‘FG must prioritise private capital inflow to meet $1 trillion GDP target’

THE Nigerian government’s target of a $1 trillion economy by 2026 could only be realised with more inflow from private capital investments, said the former managing director of Nigeria Inter-bank Settlement System Plc (NIBSS), Paul Lawal.

Lawal also suggested that if well harnessed, diasporan remittance of over $20 billion would play a significant role in the projected $1 trillion GDP target.

The former NIBSS boss said these in a monitored business programme, “Global Business Report,” on Arise Television on Wednesday, January 10.

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He also urged the government to address concerns about the exit of multinationals from Nigeria’s manufacturing sector.

“An economy becomes strong when more people desire to invest in your country. In my opinion, there should be a strong effort to facilitate private capital into the economy,” he said.

President Bola Tinubu had set the target of growing the Nigerian economy to $1 trillion by 2026 and increasing it to $3 trillion by the end of the decade in 2030.

He disclosed this while delivering his opening address at the recent 29th edition of the Nigeria Economic Summit held in the nation’s capital, Abuja.

“Distinguished ladies and gentlemen, a $1 trillion economy is possible by 2026, and a $3 trillion economy is possible within this decade. We can do it.

“We’ve done double-digit inclusive and sustainable competitive growth. This is our agenda, and I’d like to charge you, the captains of industry here present, to commit yourselves to and redouble your effort to our vision of a renewed hope, “Tinubu added.

The $1 trillion target has elicited mixed reactions from industry stakeholders concerned about the Nigerian economy’s current status.

The recent exit of notable companies such as Procter and Gamble(P&G) and GlaxoSmithKline (GSK) on foreign exchange inflow concerns had raised many unanswered questions about reaching the $1 trillion economy target.

In August, GlaxoSmithKline, a healthcare company, announced it would exit the country after 51 years of operations.

The following month, PZ Cussons Nigeria, a consumer goods company, announced plans to delist from the Nigerian Stock Exchange.

In October, Guinness Nigeria, an alcoholic beverage maker, said it would stop importing and distributing certain Diageo international premium spirits effective April 2024.

In November 2023, some companies revealed that they were shutting down their food delivery service in the country starting December 7, 2023.

Sanofi, a French pharmaceutical firm, said it had begun to plan its exit from Nigeria and appointed a third-party distributor to handle its commercial portfolio of medicines from February 2024.

Equinor, a Norwegian energy company, announced the sale of its Nigerian business, including its share in the Agbami oil field, to Nigerian-owned Chappal Energies. The transaction marked the end of Equinor’s three-decade presence in Nigeria.

In the second half of 2023, at least five multinationals announced plans to exit Nigeria.

The exit of these companies came at a time when foreign investment inflows in Africa’s biggest economy were at their lowest in 27 months.



    Experts believe these decisions would most likely reduce foreign investment inflows and affect the country’s $1 trillion economy target.

    According to data from the National Bureau of Statistics (NBS), investments declined by 33 per cent to $1.03 billion in the second quarter of 2023 from $1.54 billion recorded in the same period in 2022.

    The United Nations Conference on Trade and Development also revealed that foreign direct investment inflows into Nigeria turned negative (-$187 million) last year for the first time in at least 33 years.

    “You can’t grow a one trillion-dollar economy without a good and strong manufacturing sector. When you don’t have this, it is just a pipe dream to achieve that economy,” Ayorinde Akinloye, a Lagos-based investor relations analyst, said.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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