Nigeria needs policy changes to reverse capital flight -NIPC
Nigeria requires coherent policy changes and deep economic reforms to reverse the decline in the investment predicted in 2020-2021 and immediate years, the Nigerian Investment Promotion Commission (NIPC) has said.
Yewande Sadiku, NIPC Executive Secretary, made the call at a news conference it organised via webinar on Thursday in Abuja.
She expressed worry that due to the kind of levels being registered by the pandemic, the global update estimate on decline in FDI flows could be even less.
“We believe that bold and coherent policy changes and deep economic reforms would be required to reverse the decline in the investment that we foresee in 2020-2021 and immediate years,’’ Sadiku said.
In terms of government policies, she said that in the past government policies had driven FDI flows in Nigeria, adding that Nigeria attracted the highest levels of FDI because of material document policies that encouraged such.
“Everything from the sale of oil assets to indigenous companies to banking reforms and sale telecom licenses.
“We believe that the successor to the Economic Recovery Growth Plan (ERGP) that is currently in the process will clearly articulate the policy direction that government requires to take,” she said.
She said the best way to proactively position Nigeria is to ensure selling Nigeria on a sector base specific investment opportunities and proactive investment promotion, especially at this time of COVID-19 pandemic.
She noted that the impact of the pandemic from an economic and investment perspective was actually much, adding that while this presented challenges for most, there were equally interesting opportunities in various corners.
“We expect in reaction to the pandemic that there will be some polity and safety and the economies that will win will be those that will continue to provide attractive prospects for investors in a conducive business environment.
“We believe that most FDIs now will be looking for not just financial returns but some tangible impacts that there will be a greater focus on the developmental goals of SDGs and in that regards, we think that Nigeria presents a prime opportunity for any investor.
“The world has seen that a global concentration of production capacity in one country or region demonstrates risks that will be avoided in the future. So we believe in geographical diversification of production capacity or value chains.,’’ she said.
Sadiku also acknowledged the attractiveness of certain sectors, namely renewable energy, pharmaceuticals, healthcare and digital technologies; e-commerce, fintech, telemedicine and virtual schooling.
The United Nation Conference on Trade and Development (UNCTAD) had estimated that in 2020-2021 there will be a 30 to 40 per cent sharp decline in global Foreign Direct Investment (FDI) flows from their 2019 value of 1.54 trillion dollars.
According to the UNCTAD World Investment Report (WIR), COVID-19 pandemic causes steep drop in investment flows, hitting developing countries hardest, recovery is not expected before 2022.