Fola Fagbule, Senior VP and Head Advisory at Africa Finance Corporation said legitimate export trade and investment is a viable way out of Nigeria’s economic burdens and would move Nigeria away from crude oil dependence.
He disclosed this while speaking at a webinar organised by Nairametrics titled, “Economic Outlook: Projecting Nigeria’s Recovery”.
Fagbule said 42% of Nigeria’s GDP is trade, telecoms, I.T, Service economy and others, and boosting the sectors is a way to improve Nigeria’s economy as the country battles a GDP decline due to the global COVID-19 pandemic.
He added that Nigeria is below her peers in Africa in investment as a percentage of GDP. “Gabon’s investment as a percentage of GDP is 30%, Nigeria is less than 14%,” he said, citing the performance of Africa Finance Corporation’s investments in Gabon.
He said that if Nigeria doubles its investment as a percentage of GDP, it could reach $60 billion annually, adding that the investment focus should be on drivers of trade.
“ Gabon’s success was about facilitating export trade,” he said, adding that Nigeria can mirror same objectives, which would boost infrastructure investments to achieve success in export trade.
Citing the present capital expenditure of the Nigerian government which is not sufficient to combat Nigeria’s economic burdens, he said export trade is a legitimate way to boost FDI and FX liquidity as infrastructure is a major focus on making export trade work.
On ways of attracting foreign investments to boost trade in the country, he said, “the best way to attract foreign financing to Nigeria is to tie it to projects.
“Viable projects that are well structured can also catalyze private investors to fund private projects. We need to change direction to financing specific projects.”
Fagbule said that such specific financing for projects include Nigeria’s Electricity infrastructure upgrade project with SIEMENS, which Nairametrics reported last month as a $2 billion power deal, under the Presidential Power Initiative (PPI), with 85% of funding from a consortium of banks, and guaranteed by the German government through credit insurance firm, Euler Hermes.