Nigeria may not achieve much of its anticipated Foreign Direct Investment (FDI) as Federal Government’s policy has not assured investors of possibilities of foreign exchange repatriation.
A PricewaterhouseCoopers (PwC), report which raised the above concern also noted that the value of the Nigerian currency, the Naira, has fallen by as much as 98 per cent due to the decision of Government to collapse the foreign exchange market into a single Investors and Exporters (I&E) window in 2023.
The report, “Nigeria Economic Outlook: Seven Trends that will Shape Nigerian Economy in 2024,” PwC, a global business advisory services firm, that the slump by almost 100 per cent took place within a period of seven months, spanning May to December 2023.
The report also indicated the much-needed Foreign Direct Investment (FDI), which had taken President Bola Tinubu outside the shores of Nigeria several times since he took over power, might continue to be elusive this year, if investors were not able to easily repatriate their capital.
The report stated, “Foreign investment may remain subdued in 2024 due to capital repatriation challenges.
“Removal of fuel subsidy (which cost $10 billion in 2022), and the collapse of multiple fprex windows into a single I&E window, which caused naira to depreciate by 98 per cent between May and December 2023, among other monetary policy efforts, were key programmes executed to spur growth and regain investors’ confidence.”
The report said the planned fiscal and monetary policy reforms in 2024 were expected to stimulate economic growth, reduce inflation and address the foreign exchange (fprex) challenges to drive investment.
At $85 per barrel prediction in Q1, 2024 due to the Organisation of Petroleum Exporting Countries (OPEC+) production cut, PwC explained that while this could boost revenue from crude oil sales this year, the high oil price and exchange rate devaluation might further raise domestic fuel costs.
According to the document, servicing external debt in foreign currency will become challenging due to exchange rate volatility and the devaluation of the naira.
