Nigeria: Govt Mulls New Incentives to Attract Local, Foreign Capital

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Efforts to attract both local and foreign capital into the country may get added boost, as the federal government has assured that it is providing enough policy incentives this year.

The Minister for Finance, Zainab Ahmed, who disclosed this at the First Bank anniversary lecture, in Lagos on Tuesday, expressed worry on the level of infrastructure deficit in Nigeria, while calling for appropriate private sector collaboration to tackle the menace.

According to her, the Federal Government is currently working out modalities on how to include technology and other innovative transaction systems into the tax net to generate more revenue for the government.

She admitted the need for government to rev up efforts in the areas of ease of doing business and tackling insecurity so that Nigeria would remain investment choice for investors.

"The global interdependencies as catalyst for Africa's Ascendancy are both an opportunity and a threat for us in Africa. There are a lot of risks; some of them are within our control while others are not.

"We must as government ensure that we build fiscal purpose, and also provide enough policy incentive that will attract capital both locally and international. We are not worried about Foreign Direct Investment (FDI) coming, but we will prefer to have real investments coming into the country.

"So whatever we need to do in terms of policy, we must do it. The infrastructural deficit is too large for this government or any government to tackle alone, so we must partner with the private sector and allow private capital to come in and use it to develop our economy.

"We must do more than we are doing now in terms of enabling the business environment and improving security, both physical security and security of capital so that when investors choose to come to Nigeria they are comfortable that the investment will grow and flourish.

"So we must learn from the mistakes we made in the past. We must make sure that we accelerate fiscal purpose in investment and also make sure that investment is done on a consistent basis.

"In Africa and Nigeria, we have a unique opportunity that will help a good financial system which is a huge opportunity for us. The local banking industry has been champions in Africa.

"We are proud of banks such as First Bank that are representing us well across several countries. We need to use technology and automation to enhance financial inclusivity in the country. Government on its own part need to work with the financial system.

"This would help to provide that which required covering a lot more Nigerians who are excluded. We also want to look at how we can tax technology, there are so many transactions that happen in our country that we are not getting any benefit from," she said.

The Country Managing Director, International Finance Corporation (IFC), Eme Essien, said Nigeria has a very low private capital to GDP ratio, which is currently discouraging investment in the country.

According to her, a lot needs to be done to attract the financially excluded in the society and boost the nation's financial inclusion exercise, urging the financial sector to stay ahead of trends and remain innovative to enhance inflow of private capital and investment into the country.

In his keynote address, the guest speaker, Prof. Daron Acemoglu, noted that high quality growth is visible in inclusive institutions, adding that democracy has already given Nigerians a voice, which is vital in actualising inclusive institutions.

Acemoglu noted that high quality growth is only visible with inclusive institutions, adding that democracy is gives people a voice that he noted is vital for inclusive institutions.

He added that tax revenue is the lifeblood of developing nations, adding that while social pact is vital in increasing growth, revenues would help in addressing healthcare and educational challenges in Nigeria.

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