The Institute of Chartered Accountants of Nigeria (ICAN) has expressed concern over the decline in Foreign Direct Investments (FDIs) into the country.
The institute noted that despite the launch of the Presidential Enabling Business Environment Council (PEBEC) in 2016 and numerous presidential globetrotting in the name of searching for FDIs, Nigeria still recorded steep declines in FDIs inflow of 69 per cent and 44 per cent in the first and third quarters of 2023 respectively.
The 59th President of ICAN, Dr. Innocent Iweka Okwuosa, in a recent publication titled “ICAN Position Paper: Attracting Foreign Direct Investment,” pointed out that data from the Nigerian Bureau of Statistics (NBS) showed that “On a year-on-year comparison, there was a substantial 69 per cent decrease, as FDI fell from $155 million in Q1 2022 to a paltry $48 million in Q1 2023. In Q3, 2023, it was US$654.65 million, compared to US$1,159.67 million recorded in Q3, 2022, indicating a decline of about 44 per cent.
“The downward trend in FDI inflows highlighted above reflects the reality of the challenges that businesses face, which we suggest should be addressed by the present government if it will attract FDIs. To this end, we are of the view that these foreign trips will yield fruits, if these challenges, which are discussed below, are first addressed.”
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Okwuosa further stated that the spate of exits in the country’s industrial sector is becoming a trend since August 2023 when GSK announced its departure. The cessation of daily trip to Nigeria by some notable airlines and disinvestments by Truworths, Etisalat, ExxonMobil, Tiger Brands, HSBC, Woolworths, Shoprite, InterContinental Hotel Group, and many more companies were clear indications “That initiatives (like) PEBEC may not have created the ease of doing business that can attract and retain FDI, after all.”
He pointed out that the challenges in Nigeria’s business environment are multifaceted and included security concerns, infrastructural decay, regulatory constraints and policy inconsistency.
The ICAN boss, thus, called on the federal government to address the challenges that are constraining businesses in Nigeria in order to foster an environment that could attract and retain FDIs and arrest the downward trend in foreign investments inflow into the country.
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