Economic and financial experts on Monday called on the Federal Government to rekindle confidence in the economy to lure back investments into the country, which have taken a serious beating from the ongoing recession.
The experts, who spoke in separate interviews with our correspondents, said the government should further reduce the amount budgeted for recurrent expenditure in order to free up more funds for capital projects in the 2017 fiscal period.
According to them, one of the viable ways to stimulate the real sector is to invest more in infrastructure such as rail, road and power.
A professor of Political Economy and management expert, Pat Utomi, said, “The first problem with the economy is that there is a loss of confidence in it by the business community, foreign investors, and Nigerians in general.”
He stated that the first thing to do must be to rekindle confidence in the general policy direction, highlighting the need to establish some very clear purpose and show passionate commitment to driving things in that direction.
Utomi said communication must be first-class to get the buy-in of all stakeholders, adding, “Secondly, you have to show leadership. One of the biggest problems is that we have not seen leadership.”
According to him, leadership means having a clear vision, identifying the key stakeholders and getting everybody to feel ownership of that vision and how to go towards it.
He said, “The next thing is to have sensible policies. Anybody who really seriously looks at the core thrust of the government, which says we are fighting corruption, and you look at the policies, whether they are around foreign exchange or whatever with so many different exchange rates, you cannot associate fighting corruption with those policies, because there have been more corruption in Nigeria in the last six months than in the last 10 years from just the foreign exchange policy.
“And it is very simple; you don’t have to be a genius to know it. If you are a manufacturer and they say, ‘We will give you dollar at this price’, and you know that after you produce everything in the world, you will not make one-tenth of the profit you will make if you just sell in naira to some other persons. The temptation to do that is very high and I can assure you there are many people who have responded to that temptation.”
A former Managing Director, Nigeria Deposit Insurance Corporation, Mr. Ganiyu Ogunleye, stated that the Federal Government should resolve the challenges facing the foreign exchange market in order to attract fresh foreign direct investments into the economy.
He said with fresh investment inflow into the country, the objectives of job creation and poverty reduction would be speedily achieved.
Ogunleye lamented that with the country having about five exchange rates, it would be difficult for the government to attract foreign investors into key sectors of the economy.
He said the government should focus on creating an enabling environment that would encourage foreign investors.
The former NDIC boss said, “The actions should also demonstrate that they are encouraging people to come. The currency exchange policy that we have now cannot give confidence to investors.
“When you have four or five exchange rates in an economy, it can only create opportunities for some people to cut corners, and it will be difficult for foreign investors who bring money here to repatriate it because they are not certain of the rates that are applicable.”
He added, “There is a lot of uncertainty and unless we create an enabling environment that will give people confidence, no matter what sermon we are preaching, nobody will come.
“There is also a need to reduce the overhead cost of governance to free funds for capital projects, because this is what we need to effectively diversify the economy and stimulate activities in the real sector.”
A former Managing Director, Unity Bank Plc, Mr. Rislanudeen Mohammed, said the foreign exchange market should be managed in an efficient and transparent manner in order to attract fresh capital inflows.
He said, “Government should focus more on growth, income-enhancing and employment-generating areas to reflate the economy and get it out of recession and stagflation.
“There is also the need for improved investor confidence by improved transparency in the foreign exchange market, thereby bolstering liquidity and eliminating the current speculation and distortions in the market.”
Mohammed also stressed the need to align fiscal, monetary and trade policies.
Also speaking, the Registrar, Chartered Institute of Finance and Control of Nigeria, Mr. Godwin Eohoi, decried the high interest rates in the country, saying it would be difficult to borrow funds from banks for the purpose of investment.
He said, “The 2017 budget has been well formulated to take the country out of recession and this is a step in the right direction for this year. But what we need now is better monitoring and evaluation of the budget, particularly in the area of capital projects.
“The foreign exchange market should be properly managed to ensure that funds are made available to key sectors of the economy, rather than using it to fund consumption, which is causing unemployment in the country.”
