Nigerian Economist Ayo Teriba Advises FG to Liberalize the Services Sector


Thursday, June 24, 2021 / 3.00PM / Ottoabasi Abasiekong/Header Image Credit: WebTV


The Federal Government of Nigeria has been tasked to liberalize the country's service sector to enable it attract large scale foreign direct investments (FDIs). Dr Ayo Teriba, an economist and public policy specialist, made this point at the Economic Associates One-Day quarterly conference,  that dwelled on developments in the Nigerian economy and the economic outlook for the country in 2021 and beyond.


According to Teriba it was time for Nigeria to learn from emerging economies like Brazil and India, by opening up critical service sector areas like power ( especially transmission), petroleum services (the pipelines), and the railways system (transportation) to unlock hitherto dormant economic opportunities.


He believed that it was time for the country to compile a list of all national assets through the creation of an asset Registry that would provide the primary data base for the creation of a national deal room for prospective foreign and local investors.


Teriba noted that this would require Nigeria to leverage the capital market to privatize state-owned enterprises (SOEs) and assets which would help in determining the tradable market value of such assets.


The economist cited the example of Saudi Arabia that liberalized its State-owned oil company 'Saudi Aramco'  through the capital market, and established a market value of over $1trn for the Saudi-owned international oil major.


He acknowledged that the world had shifted to the "Age of Deal Making",  stressing the need for the both federal and state governments to create the environment for increased local deal counts.


Speaking further, Teriba decried the fact that Nigeria had no single entity that had been listed in its capital market, which would assist in unlocking liquidity.


With added liquidity by way of foreign investment inflows, Nigeria would find it easier to fund infrastructure projects, invest in human capital development, and transform city centers and improve national security.


The financial economist added that "Nigeria needs to take the bold step of connecting its local assets to global liquidity, because liquidity leads to stability and stability would drive growth".


He emphasized the need for Nigeria to think more strategically about encouraging foreign direct investments (FDIs) and provide an enabling environment for improving the size of diaspora remittances.


Taking a look at public policy Teriba emphasized the need for the harmonization of fiscal, monetary and financial market policies to achieve a robust liberalization and privatization process that would increase revenue, support larger fiscal buffers and ensure greater economic resilience. He noted that this was a strategy adopted by China in 2008 that enabled it withstand the headwinds of the global economic meltdown prompted  by a decline in housing asset values and the consequences of overleveraging which where spurred by large margin trading positions by over optimistic financial and mortgage dealers. 

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