Nigeria Requires Bold Reforms To Reverse Investment Decline – NIPC

The Nigerian Investment Promotion Commission on Monday said that Nigeria requires bold and coherent policy changes and deep economic reforms to reverse decline in Foreign Direct Investments flow expected in the 2021 fiscal period.

The Executive Secretary of NIPC, Yewande Sadiku said this at the Commerce and Industry Correspondents Association of Nigeria 2020 Retreat in Abuja.

Sadiku said due to the Coronavirus pandemic, a decline of between 40 to 50 per cent is expected in 2020/2021, adding that this is the lowest level in almost 20 years.

In a presentation entitled “Understanding the Impact of COVID-19 on Investment in Nigeria’’ Sadiku highlighted the impact of COVID-19 pandemic on global economic growth and FDI.

She said globally, FDI had been falling since 2015 while in Nigeria FDI flow has been under pressure before COVID-19.

She noted that the impact was expected to be worse than the global financial crises due to the negative effect of the Coronavirus pandemic.

She said that FDI was stagnated during the COVID-19 lockdown because there was shutdown on implementation of ongoing projects due to closures of sites.

SADIKU explained that due to the pandemic, there was tightening margins for investment while there was automatic effect on reinvested earnings, a key component of FDI.

Based on NIPC investments announcement, Sadiku noted that the Commission tracked $41.71bn investment in 2017, $73.07bn investments in 2018, $24.44bn in 2019 and $9.01bn in 2020.

To reverse this trend, the NIPC Boss
requested for a more proactive government approach to support investors across the federation to convert more announcements to actual investments.

Speaking on the latest World Economic Outlook Growth Projections, she said Nigeria’s Gross Domestic Product projection was 2.2 per cent in 2019, 4.3 in 2020 and 1.7 being projected for 2021.

According to Sadiku, these projections are expected to be lowered as long as the pandemic persists.

She advised that the Nigerian industrial development policies should align with foreign exchange to support FDI generation.