Thursday, June 21, 2018 5.00pm / Proshare WebTV
As Nigeria seeks to achieve economic recovery and stability, it must give top priority to managing its liquidity.
Notable economist Dr. Ayo Teriba shared this at the second edition of the one-day Nigeria economic outlook forum in Lagos.
Dr Teriba asserted that Nigeria had three major challenges namely; low government revenue, lack of infrastructure, and low finance for the private sector.
To address the aforementioned challenges the economist made a strong case for unlocking liquidity, through the cornering of foreign capital inflows.
He said “Compared to many countries, Nigeria has more headroom for investments which can be explored effectively”.
Speaking further Teriba noted that for a country like Nigeria, whose economy is the largest in Africa, private investments in infrastructure was vital to driving economic activities. This in his words mean “Government in Nigeria must break its monopoly in key sectors, to attract real-time private investments”.
The economist listed India, Saudi Arabia, United and Arab Emirates as countries that were lagging behind Nigeria in 80’s in FDI, but have now overtaken her because of strategic investment policies.
Dr Teriba tasked Nigeria to learn from Saudi Arabia who have rolled out a massive $200bn privatization plan, focusing on 16 sectors and assets, to attract capital and boost liquidity.
According to him “Nigeria should explore converting key assets to liquidity, that will build buffers, finance its economic recovery and enhance autonomy for the Central Bank of Nigeria”.
Looking at the current economic approach of the Federal Government, he asserted that the strategy of debt, exports and tax revenue to boost the economy, was low compared to the impact of attracting foreign direct investments (FDIs) and optimizing equity.
From the global economic perspective, the CEO of Economic Associates, the current global liquidity glut creates an opportunity for Nigeria to rejig its investment policy to address its liquidity issues.
In his recommendation he called for a more bullish approach in privatization plan, with a wholesome amount in the range of $100bn that will boost foreign direct investments in the economy.
He reminded stakeholders that with the success recorded in the privatization of the telecommunications sector in 2001, Nigeria has a greater outcome in pushing for FDI that can unlock economic opportunities and drive liquidity.
With liquidity the economist believed Nigeria will be able to build financial buffers, that can insulate the country from external shocks.