Tuesday, May 19, 2020 07:50PM / Bukola Akinyele for WebTV / Header Image Credit: EcoGraphics
National interest must be factored into all the activities geared towards attracting Foreign Direct Investments (FDIs) into the country said the Chief Responsibility Officer (CRO) of Value Investing Limited, Mr. Seye Adetunmbi, while speaking as a guest on WebTV's Market Review Programme.
On attracting FDIs into Nigeria, Adetunmbi said there was a fundamental need for Nigeria as to seek outside financial support to plug its domestic funding gaps. H was of the view that with private funding flows from foreign sources the economy would see a faster-paced growth of gross domestic product (GDP).
He said, he was concerned about what would happen to the economy post COVID-19 as more businesses have started to close down or declare furloughs and wage cuts. He said it was important for the federal government to intervene in protecting distressed industries to save jobs and propel growth in both short and medium term.
On the issue of what needs to be done to develop fresh guidelines for FDIs and Portfolio investors, he was of the opinion that regulators like SEC, CBN and other regulatory agencies, need to review the laws to make them friendlier and attractive to capital importation by way of foreign fund inflows. Furthermore, he cited the 1972 indigenization decree which resulted in discouraging foreign investment inflows, and represented the classic example of a wrong policy riding on the back of good intentions.
Speaking further, he said the current situation was one in which all nations will witness contractions and job losses, which in turn would lead to losses of income . He, therefore, advocated that governments collaborate with technocrats to work out viable policy options to sustain growth despite prevailing economic headwinds.
Discussing the legislation needed to be adopted by the national assembly (NASS) to encourage foreign investment inflows, he said there was an existing law which allowed investors to own 100% of the companies which invest in the country. He suggested that this piece of legislation might require a review.
According to Adetunmbi, there are attractive opportunities for foreign direct investment in Nigeria but the country needs to look at how it can structure foreign investment in a manner that would equally empower local investors. He was of the view that the government must protect the local investor and it should involve strategic incentives that would make them overcome the challenge created by the COVID-19 pandemic.
Speaking on Strategies that will anchor and drive FDI in a way that would see more project execution, Adetunmbi believed, Nigeria needs to acknowledge the challenges that are on ground. He proposed that the federal government took a keen look at national interest in terms of long-term outlook.