Lack of critical policy reforms in the country has been linked to significant decline in Foreign Direct Investments (FDIs) into the country from $5.6 billion in 2015 to $2.1 billion recorded at the end of 2016.
Financial analysts believe that Nigeria has refused to reform, because of either political, religious or ethnic tensions, while other countries similar to Nigeria that have similar commodity driven environment, such as Russia, Brazil and South Africa, as a result of their rapid reformations have been able to attract enough foreign direct investments (FDIs) and foreign portfolio investment (FPIs) inflows.
According to Chief Executive Officer of Afrinvest West Africa Limited, Mr. Ike Chioke “When you compare Nigeria’s FDI flows in 2015 to Brazil, they recorded $261 billion of FDI flows. In 2016, because they reformed quickly, they went up to nearly $340 billion.”
Speaking to newsmen in Lagos at the launch of Afrinvest’s 2017 Nigerian Economic Outlook titled: “Reform or be Relegated”, Chioke stressed the need for the federal government to be bold and assertive in pushing for critical reforms in the country, so as to stimulate the Nigerian economic growth.
He said with the current state of the economy, if policy makers don’t push for critical reforms, Nigeria would be talking of a bigger problem than what we have now in the future.
His words: “Nigerians are very patient people. If they have a problem, instead of solving it, they go for palliative. I think the leadership needs to try to focus on how to solve problems in a holistic manner, otherwise we would be continuously relegated. People are talking about the ‘Giant of Africa,’ we are giant of nothing.”
According to him, investors in Africa are now increasingly showing more interest going to countries like Ghana, Kenya and Egypt.
“So, because these were markets that quickly reformed their currency, restructured their oil and gas sector, in other to attract long term capital, that immediately supported their economies and they have left the problems of 2014, far behind. But here we are in 2017, still suffering from the symptoms of 2014, when oil prices started going down and we started seeing the impact of shale production”, he added.
These, according to Chioke, are problems nations face when they refuse to reform major areas of the economy, but just skirt around the edges.
“See what is happening in the oil and gas sector, the Petroleum Industry Bill (PIB) has been floating around. Look at the Niger Delta militancy, it has been there for almost a decade. The combination of these issues means that we are looking at certain sectors for reforms. We need to carry out a major reform in the oil and gas sector”, he explained.
While calling on the federal government to take the mining sector out of the exclusive list, improve the ‘Ease of Doing Business,’ in the country, Chioke also advocated for favorable market friendly policies, especially with regards to the foreign exchange market.