The African Development Bank (AfDB) has said that foreign direct investment inflows into Nigeria fell to $469 million in 2022 from about $8.8 billion in 2011.
Describing it as the lowest in a decade, AfDB’s Director General, Nigeria Country Department, Mr. Lamin Barrow, noted in Abuja that Nigeria’s private sector is hamstrung by policy inconsistencies and implicit taxation.
According to him, “many private sector firms in Nigeria are overburdened byimplicit taxes; they provide their own electricity, sink boreholes to get access to water, and repair roads in their towns and neighborhoods.”
Speaking on “Trade and Non-Oil: Changing the Narratives for Rapid National Development” at the 2023 Nigeria Employers’ Summit, Barrow said closer collaboration and dialogue between the Federal Government and the private sector is critical to policy making and position Nigeria as an ideal investment destination.
The AfDB chief said that a vibrant and competitive private sector can accelerate diversification of the economy and boost exports.
Over the years, successive administrations have mouthed economic diversification without matching it with action.
He said that the unification of the exchange ratemanagement system and the removal of fuel subsidies, has shown that the government was ready to engage in bold reforms that will transform the country into an economic powerhouse.
“If the Federal Government implements bold strategies to take advantage of investment and market access opportunities. Rising labor costs and technological upgrading in countries such as China, India, and Brazil offer an excellent opportunity to developing economies, including Nigeria, to attract FDI and diversify their exports,” he said.
Barrow further said that trade offers a great opportunity to further diversify the Nigerian economy.
According to him, with the coming into force of the African Continental Free Trade Area, Africa is becoming more integrated, with a larger market for exports from Nigeria.
“Developing regional infrastructure and putting in place the requisite trade policies are a necessary condition for tapping opportunities in the regional and international markets.
“A good starting point is the effective utilization of Trade Agreements to which Nigeria is currently a signatory. However, Nigeria’s trade policies should prioritize the promotion of value-added exports.
“The significance of the non-oil exports in driving inclusive growth, sustainable development job creation, especially for the women and youth, cannot be overemphasized,” Barrow explained.
