10 requests Tinubu should be making of Joe Biden if he is serious about attracting foreign direct investment and growing Nigeria’s gross domestic product
*Photo L-R: Tinubu, Biden *
By Ayo Akinfe
[1] Pre-pandemic in 2019, US foreign direct investment (FDI) worldwide totalled $5.96trn. As the world’s largest black nation and Afriva’s largest economy, Nigeria insists that from henceforth, we must attract 10% of all such investment
[2] In the US, FDI in 2019 totalled $246bn, with about $125bn of this coming from Japan. Nigeria needs the US to press Japan to counter-invest in Nigeria too
[3] Every industrialised nation worldwide takes FDI very seriously because it opens up new markets for their goods, creates ancillary employment back home and the returns on investment are generally high. From henceforth, the US will strive to ensure Nigeria attracts at least $50bn worth of FDI annually
[4] Here are the US FDI figures for 2019 before the coronavirus pandemic derailed things. These are the top 10 destinations – Netherlands $860bn, UK $851bn, Luxembourg $766bn, Canada $402bn, Ireland $354bn, Singapore $287bn, Bermuda $262bn, Switzerland $228bn, Australia $162bn, Germany $148bn
[5] One striking feature is that the investments in places like Luxembourg, Singapore, Bermuda and Switzerland are in financial services. Now, Nigerian interest rates are very high, so we are actually a very sound location for pension and investment funds to lodge their cash
[6] If you look at US investment in China, in 2019 it was $116bn and for Mexico it was $100bn. For Brazil it was $81bn, while for India it was $45bn. In all these nations, the investment was mainly in manufacturing and heavy industry
[7] Given the chronic lack of manufacturing capacity in Nigeria today, we desperately need FDI in heavy industry. If we can attract the kind of US investment we are seeing in Brazil, Mexico and India, we will be home and dry
[8] Following the Covid-19 pandemic, many US companies are relocating from China as they have come to the conclusion that planting all your eggs in one basket is dangerous. If you look at all the main industrial capital investments, they go to populous nations like China, India, Brazil, Mexico, etc. It is Bola Tinubu’s job to tell the rest of the world that it is unacceptable for Nigeria not to be on that list
[9] As part of his role as US deputy treasury secretary, Wale Adeyemo will oversee FDI globally. It is the job of the Nigerian government to put a case before his office. I cannot believe that Bola Tinubu has not already rung him.
[10] As things stand, Nigeria needs FDI or we die. Without it, we will have more terrorism, more out-of-school children, more Almajiris, more poverty, more dilapidated infrastructure, more corruption, etc. When US yearly investment in India alone is about twice the size of Nigeria’s annual budget, it is delusional to think we can diversify our economy without FDI.
*Ayo Akinfe is a Public Affairs analyst *
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