For Nigeria to surmount its liquidity challenges, generate foreign exchange (forex) and remain competitive, there is a need to target a heavy inflow of foreign direct investment (FDI) through a wholesale listing of its corporate assets, liberalise infrastructure and commercialise greenfield real estate portfolio.
An economist, Dr. Ayo Teriba, while addressing participants at the Economic Associates (EA) one-day quarterly conference on ‘Nigeria’s Economic Outlook’ in Lagos on Thursday, said aside from unbundling its assets, Nigeria needs to aggressively increase its average cross-border mergers and acquisition deal counts from six deals a year in the next 15 years.
According to him, Nigeria needs to initiate policies that will boost its FDI and remittance inflow sustainably.
He pointed out that this would enable the country to attract huge capital inflows, record domestic liquidity, stability, inclusiveness, diversified growth, shared prosperity and national cohesion post-pandemic.
Teriba insisted that the only way Nigeria could achieve sustainable growth is through privatisation of public assets and subsequent listing them on the stock market.
He said ensuring speedy listing of the companies would ultimately improve the depth of the capital market and create wealth for the people.
“There should be a policy that any company that Nigeria has equity in, must be listed on the exchange. It is only when these assets are listed that you can securitise them for financial value.
“Until we generate a third party claim in any of our assets, it cannot be financial. It is only when it is in a financial firm that we can raise liquidity from it to impact our balance sheet.
“To have companies in the petroleum sector that do not have any market value is a tragedy to Nigeria,” he said.
The economist argued that the country is rich in assets but economically poor, noting that until the nation generates optimal returns from its assets, it may not record any meaningful growth.
He also pointed out that trade flows are drying up globally while financial flows are surging significantly due to cross-border investment deals.
Teriba stressed the need for the country to be more strategic to stay ahead of trends in attracting sufficient financial inflow to grow the economy.
SOURCE: THE GUARDIAN