KADUNA – The Head, Research and Documentation, Financial Derivatives Company (FDC), Mr Afolabi Olowookere, on Wednesday urged the Federal Government to boost the nation’s Foreign Direct Investment (FDI), rather than Foreign Portfolio Investment (FPI), for economic growth.
Olowookere stated this at the ongoing seminar organised by the Central Bank of Nigeria (CBN) for Finance Correspondents and Business Editors in Kaduna.
The theme of the seminar is: “Rebasing of Nigeria’s economy and Implications for FSS 2020”.
He said while delivering a paper on “Gross Domestic Product (GDP) Rebasing and the Impact on Nigeria’s Investment Environment,” that FDI would automatically enhance Nigeria’s national development.
According to him, there is a correlation between the FDI and the FPI, as related to GDP, because the two have positive effects on the economy.
Olowookere said that at the moment, the government depended more on the FPI, which he said was not good enough, because there was less commitment on the part of the investors.
He also said that the portfolio investors could easily move out their ‘hot monies’ from the system, particularly from the capital market, at any given time, if there was any negative development.
The researcher said that it was not so in the case of the FDI because investors contributed to the development of the country by creating employment through creation of companies and infrastructure development.
Olowookere said that the rebasing of the GDP had shown that the country remained a service-oriented nation, instead of being a productive nation.
He, however, said that the government should ensure that the country becomes a productive nation, as this would
create employment for the citizenry.
Olowookere said that the debt to GDP ratio with the rebasing would drop and therefore would make government to borrow more.
The effect, he said, would be that the citizens would have to pay high taxes in the future, so that the government could repay its debt.
In his remarks, the Satistician-General of the Federation and Chief Executive, National Bureau of Statistics (NBS),
Dr Yemi Kale, said that Nigeria had to remain focused, while striving to develop the real sector.
The development, Kale said, would keep and advance Nigeria from its position as the 26th largest economy in the world.
Speaking on “Rebasing of Nigeria’s Gross Domestic Product (GDP): Issues, Facts and Fiction”, Kale said other countries might overtake Nigeria if the country relaxed because it had attained the position of the 26th largest economy.
Kale, represented by his Special Assistant, Mr Kayode Olaniyan, said the services sector’s contribution was higher than that of the real sector.
“This,would make the real sector record inclusive and sustained growth, as well as development.”
According to him, the rebasing shows that Nigeria is a service nation, an issue which should be addressed to create employment in the country.
He, however, added that the government needed to concentrate more on labour-driven sectors such as construction, agriculture, manufacturing, small and medium enterprises, amongst others, in the real sector. (NAN)
