Nigeria’s quest to attract foreign investment inflow may continue to be a mirage unless contractual obligations and agreements are respected by the government, Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industries, LCCI said.
Speaking at the Vanguard Economic Discourse, held in Lagos last weekend, Yusuf said that the history of compliance to contractual agreement especially from government, is not a good story and infractions incurred by the government discourage investors.
“I will like to stress the importance of respect for contractual obligations or agreements. This economy needs a lot of private capital, either foreign or domestic, especially in the infrastructure space. The history of compliance to contractual agreement especially from government is not a good story. We have had issues. How successful is the PPP (public-private partnership) arrangement in the country?
“We had the concession on Lekki – Epe road, which did not work as expected. We had the Lagos – Ibadan expressway concession. We had the MM2. There were issues in all, even the NLNG. Only recently the NLNG Act was amended and some clauses were inserted, which were not there initially.
‘‘All these things have a way of discouraging flow of foreign investments. We need to build some confidence in that regard so as to augment whatever government has in terms of finance,” he said.
Speaking further, Yusuf said ‘‘We also need to worry about our institutions. Institutions are very critical for the quality of policies that are formulated. They are very critical for the quality of implementation.
Yusuf also expressed concern over what he sees as failure in the financial intermediation in the banking system in the country.
He stated: ‘‘The essence of banking is to ensure the mobilisation of resources from the surplus end of the economy to the deficit end of the economy. But what you find in the Nigerian economy is that there is so much deficit in terms of funding the SMEs, the manufacturing space, the property market, the infrastructure space etc.
‘‘At the end, it is so difficult to get the surplus fund from the banking system to flow to that space. That is the major challenge that we need to fix so that we can get the banking sector to be more supportive of the economy.