Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, has said that if Nigeria is determined to attract Foreign Direct Investments (FDI), it must start with creation of the right environment and appropriate fiscal incentives to out-compete current preferred destinations of foreign capital such as China, India, Vietnam, among others.
Chukwu said that Foreign Direct Investors will go to a country with stable macro-economic policy environment with Low or moderate inflation; Stable interest rates; Stable or predictable exchange rates; Easy access to foreign exchange and Minimal capital controls.
Chukwu who stated this in his presentation at the bi-monthly forum organised by the Finance Correspondents Association of Nigeria (FICAN), noted that Investors are interested in large and skilled labour market, relatively free labour of less union and government control.
He noted that Nigeria recorded $1.44 billion inflow of Foreign Direct Investment (FDI) in 2015, $1.028 billion recorded in 2020 as against $340.55 million in nine months 2021, which according to him, is a far cry from those of other countries in the region.
“Investors gear their foreign direct investments toward economies where they have the highest potential for profit and the least risk. As such, the dent of the social unrest to the image and perceived risk of long-term capital investment would mean that the country will struggle in attracting the much-desired long-term finance needed for accelerated growth and enhanced job opportunities,” he said.
Speaking further, he highlighted reasons why the Nigerian government’s investment in capital project will be low this pre-election year, stressing that the country needs appropriate policies that will attract Foreign Direct Investment (FDI).
The securities dealer revealed that because of the US Fed’s normalization exercise, interest rate will be high globally.
