Nigeria’s FDI has been struggling, according to a report from Proshare , a leading niche financial information service key focus on markets, business, technology regulation and the economy. in a period when a number of countries in Africa enjoyed an exponential increase in capital investments, Nigeria reached a mediocre $981mn in 2017, a far cry from its previous peak of $5bn in 2008.
While the partial market-oriented change to the exchange rate regime in 2016 encouraged the minor 2017 peak, an array of other fundamental problems such as prolonged insecurity, a poor investment climate and a significant infrastructure deficit, still make the country appear highly risky to long-term investors.
In the face of these challenges, Esosa Johnson-Omoregbe, an expert in FDI matters finds that Nigeria could do a lot more with FDI’s if it provides the necessary protection and encouragement: “Not much been done to encourage FDIs in Nigeria, he says. “The approach to seeking investors has always been one of ‘body language. And there is a strong lack of policies that addresses the notorious bureaucratic bottlenecks– across Nigeria’s parastatals and other branches of government– all of which are inimical to the sustenance of FDI’s in Nigeria”, he noted.
“Our intentional undercutting of FDI in Nigeria did not begin with this government or even the last one. When billionaire Richard Branson launched Virgin Nigeria in 2005 , he was lauded by the then-government for launching a airline company. By 2008, he accused Nigerian officials of ‘mafioso’ style tactics and we all watched the ignominious pull out and subsequent loss of a Virgin national carrier. Within the ambit of government imposed fine, MTN suffered a harsh penalty in 2016 when a hefty $1bn fine was slammed on the telco over unregistered sims.
“Smarting out of that, the telco has again been issued a $8.1 billion demand over concerns around repatriation of funds. The UAE-based environmental utility group, Visionscape is currently in the eye of a socio-political storm”. He states further that countries like the United States of America and parts of Europe provide strong protection for foreign and domestic investors.
This is why for decades, the US has remained the number one destination for FDI, followed closely by the United Kingdom and China. “Both Brazil and India also have top 10 positions due to active reforms that encourage FDI. This where Nigeria needs to do more and the legislature and judiciary have a critical role to play”.