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Government & Politics

FG Believes Private Sector Will Turnaround The Country’s Worst Economic Crisis In 25 Years

Buhari
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Enelamah said President Muhammadu Buhari recognized the need for the government to attract foreign investment to regain momentum as dollar shortages deepen the country’s economic slump.

The Federal Government will work more closely with the private sector to turnaround the country’s worst economic crisis in 25 years, Okechukwu Enelamah, Minister for Investment, Industry and Trade, has said, reports FT.

“We need to partner with the private sector to do what’s good for the economy,” he said at a trade conference in the Ethiopian capital, Addis Ababa.

“The president wants to attract business to the country?…?and frequently supports the means to do so.”

Investor sentiment has sunk this year as the country’s fiscal woes have worsened. Foreign and Nigerian business people use words including “nightmare” and “disastrous” to describe the Buhari administration’s handling of the economic crisis.

Data released last week show the economy shrank for the third consecutive quarter. The International Monetary Fund forecasts Nigeria’s economy will contract 1.7 percent this year — a sign of the dire fiscal straits African commodities producers are in after more than two years of low global prices.

Militant attacks in the oil-producing Niger Delta have also slashed crude outputs, the country’s biggest revenue-earner, and hopes for the start of an economic recovery this year have faded.

Enelamah insisted Buhari was working to improve the economy and sought to play down investor concerns that the president was suspicious of business.

“He is not wary about the private sector,” said the minister, who led Nigeria’s biggest private equity firm before joining the government a year ago. He is now been criticised by former industry colleagues for not clearly outlining a plan to improve the business climate.

“Every important private sector guy who wants to meet him (the president), he meets. Every time he goes abroad he has a business forum which he attends. I think he’s signalling it [support for business] very strongly.”

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John Ashbourne, Africa economist at Capital Economics, said that “warm words aren’t going to make up for the significant practical barriers that investors face”.

“We hear a lot of investor-friendly talk from the Nigerian government, but many of the obstacles to investing in the country are of the government’s own making,” he added, citing the capital controls introduced by the central bank with Buhari’s backing.

“A lot of investors are still standing by the sidelines and waiting to see how Nigeria’s economic crisis turns out before they commit any money to the country.”

The business community believes a big problem in the economy is the central bank’s management of the foreign exchange market, which is critical to local manufacturers who import materials not available locally and to companies seeking to bring in hard currency and make new investments.

Foreign airlines have reduced services to country partly because they have been unable to repatriate profits, and because the currency crisis has raised the costs of imported jet fuel.

“It’s a very important systemic issue that’s being solved,” said Enelamah, although foreign exchange shortages have not improved despite the removal of a currency peg in June. “While we’ve had some mis-steps, my view is those mis-steps are being corrected, the most important one being the policy itself, which was less flexible, is being liberalised.”

Nigeria ranked 169 out of 190 countries on the World Bank’s ease of doing business index this year. The same troubles with bureaucracy and confusion or corruption at the country’s ports and with Customs authorities have endured during Buhari’s 18 months in office.


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