The Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, has said that Nigeria needs appropriate policies that will attract Foreign Direct Investment (FDI) into the country.
Chukwu in his presentation at a virtual workshop organised by the Capital Market Correspondents Association of Nigeria themed, “Addressing Nigeria’s Fiscal Challenges – Exploring Alternative Fund Approach”, said: “Our FDI which is what goes to the private sector and infrastructural development has in the last six years (2015-2020) neared flat.
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He noted that Nigeria recorded $1.44 trillion inflow of FDI in 2015 as against $1.028tr reported in 2020.
“It is a far cry compared to countries like Ghana whose receipts are two times what Nigeria realised and Egypt, which is seven times what we received. FDI is an important source of capital funding for a country like Nigeria. Nigeria needs to come out with appropriate policies that will attract FDI especially on foreign exchange,” he said.
He noted that for a less stable economy like Nigeria’s, assessment of social conflicts by potential investors will be a key consideration.
“On revenue, Chukwu said: “Nigeria has a huge revenue shortfall which means we have to look for funds outside government budget. Total revenue has remained largely flat between 2015 and 2020.”
On the outlook of the financial market, Chukwu said: “We sustain our positive outlook for the Nigerian bourse in 2021 as its overall positive performance in 2020, despite the effects of COVID-19 and the accompanying economic recession.
He however said rising inflation and foreign exchange rates could restrict consumer spending and squeeze company budgets, both of which could be counterproductive to the real sector.
