What Nigeria Must Do To Improve Foreign Direct Investment—-ACMAN President

Nigeria needs to engage its embassies in countries that have huge Foreign Direct Investment prospect to improve its capital importation, Uche Uwaleke, Professor of Capital Market and President, Capital Market Academics of Nigeria, has said.

The latest Capital Importation report of the National Bureau of Statistics revealed that the value of investment inflow dropped to $1.3bn in the second quarter of this year.

Uwaleke said on TVC News Business Nigeria that the size of Nigeria’s capital importation is not proportionate to the size of the country’s population.

The ACMAN President noted that Africa’s most populous country “should command more capital importation,” than its current position

He said there should be a deliberate policy by government to involve embassies to be part of attracting investments into Nigeria.

According to him, part of what government should do is to provide adequate funding for the embassies to engage the business communities.

He said in view of funding limitations, government should identify countries that are active in Foreign Direct Investments.

The expert listed Singapore, Netherlands, Japan, China and Mauritius as countries that are active in FDI.

He added that the country needs to actively engage these countries to invest in Nigeria.

Evaluating the sharp decline in Africa’s largest oil producer, Uwaleke said Nigeria’s capital importation appears to fluctuate with oil price performance.

“Any time you see oil prices going up, capital importation is up and when oil prices go down, capital importation goes down,” he added.

Nigeria had in 2016 seen its capital importation sink to $1.04bn following decline in oil prices.

The expert said the fall recording in Nigeria’s capital inflow was compounded by Covid- pandemic.

Uwaleke noted that over the years, major source of the country’s capital import has been the UK and US.

He said the two country’s were hit by the pandemic and are facing recession.

The UK had announced contraction of its economy by over 20 per cent, while the US economy contracted by 32 per cent in Q2.

The Professor said, “If these country’s are in fierce contraction, then it is also expected that the inflow from them will also drop.”

On suggestive return of foreign Capital into the country he said, the Q2 record of $1.3bn represents the worst scenario for the country.

Uwaleke said, “Going forward, I want to believe the Central Bank’s injection of liquidity in the foreign market to stabilize it and also given the improvement in manufacturing data that we are having even across the world, the Q3 and Q4 will witness better performance.”

He explained that the country needs to fix its infrastructures and security challenges to allow foreign investors to come into the country’s economic space.