The organised private sector, made up investors across industries, is awaiting the direction of the newly inaugurated President Muhammad Buhari’s economic blueprint to determine where to put their money.
“At this time, we eagerly await President Buhari’s economic blueprint that would define the policy direction of his administration,” said Remi Bello, president, Lagos Chamber of Commerce and Industry (LCCI), in a statement, adding that “This is important for policy clarity, strategic planning, investment decisions and confidence.”
For the past five months, investors have kept their money back from Nigeria, due to uncertainties surrounding the country’s general elections. They feared there could be pre- or post- election tensions which could mar their investments.
Though there has been relative peace after March 28 and April 11 during which presidential and gubernatorial elections respectively, were held, investors are yet to make major decisions in the first and the greater part of the second quarter because the present government has just been sworn in and is yet to get off the ground.
This is remarkably different from the first half of 2014 within which Procter & Gamble announced an investment of $300 million at Agbara, Ogun State. Within the period in 2014, the sugar industry was buoyed by $2.6 billion investment by Dangote, Flour Mills, McNichols and Crystal Sugar, among others.
Total value of investments made within this period (H1) 2014 in the manufacturing sector alone was N483.05 billion, according to the Manufacturers Association of Nigeria (MAN) data.
“Buhari says he is keen on diversifying the economy. So we want to see the card he is holding close to his chest on agriculture, manufacturing and export, the position which Ikechukwu Ibeabuchi, chief executive officer, MD Services Limited, who is also an investor in the local chemicals industry, said will “determine where we will put our money.”
Investors are keenly awaiting government’s decisions on the oil and gas sector, power intervention, investment incentives and monetary policy, including the exchange rate, according to analysts.
They are likewise awaiting policy statements on inflation and interest rates, as well as how the new government will handle the automotive policy introduced by the immediate past administration.
Some investors told our correspondent that they are also waiting for how the new government intends to handle the cost of doing business, an area in which the country currently ranks 170 out of 189 countries.
Ede Dafinone, chief executive officer, Sapele Integrated Industries Limited, said investors are essentially waiting for Buhari’s appointments and are satisfied with his inaugural speech which did not connote panic.
“I spoke with an ambassador from one of the European countries and he plainly told me that his investment team is awaiting Buhari’s ministers. Appointment of credible people will send positive signals,”said Dafinone, who is also an investor in the rubber industry.
The Manufacturers Association of Nigeria, involving key investors in over 77 sectors in the Nigerian economy, says they await government’s decisions on innovation and technology, power, rail system, port administration, standards, patronage of locally manufactured goods and trade issues.
“We believe the Export Expansion Guideline should be reviewed. We also believe the operation of the ECOWAS Trade Liberalisation Scheme (ETLS) should be addressed,” said MAN, headed by Frank Udemba Jacobs.
Other manufacturers say that decisions on key trade issues such as the Common External Tariff (CET) already agreed to by the fifteen member countries of the Economic Community of West African States would determine the direction of the economy.
They say the new administration must not sign the Economic Partnership Agreement (EPA) between ECOWAS and Europe, as this will be a disincentive and also destroy the manufacturing industry.
Tunde Oyelola, chairman, MAN Export Group and vice-chairman, PZ Cussons Nigeria plc, said exporters in the country are awaiting the new government’s decision on the Export Expansion Grant Scheme, which was suspended two years ago by the immediate past government.
According to Oyelola, a positive disposition to the EEG and the Negotiable Duty Credit Certificate will enhance investments in the export sector, particularly the value-adding agriculture and manufacturing.