By NAOMI UZOR
FOREIGN Direct Investments, FDI, is crucial for the Nigerian economy, as it permits the transfer of technology and facilitates improvement in productivity, said Dr. Ademola Ajayi, the immediate past President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).
Speaking during the just ended 53rd annual conference of the association, tagged “Good Governance: Essential Ingredient for Attracting Foreign Direct Investments (FDI) in Nigeria”, Ajayi said: “FDI can help alleviate Nigeria’s widespread poverty by increasing per capita income and elevating overall standards of living towards the realization of the Transformation Agenda of the Federal Government .
“To do so, Nigeria must address all impediments to growth through extensive political and economic reform. For instance, there must be a dramatic and comprehensive restructuring of Nigeria’s economy through a greater diversification of the economy and also diversification of the FDI it receives.
“Up until now, Nigeria’s FDI inflows have been almost exclusively in the natural resources sector, specifically in the oil and natural gas industries.
“Obviously, such a concentration of FDI limits technology transfer and inhibits job creation, due to the capital-intensive nature of the extractive industry process. Nigeria should therefore endeavor to attract FDI in other sectors, including manufacturing, tourism, consumer products, and construction projects which would generate greater employment and create more balanced economic growth, provided of course that good governance practice, is seriously embraced,” he said.
He said the empirical results from studies confirm that complexity and the dynamic nature of a globalizing economy and economic prosperity is not a simple task because gradual progress is required for good governance, coordination and cooperation.
He stressed that Nigeria has emerged as a capable candidate for attracting FDI and has made great strides in the right direction thus far; the process is by no means adequate.