Towards investment promotion

The Nigerian Investment Promotion Commission (NIPC) recently made public a proposed strategic investment master plan, tagged the Nigerian Investment Promotion Master Plan, to bridge the country’s huge infrastructural funding gap.

Under the strategic plan, the NIPC says it will collaborate with relevant agencies and stakeholders to enthrone a new regime of investment-friendly policies potent enough to attract new investors to the economy and also sustain the interests of the existing ones. The goal is to drive the implementation of the various strategic master plans across critical sectors of the Nigerian economy designed to address the sector-specific funding gaps.

This is a positive development, in our view. “Nigeria needs over $2.8 trillion infrastructure funding over the next 30 years, whereas the estimated budgetary provision will be about $45 billion. This leaves a huge shortfall of about $2.4 trillion,” according to Saratu Umar, executive secretary/chief executive officer of the commission.

Nigeria, no doubt, needs both local and foreign investments to achieve inclusive and sustainable economic growth and development. It is estimated that the country receives an average of $7.5 billion Foreign Direct Investment (FDI) yearly. If this is constant over the next 30 years, that would mean an FDI of $223 billion, leaving a huge gap to the infrastructure investment requirement. This is why we support any strategy that will guarantee a sustainable increase in investment inflow into the country.

Indeed, FDI is widely acknowledged worldwide as the most useful and cheapest source of development finance because it creates employment, engenders transfer of technology, conserves foreign reserves, and ensures availability of quality goods and services. For this reason, the competition for FDI has been very stiff, particularly in recent years, due to globalisation brought about by technology.

But for an economy to attract productive, sustainable local and foreign investment, a stable investment climate along with a supportive policy framework is an absolute necessity. One of the strategies adopted by most countries to attract FDI, therefore, is the establishment of investment promotion agencies (IPAs), with over 170 of these worldwide competing to attract often limited FDI to their various countries. These government-owned or mandated IPAs have an important role to play in marketing the country and its particular investment opportunities to potential investors.

This is why we support the measures outlined by the NIPC. Umar said in a recent media chat that the commission was streamlining investment procedures in order to remove all bottlenecks in business legalisation procedures, among other ongoing critical reforms. She added that NIPC was reviewing its strategy with respect to partnerships, image, investment targeting, client servicing, among others, in a coordinated fashion that facilitates steady and sustainable growth of FDI in Nigeria.

As part of the strategies, NIPC said it has set up an investment coordination framework to improve the business climate, improve the ease of doing business and ensure policy consistency to enhance investors’ confidence in the Nigerian economy. This is in addition to developing a structured and result-driven investment promotion calendar and certification of private organisations engaging in investment promotion activities.

We commend these ongoing efforts towards promoting the country’s hugely untapped investment opportunities to both local and global investors. However, we must harp on the need to ensure effective implementation of the initiative in order to bridge the infrastructure funding gap to a sustainable basis. As analysts have often observed, Nigeria is not lacking in good initiatives; the challenge is always at the implementation level. Let pious pronouncements, therefore, be backed with positive actions.