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Nigeria to issue foreign currency bonds as FDI drops from $22.7 bln to $3.7 bln in 10- years

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Nigeria has witnessed a staggering decline in foreign direct investment (FDI) over the past decade, plummeting by a staggering $19 billion from 2014 to 2023.

The stark contrast from $22.7 billion in 2014 to a mere $3.7 billion in 2023 underscores the pressing economic challenges facing the nation.

During a presentation at the Lagos Business School Breakfast Club, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, shed light on this concerning trend, addressing top business leaders in Lagos.

Edun outlined the government’s endeavours to confront these challenges head-on, emphasising the pivotal role of FDI in bolstering forex reserves and stimulating economic growth.

However, the trajectory of FDI inflows tells a disheartening tale, with successive years witnessing a downward spiral.

The decline in FDI, as disclosed by Edun, reveals a pattern of diminishing investor confidence over the years. Despite sporadic upticks in certain years, the overall trend paints a sobering picture of Nigeria’s attractiveness as an investment destination.

READ ALSO: Nigeria’s oil reserves surge to 37.5 bln barrels, gas resources reach 209.26 TCF ~ NUPRC report

In a bid to address the currency instability exacerbated by dwindling FDI, the government plans to issue domestic bonds denominated in foreign currency. This initiative aims to shore up forex reserves and restore stability to the national currency.

Moreover, recent assertions by Minister of Trade, Industry, and Investment, Doris Uuzoka-Anite, regarding a purported $30 billion influx of investments during President Bola Tinubu’s tenure, offer a glimmer of hope amidst the gloom.

However, scepticism looms over the realisation of these investment commitments, with the timeline for actual inflows stretching over several years.

Nevertheless, challenges persist on the foreign investment front, with Edun highlighting external factors such as inflationary pressures in Western nations that dampen investor enthusiasm.

Consequently, the government is compelled to explore alternative avenues for economic revitalization, including domestic resource mobilization and corporate partnerships.

Edun underscores the imperative of attracting diverse forms of investment to fuel economic expansion, create employment opportunities, and alleviate poverty. Aligning with President Tinubu’s economic vision, the government is resolute in its pursuit of fostering an environment conducive to both domestic and foreign investments.

As Nigeria grapples with the daunting task of reigniting investor confidence, the onus lies on policymakers to implement robust strategies aimed at revitalising the economy and positioning the nation as a magnet for global capital.

(Edited by Oludare Mayowa; omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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