Obajana Standoff: Kogi sending a bad signal to investors – NESG

The Nigerian Economic Summit Group (NESG) has faulted the action of the Kogi State Government against Dangote Cement PLC, saying it has sent a bad signal to both foreign and local investors.

NESG in a statement signed by Asue Ighodalo on behalf of the Board of Directors, said this crisis could result in increase in Nigeria’s risk rating.

It said the action taken by the Kogi State government gives the impression that such a commercial dispute cannot be amicably settled using the existing dispute resolution mechanisms.

“The recent dispute between Kogi State and Dangote Cement Plc and the action taken by the State Government gives the impression that such a commercial dispute cannot be amicably settled using the existing dispute resolution mechanisms.”

“Such action sends inappropriate signals to investors, both domestic & foreign, and could result in an increase in our country risk rating.

“Our inability as a Nation to give the right signalling to investors will lead to subdued investment flows and capital flight which has a number of consequences”, the statement said.

ESG said the ongoing crisis may “hamper our ability to sustain the growth and development of the non-oil sector which is expected to reign in needed revenues to finance the 2023 budget and remain so for the next foreseeable future;

“The expected investment into the oil sector of which the full implementation of the newly passed Petroleum Industry Act is expected to attract, for which the government has taken a number of steps, may be jeopardised;

“Dwindling foreign exchange earnings through limited capital inflows will lead to the continued devaluation of the Naira;

“Wrong signalling will further lead to the nderdevelopment of the financial and capital market with very limited financial instruments and investable assets;foreign exchange scarcity, entrenched capital controls and an unfriendly business environment.”