Experts have emphasised the need for the government to work out modalities for accelerating infrastructure investment through bonds and other activities that stimulate long-term capital market fundraising. This, they claim, is to attract Foreign Direct Investment (FDI) and boost job creation in the country.
They also advocated for a concerted effort to diversify the country’s export base by promoting non-oil exports and increasing government fiscal resources to help the economy grow.
Stakeholders who spoke during a panel discussion at the recently concluded Chartered Institute of Stockbrokers (CIS) 2021 National Workshop in Abuja over the weekend stated that Nigeria currently requires FDIs to grow the real sector and stimulate infrastructure development across priority sectors.
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Infrastructure bonds are debt instruments that are used to fund government-sponsored infrastructure projects in a given country. Governments, government-authorized infrastructure companies, and non-banking financial companies issue them.
Opeyemi Agbaje, Executive Secretary/CEO of the Ogun State Security Trust Fund, argued that the Nigerian economy has not grown significantly since the 2016 recession, emphasizing the need for government and relevant stakeholders to implement policies that will attract investors.
More focus on diversifying the country’s trade exports and expanding the government revenue base, he claims, will attract investment, address the country’s lingering economic crisis, and create more wealth for the people.
Fiscal diversification, according to Agbaje, entails the expansion of government fiscal sources as well as the use of targeted government spending to stimulate broad economic transformation through investments in specific industries.
He claimed that the government had used the financial market to raise capital to close the budget gap, but that those investment vehicles were not tied to mortgage-backed securities, which would inject capital into the economy.
“The Nigerian economy has not grown by more than 2% since the 2017 recession; it has remained in negative territory, and this is becoming a pattern,” he said.
“I’m sure there’s something missing. We must identify and fill the institutional voices. On this less than 2% growth, we need to get more fundamental.”
Infrastructure development, increasing export capacity, job creation, and output are among the critical issues that need the government’s attention, according to Biodun Adedipe, an economist.
He claimed that if these three variables were rigorously measured on a regular basis, and incentives were deployed in a creative manner, the economy would turn around.
The current economic crisis, according to Adedipe, has raised the broader and more deep-rooted issue of resource dependence and volatility.
He identified non-oil export as a top priority for long-term economic development, noting that expanding this sector would help to relieve long-term pressure on the naira.
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As a result, he urged the government to implement policies that would increase non-oil revenue and exports.
Uche Orji, the Managing Director of the Nigerian Sovereign Investment Authority (NSIA), stated that without massive infrastructure investment, Nigeria’s economic development may be delayed.
He noted that FGN bonds account for 75% of the financial market, and that if those funds are not used for infrastructure development, Nigeria will not see a boost in job creation.
