…As 49 African countries sign AfCFTA’s agreement***
Between January 2015 and December 2018, the Nigerian economy attracted a total investment of $43.81bn, investigations have revealed.
Based on the official N305 to a dollar exchange rate of the Central Bank of Nigeria, the $43.81bn translates into about N13.36tn.
Documents of the country’s investment inflows obtained from
the National Bureau of Statistics revealed that the investment came from three
main sources.
They were Foreign Direct Investments made up of equity and
other capital; Portfolio investment which comprised equity, bond and money
market instruments; and other investments which were made up of trade credits,
loans, currency deposit and other claims.
Further analysis of the report showed that Nigeria’s foreign
exchange policy, the Economic Recovery and Growth Plan and the economic
recession witnessed in 2016 largely shaped capital importation over the period.
For instance, investigations showed that prior to the
economic recession of 2015, the level of investment inflows was at an upward
trajectory.
However, at the onset of the economic crisis few months
after the inauguration of President Muhammadu Buhari, findings showed that
investment inflow recorded a sharp decline to almost half of the 2014 value of
$20.76bn dropping to $9.65bn in 2015.
Further analysis of the report revealed that in 2016, the
value of investment inflow remained depressed, decreasing by $4.55bn from
$9.65bn in 2015 to $5.1bn.
It, however, noted that a recovery began in 2017, as
investors raised their stake by $7.1bn to $12.2bn.
In the 2018 fiscal period, the country attracted about
$16.81bn investment, the NBS data showed.
In 2018, the largest amount of investment inflow by type was
received through portfolio investment, which accounted for $11.8bn or 70.20 per
cent.
This was followed by other investment, which accounted for
$3.81bn or 22.69 per cent of total capital, while Foreign Direct Investment had
$1.19bn or 7.11 per cent of total capital imported in 2018.
In terms of destination, the report stated that the United
Kingdom emerged as the top source of capital investment in Nigeria in 2018 with
$6bn. This, it noted, accounted for 35.74 per cent of the total capital inflow
in 2018.
This was followed by the United States with $3.57bn;
South Africa, $1.15bn; the United Arab Emirates, $937.19m; Belgium,
$886.08m; and Singapore, $780.87m.
Others were Ghana, $626.44m; Mauritius, $560.87m; The
Netherlands, $373.08m; and Switzerland, $355.98m.
The Executive Secretary, Nigeria Investment Promotion
Commission, Yewande Sadiku, had said that the government was committed to
attracting fresh investments in key sectors of the economy.
Sadiku said the commission now had a seamless collaboration
with the states to enable it to monitor closely investments inflow into the
country, as a one-stop centre.
She said the commission was working with key stakeholders to
see more Nigerians invest in the country, adding that the current efforts of
the NIPC in working more closely with the states was to increase the level of
investment inflow into the country and to ensure seamless collaboration and
proper tracking.
She said, “We are interested in seeing more Nigerians invest
in the country, and we have a Domestic Direct Investment model now in the
commission and we are working with the National Bureau of Statistics to track
investments inflow into the country.”
“The current efforts of the NIPC in working more closely
with the states is to increase the level of investment inflow into the country,
and to ensure seamless collaboration and proper tracking.
In the meantime, at
least 49 out of the 55 African Union (AU) member states have signed the
Continental Free Trade Area (AfCFTA) agreement.
AfCFTA is designed to create a single continental market for
goods and services, with free movement of business persons and investments and
acceleration of the establishment of the Customs Union.
According to a statement by the group, it is also expected
to expand intra-African trade through better harmonisation and coordination of
trade liberalisation, facilitate instruments across the regional economic
communities and across the continent, enhance industrial competitiveness and
utilise opportunities for scale production, continental market access and
better resource reallocation.
It was presented for signature, along with the Kigali
Declaration and the Protocol to the Treaty Establishing the African Economic
Community relating to the free movement of persons in Kigali on March 17-21,
last year. During this time, an action plan on Boosting Intra-Africa Trade
(BIAT), with seven priority action clusters: trade policy, trade facilitation,
productive capacity, trade-related infrastructure, trade finance, trade
information and factor market integration, was also approved. Yet, only 12
countries have ratified it-Ghana, Kenya, Rwanda, Niger, Chad, Guinea, eSwatini,
Uganda, Ivory Coast (Côte d’Ivoire) and most recently, South Africa, Mauritania
and Republic of Congo – and an additional six countries have received
parliamentary approval for ratification – namely Sierra Leone, Mali, Namibia,
Senegal, Togo and Djibouti.
All ratifications (approved and deposited) now stand at 18.
We have given this background to show the progress of ratification and
according to AfCFTA agreement, 22 of the signatory states are needed for it to
come into force. Once into force, it will be the largest in the world in terms
of participating countries since the formation of the World Trade Organisation
(WTO). It is also estimated to boost intra-African trade by 52.3 per cent by
eliminating import duties and doubling trade if non-tariff barriers are also
reduced.
If all AU member states ratify AfCFTA, they will certainly broaden their national economic horizons and strengthen their regional groupings. We may say that, a new venture is studied first before it is implemented to avoid untoward eventualities and perhaps that is why only 12 AU member states have so far ratified it. Let’s give those countries that have not ratified AfCFTA more time to study and ratify it only when they are ready to do so. We shouldn’t rush to sign and ratify AfCFTA, but let’s first engage in soul-searching and only ratify it after we are sure of its benefits for both the African continent and national economies.
Punch with additional report from The Nation
