Radical policies needed to reverse decline in FDI – NIPC Boss

By Ihesiulo Grace

22 December 2020

News

Philip Clement, Abuja

The Nigerian Investment Promotion Commission stated that the country requiresbold and coherent policy changes as well as well cut out reforms to reverse the drop 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.

Also speaking, the NIPC Director of Investment Promotion, Mr Adeshina Emmanuel made a presentation on the recently launched One Stop Investment Platform for Renewable Energy and Energy Efficiency (OSIP RE/EE).

According to him, OSIP RE/EE was developed within the framework of the Nigerian Energy Support Programme (NESP II), a technical assistance programme, co-funded by the EU and the German Government and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in collaboration with Federal Government of Nigeria.

“The platform is a digital platform that will provide easy access to relevant information for investments in renewable energy and energy efficiency in Nigeria. Built with the cooperation of public, private and financial sector partners, the platform will provide technical, regulatory, and economic information aimed at de-risking projects and scaling up investments in the sector and would be manned by NIPC in collaboration with the Rural Electrification Agency and the Federal Ministry of Power.

“The OSIP includes an overview section about the Nigerian renewable energy and energy efficiency sector and investment opportunities. Furthermore, the platform includes a networking tool for investors to interact with public and private stakeholders and an energy efficiency calculator for commercial and residential buildings and industries,” he added.