THE Nigeria Economic Summit Group, NESG, yesterday expressed concerns over investors’ lack of confidence on the economy. In a statement signed by Asue Ighodalo for the Board of Directors, NESG pointed out that the Appropriation Bill submitted by President Muhammadu Buhari to the National assembly showed a huge deficit, adding that it limits the country’s ability to attract and mobilise both foreign and domestic capital.
The statement read: “In recent times, Nigeria has experienced low foreign investors’ confidence arising from a number of issues, ranging from insecurity, foreign exchange scarcity, entrenched capital controls and an unfriendly business environment.
“In spite of these challenges, Nigerian entrepreneurs have continued to exhibit faith in the economy by investing in the country. All hands should be on deck to ensure investors are not frustrated.
“The President recently submitted the 2023 Appropriation Bill to the National assembly. This budget, which shows a huge deficit which limits the country’s ability to attract and mobilise both foreign and domestic capital.
“It is important to note that the Nigerian delegation to the ongoing annual meetings of the World Bank/International Monetary Fund would be expected to seek some support and attract the much-needed foreign investments into the country. This is in addition to what the private sector is doing towards mobilising foreign investments.
”This, therefore, re-enforces the need for the Nigerian government to ensure that the signal to both foreign and domestic investors is not only right but friendly and appropriate to attract investments into the country.”
NESG also noted the dispute between Kogi State government and Dangote Cement Plc, asserting that it was capable of sending wrong signal to investors.
“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. This sends inappropriate signals to investors.
“Our inability as a nation to give investors the right signals will lead to subdued investment flows and capital flight which have a number of consequences, hamper our ability to sustain the growth and development of the non-oil sector, which is expected to rein 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 continued devaluation of the naira.
“Wrong signals will further lead to the underdevelopment of the financial and capital market with very limited financial instruments and investable assets; and the lack of investor confidence also implies that the cost of borrowing for both the government and corporates will increase.
”Furthermore, the Nigerian government will be under pressure to service its debt and this could either constrain future budget non-debt expenditures or result in more borrowing. Both options would only heighten the risk of a depressed economy with rising unemployment and poverty rates.”
The group counselled the Buhari administration on investment in critical sectors since it would drive economic recovery and sustain the growth momentum in the medium term.
It also called on the government, based on constrained fiscal space, to concentrate on investment, both local and foreign, which is often associated with job creation, technical knowhow, technology, economic growth and the strive towards efficiency.
“We recognise the effort of the government towards improving the business environment. Nevertheless, there is room for improvement. Thus, it is imperative for both the federal and state governments to work together towards ensuring improved ease of doing business and good governance practices.
“There is no better time to build investors’ confidence than now. We, therefore, admonish the President to ensure that the right signals and conducive business environment are provided to attract both foreign and domestic investment,” NESG added.