By Saad Yushau Shuaib<\/p>\n
There is anxiety of the dwindling foreign direct investment in Nigeria
\ngoing by the recent statistics by the Nigeria Bureau of Statistics
\n(NBS).<\/p>\n
While a foreign direct investment (FDI) is an investment in the form of
\na controlling ownership in a business in one country by an entity based
\nin another country but it is distinguished from a foreign portfolio
\ninvestment by a notion of direct control. For a clarity, a foreign
\ninvestment is when a company invest in another country while Foreign
\nDirect Investment (FDI) is when a country owns 10 percent or more of a
\nforeign company, making it a wholly or partly foreign-owned.<\/p>\n
Over the years, FDI has become the most important source of external
\nresource inflows to developing countries. This investment pattern has
\nalso become a significant part of capital formation in these countries.
\nNigeria is one of the economies with great demand for goods and services
\nand has attracted some FDI over the years.<\/p>\n
FDI is assumed to benefit a developing country like Nigeria, not only by
\nsupplementing domestic investment but also in transfer of technology,
\nincrease in employment, development of human capital, access to
\nmanagement expertise, economic stimulation, skills, technology and other
\npositive externalities.<\/p>\n
The recent data released by NBS reveals how the investment inflows into
\nthe country have dropped significantly from $5.82bn to $5.36bn in the
\nsecond quarter of this year. This negative drawback represents about
\n7.78% in declination.<\/p>\n
It is sad to note that Nigeria now attracts less foreign investment than
\nGhana, a country with less population than Nigeria. By implication,
\nNigeria\u2019s economy can comfortably be said to be heading south as it is
\nclearly underperforming, despite a lot of resources spent by the
\ngovernment on foreign trips and tours to attract foreign capital
\ninvestment inflow.<\/p>\n
However, in spite of the economic advantages, Nigeria is seemed to
\nattract little or no FDI inflows into the country. Nigeria is blessed
\nwith enormous human and natural resources to make FDI comfortable, but
\nforeign investors are not coming in. Some of the reasons attributable to
\nthe negative economic trend include corruption, insecurity, multiple
\ntaxation, disobedient to the rule of law, and high-risk market for
\ninvestment.<\/p>\n
Concerns have also been raised by the head of investment research at
\nSigma Pensions Ltd, Mr Wale Okunrinboye, who said \u201cweak FDI inflows
\nsuggest the economy\u2019s low growth cycle will continue because there is
\nno other assured path to robust growth without attracting investment.\u201d<\/p>\n
Nigeria government can be advised to adapt to Rwanda foreign investment
\nstrategy used in 2017. The Rwanda FDI skyrocketed from 800 million
\ndollars in 2007 to 1.675 billion dollars in 2017 when the government
\nprovided conducive environment for foreign investors.<\/p>\n
According to Rwanda Development Board, three sectors that attracted the
\nmost investments were construction and real estate (638 million
\ndollars), followed by mining (267.3 million dollars) and lastly
\ninfrastructure (203 million dollars). All this comes to the case of
\nindustrial management in the nation.<\/p>\n
I strongly believe industrial management is the surest answer to our
\neconomic woes. Nigeria must look into other ICT industry and
\ndiversification into agriculture and mining rather than relying on crude
\noil for revenue. These sectors have high potentials to attract
\nsignificant foreign private investment inflow in the FDI.<\/p>\n
Governments can play an important role in promoting and developing its
\nnatural resources to encourage more investments in the country. Nigeria
\nneeds to juxtapose foreign investment with domestic investment in order
\nto maintain high levels of income and employment generation.<\/p>\n
For Nigeria to generate more foreign direct investment, efforts should
\nbe made at solving problems of government involvement in business,
\nrelatively closed economy, fight corruption, reform weak public
\ninstitutions and boost global reputation.<\/p>\n
Saad Yushau Shuaib
\nWuye District Abuja<\/p>\n","protected":false},"excerpt":{"rendered":"
By Saad Yushau Shuaib There is anxiety of the dwindling foreign direct investment in Nigeria going by the recent statistics by the Nigeria Bureau of Statistics (NBS). While a foreign…<\/p>\n","protected":false},"author":1,"featured_media":62745,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-70632","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-opinions"],"yoast_head":"\n