Privatizing downstream petroleum, unlocking natural gas potential, and unlocking agribusiness and other business potential have been identified as the way forward to attract Foreign Direct Investment (FDI) into the country according to Dick Kramer, chairman Capital Alliance.
Achieving this will rightfully place Nigeria in the global top 12 to 15 ranking. “Our number 1 GDP position in Africa shows we can aspire to be in the top 15 global economies. We have all the vital ingredients – land, water, natural resources, location and, most importantly, people”, he said while presenting a paper on ‘Making Nigeria a Major Destination for FDI’ at the 2014 chartered Institute of Bankers of Nigeria (CIBN) investiture in Lagos.
He said the major way to attract FDI is to close all the gaps and earn the right to be in the top 15. Consequently, Government needs to get out of business and incentivize the private sector by implementing rules of the game that attract both FDI and local players.
The quantity and quality of FDI will be largely determined by the way Nigeria plans and implement for the long term, he said adding that specific rules of the game which it follows in practice can attract all the FDI it needs.
Kramer believes that Privatization carried out like telecoms and power would be highly attractive to the private sector generally and FDIs specifically. Both FDI and Nigerian private capital would come available and the drain on public finance would be stopped.
He was concerned that oil prices are in decline and there is no larger drain on finances than petrol subsidy (including kerosene). The benefits of subsidies to the overall economy are minimal.
Furthermore, he said if natural gas was privatized and prices made attractive to private investment, there would be a double benefit, such that power privatization would be enhanced significantly and both local gas based production and exports (including diesel fuel) would be stimulated significantly.
He acknowledged that Nigeria is blessed with land and water that can be better utilized at a time in history when global food demand is steadily increasing.
“Moreover, our large net food imports are an unneeded drain on the economy. Current progress should be continued and enhanced but a major public/private partnership should be fostered to develop a much more ambitious plan”, he said.
HOPE MOSES-ASHIKE
