Economy
Foreign Investors Begin to Snub Nigeria Over Unstable Policies
By Aduragbemi Omiyale
The rising inflation, insecurity in different parts of the country, devaluation of Naira, harsh operating environment and others are beginning to scare foreign investors away from Nigeria.
Nigeria, which boasts of about 200 million people, prides itself as the giant of Africa and the largest economy on the continent.
However, the various issues facing the nation, especially kidnappings, killings by terrorists termed bandits and others, are making offshore investors wonder if their investments in the country would be safe.
Recent data released by the Nigerian Investments Promotion Commission (NIPC) has shown that foreign investors’ interest in the country was dwindling.
The agency, in its report of investment announcements in Nigeria (January – March 2021), revealed that the sum promised to be invested in Nigeria declined by 26.7 per cent in the first quarter of the year to $5.5 billion from $7.5 billion received in the corresponding period of 2020.
A large chunk of the investment announcements came from the manufacturing sector, accounting for 60 per cent, followed by construction with 34 per cent, electricity with 3 per cent, agriculture and others with one per cent each.
In the same period of last year, transportation accounted for 42 per cent, information and communication technology with 33 per cent, mining/quarrying with 21 per cent, agriculture with 4 per cent and others with one per cent.
By destination, Bayelsa got the lion share with 43 per cent, followed by Delta State with 35 per cent, Akwa Ibom with 17 per cent, Lagos with 3 per cent and others with 3 per cent.
In the corresponding period of 2020, Kaduna accounted for 54 per cent, Nasarawa with one per cent, Lagos with one per cent, and others with 44 per cent.
By source, the investment pledge by local investors accounted for 35 per cent, while Morocco accounted for 17 per cent, the UK with 3 per cent, the US with one per cent and others with 44 per cent.
In the first three months of last year, the US was 42 per cent, South Africa 33 per cent, Nigeria 16 per cent, the UK 8 per cent and others one per cent.
According to the NIPC, Nigeria, in terms of volume, received 15 projects across eight states in the first three months of 2021 in contrast to the 19 projects across 14 states.
Many have blamed the federal government for not having stable fiscal and monetary policies enough to attract foreign direct investments (FDIs) into the country.
An example was in August 2019 when the federal government without prior notice announced the closure of all land borders.
Another was the most recent in June 2021, when the federal government announced the suspension of operations of Twitter in Nigeria because the platform merely enforced one of its rules and deleted a tweet of President Muhammadu Buhari. Prior to the incident, the social media giant snubbed Nigeria to establish its African office in neighbouring Ghana because of moves by Nigeria to pass a bill some observers have said is aimed to gag the media and freedom of speech.
By Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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