Nigeria needs deep economic reforms to reverse FDI decline in 2021 – NIPC

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By Emmanuella Anokam

Abuja, Dec. 21, 2020 The Nigerian Investments Promotion Commission (NIPC) says Nigeria required bold, coherent policy changes and deep economic reforms to reverse the decline in Foreign Direct Investments (FDI) inflow expected in 2020/2021.

NIPC executive secretary Yewande Sadiku, who said this at the Commerce and Industry Correspondents Association of Nigeria (CICAN) 2020 Retreat on Monday, in Abuja, explained that a 40-50 per cent decline was expected in FY2020/2021, 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 inflow had been under pressure even before COVID-19 and its impact was expected to be worse than the global financial crises, with recovery not expected before 2022.

According to the NIPC chief executive officer, material FDI flows could only be driven by government policies and these flows were stuck following the COVID-19 lockdown, which forced a shutdown on implementation of ongoing projects.

The NIPC boss explained that due to the pandemic, there was tightening margins for investment and an automatic effect on reinvested earnings, a key component of FDI.

She equally noted that investment interest in Nigeria was already under pressure even before COVID-19 and coherent investment-supporting policies would urgently be required to reverse the trend.

Based on NIPC investment announcements, Sadiku noted that it tracked $41.71 billion investment in 2017, $73.07 billion investments in 2018, $24.44 billion in 2019 but only $9.01 billion in 2020.

On this note, she called for a more proactive government approach to investor support 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 (GDP) projection was 2.2 per cent in 2019, .4.3 in 2020 and 1.7 being projected for 2021, but these forecast would be lowered so long as the pandemic persists.

She advised that the nation’s Industrial development policies should align with foreign exchange to support FDI generation.

Sadiku noted that global cases of COVID-19 infection hit 50 million in 271 days from Feb. 29 to Nov. 30, 2020 and presently exceeds 72 million cases as at Dec. 18 with over 1.6 million deaths.

Decrying the speed at which the infection was spreading, she noted that in Nigeria coordinated efforts were required to manage investors’ concerns, minimise job losses and restore confidence.

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