Olusegun Zaccheaus, Partner and Lead for Strategy in West Africa at PwC, has said that Nigeria needs to focus on attracting quality capital to stimulate long-term growth.
He said this during TheWitness’ macroeconomic outlook for the third quarter of 2024, held virtually on Saturday.
Zaccheaus said: “More importantly, you need an attractive environment that can bring in capital for it to drive infrastructure growth. I think there is a long way to go on that. I think a couple of steps have been taken that are in the right direction but I think fundamentally, infrastructure drives long-term growth. For us to achieve long-term growth, you must attract good quality capital that can drive this growth.”
The PwC partner also affirmed the necessity of fixing certain fundamentals to attract quality investments. Zaccheaus also stressed the need to solve issues that would drive medium-term growth for the country.
He noted: “I think what this administration has done is to take some critical bold steps to begin to fix those things that can potentially affect us in the long term, which will then attract investments.
“I think what this administration could have done better are two things. One, telling the story of the journey one must take to the end-state. I don’t think we have told that story very well. I don’t think we have quite managed the expectation that it is going to be really difficult in the short term, and we need to fix it for a better medium term.
“I think the second is the ability of the government to impact the vulnerable segment of the economy. I don’t think we have also done that quite well. But in terms of fundamentals for the short term, I think the government has set things in place.”
Addressing the crucial issue of insecurity, Zaccheaus stressed its impact on agricultural productivity and the overall attractiveness of the country for investment. He also called for stronger public-private partnerships to drive infrastructural growth.
He concluded by stressing the importance of policy trade-offs and the need for every Nigerian to understand their significance in the broader economic context.
Nigeria’s total capital importation rose by 210.16% in the first quarter of 2024 from $1.08 billion recorded in Q4, 2023 to $3.37 billion in the period under review.
This is according to the National Bureau of Statistics (NBS) capital importation report in the first quarter of 2024. When compared to the corresponding quarter of 2023, capital importation increased by 198.06% in the first quarter of 2024.
However, debt instruments dominate capital importation into Nigeria in Q1 2024, making up 94% of inflows.
For money market instruments, the NBS reported an 11-fold increase year on year to $1.61 billion from $125.9 million. This is also about 274% higher than the total money market-related inflows of $428.9 recorded for the whole of 2023.
Nigerian bonds attracted $420.81 million in foreign capital, up by about 40% from the previous year’s $301.08 million in the same quarter.
On the fiscal side, Nigeria also recorded a 165.3% rise in loans going from $433 million in the first quarter of 2023 to $1.15 billion in the corresponding period this year.
This means that about a total of $3.18 billion in foreign capital inflows into Nigeria are from debt instruments, which is 94% of the $3.38 billion recorded as total capital importation for Q1 2024.
