06 May

Daily Watch – Foreign investments in Nigeria fall to nine year low, Cross River to build deep sea port

  • Cross River State would begin the construction of a deep sea port in three or four months. Prof. Ben Ayade, the state governor announced this shortly after meeting with President Buhari to provide updates on the two projects, the sea port and the super highway. Ayade said preliminary and detailed designs had been completed while the document and inauguration of the steering committee were being done. Ayade said the sea port would create at least 30,000 jobs for the people of the state.
  • Nigeria spent a total of $710.97 million in capital importation in the first quarter of 2016. A report on Nigerian Capital Importation report for Q1 2016 by the NBS, showed that the amount in spent in the quarter under review was the lowest level since the series began in 2007. This represents a decline of 54.34 percent since the final quarter of 2015, and a year on year decline of 73.79 percent. According to NBS, the first quarter of 2016 also saw a large change in the composition of capital imported. The scale of the decline in capital importation in the first quarter of 2016 is said to be symptomatic of the challenging period that the Nigerian economy is going through, following the fall in crude oil prices. Although, the report indicated a number of reasons why the amount of capital imported in recent years may have been higher than usual (such as the inclusion of Nigerian in the JP Morgan Bond Index, and globally low interest rates triggering a search for higher yields over this period), NBS reasoned the fact that the amount of capital import has dropped to a record low suggests that there are further reasons why Nigeria has attracted less foreign investment in recent quarters. Investors may be concerned about whether or not they will be able to repatriate the earnings from their investments, given the current controls on the exchange rate. In addition, as growth has slowed in recent quarters, adding that there may be concerns about the profitability of such investments.
  • Dr. Okey Enelamah, the Minister of Industry, Trade and Investment, has asked the National Assembly to review some of the existing business laws to provide the enabling environment to attract more investment into the country. Enelamah spoke before the House of Representatives at the ongoing “Sectoral Debate’’ on strategies for the diversification of the nation’s economy. He said that legislative intervention was crucial to guarantee ease of doing business in the country. According to him, the Companies and Allied Matters Act, Railway Corporation and Nigeria Postal Acts require overhaul, to align them with realities of the 21st century as well as global best practices. He also asked the lawmakers to fasttrack the Independent Warehouse Regulatory Agency Bill and Secure Transactions in Movable Assets Bill, to guarantee financial savings for Small and Medium Enterprises.