The Nigerian Economic Summit Group, a private sector think-tank and policy advocacy group, has said clarity on the nation’s foreign exchange policy is necessary to lure back foreign portfolio investors into the country.
The Chairman of the Board, NESG, Mr. Kyari Bukar, stated this at a press briefing after the group’s 21st Annual General Meeting in Lagos.
“It is the lack of clarity on the foreign exchange policy that is making them (foreign investors) stay on the sidelines,” he said.
He said with the beginning of the convergence, the country might get to a point where it would become easier for foreign investment to come in.
Bukar said, “If they see that clarity, they will begin to bring in their money. With the foreign portfolio investors, there has to be absolute clarity in the sense that they can easily come in and go out at a market-determined rate rather than a rate that someone sets and could change overnight.
“The clarity is not emerging; there is an encouraging sign but the clarity is still not out there.”
Speaking about the group’s annual report and accounts for the year ended December 31, 2016, the chairman said the NESG experienced improved performance on its activities and revenue from membership in 2016.
He said on the financial side, revenue from membership dues increased by 19.2 per cent to N160.5m in 2016 from N134.6m in 2015, while net income declined by 23.5 per cent to N119.3m from N155.9m in 2015.
Bukar said, “2016 was a tough year for Nigeria. All major economic indicators performed woefully during the year. The economy experienced a negative growth of 1.5 per cent.”
He said the business environment encountered shocks arising majorly from the foreign exchange crisis, which had severe impact on operating cost, inflation and overall output.
He stated that the inability of the government to respond swiftly and appropriately to the economic challenges worsened the situation.
“For instance, the delayed passage of the 2016 budget and cloudy policy direction increased the level of uncertainty in the business environment. This also resulted in a decline in foreign direct investments, which closed below $1bn in the year,” Bukar said.
The NESG forecast that the Nigerian economy will experience a Gross Domestic Product growth rate of 0.6 per cent in 2017, according to him.
Bukar said, “This means economic activities will improve in the year. As stated in our macroeconomic outlook for 2017, we believe that any economic recovery achieved outside the scope of supporting the productive base of the economy will not be sustainable.
“Nigeria, therefore, must realise that looking inwards remains the sustainable way to create jobs and enhance foreign exchange earnings through the increase in net-exports.”
The Chief Executive Officer, NESG, Mr. ‘Laoye Jaiyeola, reiterated the NESG’s commitment to remain at the forefront of advocacy and intervention on all issues regarding the adoption of policies conducive for good governance and sustainable private sector-led economic development in 2017.