Teriba: Donor Funds Can’t End Nigeria's Fiscal Crisis...
Recommends policies to attract FDIs, remittances Advocates sales of under-utilised public assets
The Vice-Chairman, Technical Committee of the National Council on Privatisation, Dr. Ayo Teriba has advised the federal government against reliance on the Official DevelopmentAssistance( O DA ), Foreign Portfolio Investment (FPI) or other donor funds to pull Nigeria out of fiscal doldrums.
Rather, Teriba, who is also the Chief Executive Officer, Economic Associates (EA), urged the federal government to come up with policies to attract more foreign direct investments( FD Is) and diaspora remittances, noting that donor funds cannot bring Nigeria out of its fiscal crisis.
He made these recommendations in his article, Nigeria’ s Post Covid-19 Economic Outlook published by a US-based Social Science Research Network, a repository for preprints and international journal.
In the 16- page research paper, the economist observed that Nigeria had been in search of ways of stem ming the economic decline before Covid-19 forced the country, like most other countries across the world, into a lockdown that brought the economy to a halt since March 2020.
He argued that the unfolding global realities “now give Nigeria a chance to leverage its vast public assets to raise external liquidity thresholds enough to switch from contraction to expansion by adopting securitisation privatisation, liberal is at ion, commercial is at ion policies.”
Teriba situated his argument within the context of the increasing global liquidity glut, which he contended, had seen capital in flows to developing countries double in the last decade and Nigeria is well-placed to get a share of the liquidity glut if it created investor-friendly environment and policies.
Despite negative external income shock, he observed that Nigeria“remains asset domestic ally rich. Nigeria’ s history of oil booms combines favourably with her large population, over half of which are spread in hundreds of urban centres, to bequeath her with huge stocks of valuable public assets.
“While Nigeria’s economic, fiscal, and financial struggles resulting from the decline in income have been conspicuous in news headlines and policy discussions, the solutions that the value of assets owned by Nigeria could unleash have been less so.
“It is time to broaden the conversation to include the differences that the value buried in vast assets owned by Nigeria could bring to the narratives, evaluate the case for unlocking domestic and external liquidity from them, and explore ways of doing so.”
On this note, the economist urged that the federal government to articulate clear enough visions of our future by coming up with credible external liquidity and infrastructure roadmaps that our diaspora and foreign investors can invest in, like India, Saudi Arabia, and lately Egypt do.
He noted that African continental single market and West African single currency were conceived in a global environment in which net-exports dominated net capital inflows, which he suggested, should be realigned for optimise investment opportunities.
The economist recommended that both the continental single market and sub-regional single currency “must now be realigned with a new global reality in which net capital inflows dominate net-exports.”
Besides, Teriba equally suggested that Nigeria, like other African states should realign with the evolving reality that surging FDIs and Diaspora Remittances are more reliable sources of external liquidity than meagre donor funds.
Rather than opting for Official Development Assistance (ODA) or volatile Foreign Portfolio Investment (FPI), Teriba asked the federal government to work out policies that could attract more FDIs and diaspora remittances.
In general terms, the economist encouraged Nigeria and Africa to align their policies with unfolding global realities by repositioning themselves through effective investment friendly policies to obtain a fair share of the financial green shoots needed to promote growth and stability.