The Institute of Chartered Accountants of Nigeria (ICAN) has voiced serious concerns about Nigeria’s dwindling Foreign Direct Investments (FDIs). This troubling trend is attributed to various challenges in the country’s business environment, including issues related to security, decaying infrastructure, corruption, and inconsistent policies.
ICAN’s analysis points to a significant gap in essential infrastructures like power and transportation. Furthermore, the lack of technical human resources and technology advancements exacerbates the operational difficulties faced by businesses. This situation has led to the shutdown of multinational corporations and discouraged potential foreign investors, resulting in a noticeable decline in FDIs.
Innocent Iweka Okwuosa, the 59th President of ICAN, in his publication titled “ICAN Position Paper: Attracting Foreign Direct Investment,” highlighted the continued decline in FDIs despite government efforts like the Presidential Enabling Business Environment Council (PEBEC) established in 2016. According to the Nigerian Bureau of Statistics (NBS), FDI plummeted by 69% and 44% in the first and third quarters of 2023, respectively, compared to the previous year.
Okwuosa expressed that unreliable power supply leads to economic losses of around $26.2 billion annually. Corruption and transparency issues further deter investors, as does the volatile foreign exchange market. The restricted access to finance, particularly for Small and Medium Enterprises, also hampers economic growth.
In response to these challenges, ICAN urges the Federal Government to undertake a swift policy review. The Institute believes that such measures are crucial to create an environment conducive to attracting and retaining FDIs.
The ICAN President suggests enhancing private sector investment in infrastructure. He calls for more active engagement from the Infrastructure Concession Regulatory Commission (ICRC) and demands greater accountability and transparency in public-private partnership projects.
Addressing security concerns is another crucial recommendation from ICAN. The Institute calls for decisive action against those involved in oil theft, illegal mining, and insurgency, thus fostering a peaceful and orderly environment attractive to investors.
ICAN’s policy recommendations extend to legal, regulatory, tax, and port reforms. The organization emphasizes the need for transparency in foreign exchange market management and a zero-tolerance approach to bribery and corruption. They propose establishing anti-corruption courts in all states and reorganizing major anti-corruption institutions to make them more relevant to the contemporary Nigerian business environment.
These recommendations, according to ICAN, are not just critical for reversing the FDI decline but are also fundamental for the overall economic growth and stability of Nigeria.
