Chukwu
Nigeria must out-compete China, India, Vietnam and others credible competitors to attract the needed Foreign Direct investment, FDI, for development.
The Managing Director, Cowry Asset Management Limited, Johnson Chukwu, gave the submission at a forum organised by the Finance Correspondents Association of Nigeria, FICAN, at its headquarters last week in Lagos.
In his presentation, the financial expert said to attract the much needed FDI, Nigeria 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, Vietnam, among others.
In his words: “FDI flows to countries with stable macro-economic policy environment, Low or moderate inflation; Stable interest rates; Stable or predictable exchange rates; Easy access to foreign exchange and Minimal capital controls.
According to the Cowry Assets CEO, investors are more interested in less expensive large skilled labour market relatively free of union and government controls.
“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,” he said.
In his outlook for the year, he argued that the Nigerian government will be investing more on election related projects and les in capital projects stressing that the country needs appropriate policies that will attract greater Foreign Direct Investments.
The Financial expert predicted that the current US Fed’s normalization exercise will spike interest rates globally and projected that government may find it difficult to borrow at the international market.
He also noted that in the local bond market there may not be sufficient liquidity to finance the huge 2022 budget deficit.
Consequently, Chukwu forecast that the Nigerian government minimal will do more political expenditures especially on activities that will keep the voters happy in order 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.
“The 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 is an umbrella body of Nigeria’s elitist financial journalists drawn from print, online, Radio and electronic platforms.
