The Nigerian Economic Summit Group(NESG)says the ongoing geud between Kogi State Government and Dangote Cement Plc constitute serious threat to investment in Nigeria.
The group also said the dispute is unwarranted and may spur both domestic and foreign investors to halt investment in the land.
Mr. Asue Ighodalo, Chairman, Board of Directors of NESG, who conveyed the group’s displeasure in a statement that the recent dispute between Kogi State and Dangote Cement Plc as well as action taken by the state government gives erroneous impression that such a commercial dispute cannot be amicably settled using the existing dispute resolution mechanisms.
He warned that the inability as a nation to give the right signalling to investors will lead to subdued investment flows and capital flight which has a number of consequences,including inability to sustain the growth and development of the non-oil sector which is expected to reign in needed revenues to finance the 2023 budget and remain so for the next foreseeable future.
It will also cause dip in foreign exchange earnings through limited capital inflows will lead to continued devaluation of the Naira as well as underdevelopment of the financial and capital market with very limited financial instruments and investable assets,he said
He added:”The lack of investor confidence also implies that the cost of borrowing for both the government and corporates will increase. Furthermore, the Nigerian government will be under pressure to service its debt and this could either constrain future budget non-debt expenditures or result in more borrowing”
Ighodalo lamented that Nigeria has experienced low foreign investors’ confidence arising from a number of issues ranging from insecurity, foreign exchange scarcity, entrenched capital controls and an unfriendly business environment.
He said in spite of these challenges, Nigerian entrepreneurs have continued to exhibit faith in the economy by investing in the country.
He noted that President Muhammadu Buhari, recently submitted the 2023 Appropriation Bill to the National Assembly, adding that “budget which shows a huge deficit, that relies on the country’s ability to attract and mobilize both foreign and domestic capital in Nigeria.
He added:”It is important to note that the Nigerian delegation to the ongoing Annual meetings of the World Bank/International Monetary Fund would be expected to seek some support and attract the much-needed foreign investments into the country. This is in addition to what the private sector is doing towards mobilizing foreign investments.
“This therefore re-enforces the need for the Nigerian government to ensure that the signalling to both foreign and domestic investors is not only right but friendly and appropriate to attract investments into the country”
He said that following the constrained fiscal space faced by the Nigerian government, that investment in critical sectors is what will drive economic recovery and sustain the growth momentum in the medium term.
He acknowledged the effort of the government towards improving the business environment, adding that there is room for improvement.
He added:”Thus, it is imperative for both the federal and state governments to work together towards ensuring improved ease of doing business and good governance practices.There is no better time to build investor’s confidence than now. We, therefore, admonish His Excellency, Mr President to ensure that the right signalling and conducive business environment are provided to attract both foreign and domestic investment”
