Wale Edun, the minister of finance and the coordinating minister of the economy, has said that a $7 billion Foreign Direct Investment(FDI) has been secured in the oil sector to boost the country’s economy.
Edun, who appeared as a guest on Channels Television yesterday, said that the government was investing in port infrastructure to ease trading for investors, and boost the country’s productivity.
“In terms of figures, 7 billion dollars is estimated to come in from the oil sector with another major improvement in the economic environment, the national single window project, which really is an e-community and trade facilitation platform that will totally revolutionize what goes on at the ports,” he said.
He also stated that the government has invited private foreign investors interested in investing in different parts of the economy.
“One of the things that we need to do on our own side is that when you’re dealing with private business, you need to have in place double taxation treaties like Investment Promotion and Protection treaties. So we’re tidying up our end in terms of those agreements as far as private investment is concerned,” he said.
The minister’s comment follows the upheaval recently witnessed in Nigeria’s FDI as major companies, especially multinationals are exiting and limiting their presence in the country with Kimberly-Clark, makers of Huggies being the latest.
Nigeria is in dire need of foreign investment to improve its illiquid economy but the business environment seems challenging to prospective investors especially with the wrong sequencing of the macroeconomic reforms.
In his defence, Edun noted that Nigeria has improved its economic climate for investors by hiking interest rates and liberalising the FX market into the Willing Buyer, Willing Seller window.
“Companies will come and go but we intend to keep them. More are coming in. The president himself sells the prospect of Nigeria to investors,” the coordinating minister of the economy said.
Edun also stated that inflated food prices and the naira devaluation incentivize local production and create opportunities for local investors to drive productivity.
“The policy of the Nigerian government is that all government vehicles must be CNG powered, or must be electric, or solar powered.
“Any combination of the above is a major incentive to investors to come in and benefit from guaranteed patronage by the government,” he stated.
The Nigerian oil and gas industry was totally sidelined by foreign investors in the second quarter of 2023 for the first time on record with zero FDI, as the once lucrative sector attracted no capital inflow in the latest review quarter, BusinessDay earlier reported.
At its peak in 2014, Nigeria attracted the largest amount of FDI of any African country, with inflows exceeding $22.1 billion.
In the first quarter of 2023, oil FDI stood at $750, 000.
The country’s National Bureau of Statistics has not published its full-year 2023 FDI reports and its 2024 first-quarter FDI reports but it doesn’t take a seer to understand that the oil corporation is flailing.
“Prioritising political interests over transparency and due process in asset sales has led to corruption, mismanagement, and ultimately, the underperformance of the sector,” Avuru earlier told BusinessDay.
