Managing Director/Chief Executive, Fidelity Bank PLC, Mr. Nnamdi Okonkwo has identified the recent foreign exchange restrictions placed on importation of 41 items as one of the many non-oil investment opportunities in the economy.
He stated this during a presentation titled, “Beyond Oil & Gas: Emerging Business Opportunities in Nigeria”, at the Nigeria-British Chamber of Commerce Breakfast Meeting held in Lagos.
Okonwko noted that despite pressure points in the economy, Nigeria’s economic fundamental remains strong, adding that, “, The convergence of social, political and economic factors are generating great expectations, opportunities and uncertainty in the Nigerian macroeconomic environment”.
He said the decline in crude oil prices, resulting to fallen revenue, as well as, the other problems in the oil and gas sector, has prompted a quest for alternative investment opportunities beyond the oil and gas sector.
“But Nigeria’s strong growth reserves are opening new prospects”, he said. These growth prospects, he noted include, “The 60 percent of Nigeria’s arable land yet to be cultivated as well as the country’s population of over 170 million people, which is youthful and provide a huge potential demand and pool of skills. It also provides huge internal market for consumption and expenditure growth.”
He added that in addition to these, the series of reforms implemented by government in recent times, in a bid to transform the economy has created investment opportunities in key sectors of the economy, namely agriculture, health, education, Information Communication Technology and Manufacturing.
For example, he said, “CBN has continued to apply administrative and capital control measures in containing the pressure on the Naira.
On June 23, 2015, the CBN released a circular that expanded the list of imported goods and services that are excluded from accessing foreign exchange (forex) at the Nigerian Interbank Foreign Exchange Market (IFEM).
“Also, on November 6, 2014, the CBN had excluded six items: electronics, finished products, information technology, generators, telecommunication equipment, and invisible transactions from the retail Dutch Auction System (RDAS). The funding of the six items was transferred to the interbank forex market.
“These, and other measures, are to ensure stability of the forex market and the efficient utilisation of forex, and in the process, conserve foreign reserves, encourage local production of the items, and enhance employment generation in the long run. This presents huge opportunity for local investors to seek out capital and strategic alliances to exploit the import-substitution opportunities presented by this policy,” Okonkwo said.
He noted that in the manufacturing sector, “This opens up huge investment opportunities across the ‘banned’ items. The recent gains in electric power generation and the pragmatic determination of government to facilitate improvement in the generation, transmission, and distribution of electric power should enhance the sector’s capacity utilization. High costs of factors of production, ostensibly exacerbated by the naira devaluation, should help in the establishment and growth of local manufacturing.”