm bank said.
He recommended that Nigeria addressed infrastructural deficits while establishing a business-friendly environment and policies for foreign and domestic investors. He added that Nigeria should also tap into its huge diaspora potential to increase investment inflow.
