By Bassey Udo
To attract foreign direct investment (FDI) into the economy, the Nigerian government must focus attention on the development of key sectors, the Nigerian Economic Summit Group (NESG) has said.
The economic ombudsman group gave the advice on Monday during a #NES28 Presummit Event on the theme “Repositioning Public Governance in Nigeria for Global Competitiveness, investment attraction and Sustainable Development.”
The event organised by the NESG in collaboration with the Federal Ministry of Finance, Budget and National Planning urged the government to identify economic areas in which Nigeria has a sectoral advantage and focus on, to improve its FDI attraction.
“Nigeria’s growth has been driven by sovereign debt-induced growth, and the time is set for Nigeria to look at a different model that can help our country take a different approach to investment attraction,” NESG Board Member, Kyari Bukar said in his welcome remarks at the event.
Bukar said the level and quality of investment a country attracts depends on the quality of capital it receives and its commensurate return on investments.
He said the National Development Plan (NDP) 2021-2025 aimed at unlocking Nigeria’s potential across various sectors of the economy, to facilitate sustainable and inclusive development.
Citing the example of Abu Dhabi in the United Arab Emirates, Bukar said the city deepened the attraction of FDI to the health sector, because it identified the provision of top-notch healthcare services, and positioned itself as an incubator for quality delivery.
The country director, Development Alternatives Incorporated (DAI), Joe Abah, said the ability to hold politicians to account was a critical element of democracy and development.
Abah said some of the problems the country was facing in attracting investment were as a result of the issue of quality governance across all tiers of government and lack of an effective merit-based system.
To enable and strengthen the country’s progress in attracting foreign investments. Abah said there was need to improve national security, entrench safer transportation systems and focus more on ease of doing business.
The importance of introducing cash-based incentives in business regulatory environments, he noted, was important, as they can help states and sub-nationals become more transparent.
He reiterated the importance of reforming business investment centres, noting that the public sector has a vital role in facilitating and coordinating investment promotion.
On his part, the chief executive officer for the promotion of private enterprise, Muda Yusuf, said there was a need to change the public sector mindset from wanting to dominate the investment space to seeing the private sector as partners.
Besides, he stressed the need to change the Ideological disposition of government players that don’t believe in a free market economy.
An investment professional, Yewande Sadiku, said Nigeria tends to underestimate the importance and efficiency of the judiciary and the various challenges, including corruption and bureaucracy.
Sadiku, who is the immediate past Executive Secretary, Nigerian Investment Promotion Commission (NIPC) said these challenges were what investors face with getting goods out of Nigeria and obtaining and transferring foreign exchange.
She observed that only a few companies could produce what they require in Nigeria without importing, while investors need the capacity to import and export foreign currency and require stability in the macroeconomic and political environment to plan for the future.
Portfolio investors, she said, have helped to keep the capital market visible, even as research showed a considerable percentage of investors start as portfolio investors before graduating to the direct investment end when they experience a favourable business environment.
Special adviser to the President on Economic Matters in the Office of the Vice President, Adeyemi Dipeolu, who was represented by the Special Assistant to the President on finance, Office of the Vice President, Louisa Chinedu, said bureaucracy was a major problem experienced in public governance.
He said that public service has a significant influence on investor decision.
“A study by the World Bank identified government responsiveness as the most important factor in encouraging foreign direct investments.
” Policy information, regulation and service delivery, recruiting on merit, training and fostering coordination across all sectors of government are all critical factors that can improve investment attraction, as various Studies, having established a correlation between attracting FDI and poor governance,” she stated.
Chinedu noted that Brazil was the 7th largest destination for global FDI flows in 2021 as a result of the critical reforms the country undertook in business and governance.
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