By Augustine Omilo
As part of measures to ensure a healthy economic state for Nigeria, successive administrations have always embarked on what can be termed; “investment drives”, which often involves presidents and governors moving from one part of the world to the other with one message – invite for direct foreign investment (DFI) to Nigeria. Sometimes too, trade expos and business conferences are organized with a view to showcasing areas of profitable economic ventures for potential investors to tap into.
While these efforts are commendable, it is equally necessary to take cognizance of factors discouraging investors from embarking on business ventures in the country. And by extension, the reasons behind many foreigners’ preference for direct portfolio investment (DPI) in Nigeria as against the Direct Foreign Investment, DFI as often canvassed for. Amidst all these, calling for investors’ participation in the nation’s economic activities without checking the growing spate of capital flight in the country will definitely amount to building castles in the air.
To begin with, economists define capital flight as a phenomenon characterized by large outflows of assets and/or capital from a country due to some events, resulting in negative economic consequences to that country. Additionally, the term can be referred to as the rapid withdrawal of assets and capital from certain regions or cities within a country. This may include the withdrawal of both foreign and domestic capital. The consequences of capital flight include but not limited to increased unemployment due to job losses, reduction in taxes paid to government resulting to low government ability to execute projects and production of poor quality goods and services as a result of less competition among members of the different sectors of the economy.
Though, hardly mentioned in the books of economics, capital flight may also be seen in terms of the exodus of a country’s skilled young work force to other nations in search of greener pastures.
Without mincing words, capital flight is majorly caused by the devaluation of a nation’s currency, unstable foreign exchange rates, political tension occasioned by agitations or war and unfavourable economic policies such as taxes, insecurity and minimum wage, just to mention a few. All these are presently the order of the day in Nigeria. They should therefore be adequately addressed before or alongside the call for individuals, companies and other nations to signify interest in the country’s vast profitable economic potentials.
As many citizens of Africa’s largest populated country continue to lament over the exit of great companies like DN Meyer, West African Enginering Company, WAECO, Smithclime Beacham, Philip Nigeria Ltd, Layland Motors, Asaba Textile Mill, Afprint, TotlalEnergy amongst many others, reports are already making the rounds about Guinness Nigeria Plc’s readiness to leave Nigeria in 2025. What the exit of Guinness from Nigeria means is that about 2,515 employees of the company will be thrown into the already saturated labour market.
It took about 75 years for this organisation to get to its present profitable state. Therefore, even if Tinubu and all the governors succeed in attracting investors who are ready to plunge into the mucky economic waters in Nigeria, it will be difficult to have them (investors) employ as many workers as the ones laid off and those set to be laid of by companies intending to move out to safer climes.
Going forward, the nation’s economic planners must begin to regularly interact with organized labour, organized private sector, selected members of the informal economic sector, professionals, academics, security agencies, orientation bureaus and other stake holders with focus on how to move the nation forward economically with little or no harm on investors – the main drivers of the economies of the world.
The time has come for the country to begin to look inwards for solutions to the myriad of challenges faced by her citizens, especially in terms of security, food, education and shelter.
Nigeria must do all she can to protect her infant industries such Innoson Motors, Dangote Cement, Dangote Refineries, Globacom, SystemSpec, Omatec, Zenox and so on with all known economic tools.
Even though it may be difficult to return to the old regime of subsidy payment on petrol, President BAT should put checks in place to ensure that there are no leakages in his economic policies. Smugglers must be stopped from depriving Nigerians of adequate petroleum products for consumption.
The national and state orientation agencies have roles to play in making the Nigerian project work. They should therefore be taken seriously in terms of budgetary allocations and personnel recruitments. And of course, with the hope that those saddled with the responsibility for the business of orientation are themselves working with the right mindsets. Their efforts can be complemented with those of competent public speakers who are ready to be hired to pass messages of attitude to the populace as done in places like the United States of America, USA, United Kingdom, UK and others.
Religious organisations with little or large followings must equally be patriotic enough in instilling discipline in the hearts of adherents. Their leaders’ messages must be loaded with the right attitudes expected from their members.