According to a 2019 report, sighted on the CBN’s website, titled, ‘Current Account Balance and Economic Growth in Nigeria: An Empirical Investigation,’ the primary income account has been in deficit due to increased debt service payments and remittances of dividends, income, and profits by foreign-owned companies.
It stated that the outflow from the account was undermining the productivity of the real sector as foreign exchange resources which ought to have been used to develop the economy were being used to service external debt.
It averred “In addition, the profit, which ought to have been ploughed back to generate increased economic activities, is being remitted to overseas countries by foreign-owned companies in Nigeria.”
The report further noted that the net deficit in the income account has declined in recent years due to lower out-payments of dividends and distributed branch profit and other interest payments.
Recall that foreign airlines repatriated (through ticket sales) $4.66bn from Nigeria in 15 months. It stated that despite this, these airlines were still struggling to get their funds out because of the scarcity of FX supply in the country.
Conscious of the problem investors face with repatriating their funds, the President, Bola Tinubu, in his inaugural address to the country said, “I have a message for our investors, local and foreign: our government shall review all their complaints about multiple taxation and various anti-investment inhibitions. We shall ensure that investors and foreign businesses repatriate their hard-earned dividends and profits home.”
However, not much of the promises has been translated to action after all.
