Borrowing can’t exit Nigeria from recession faster than investment—-Experts
Pundits in development economist and management experts have submitted that the federal government is technically extending the current economic recession by growing borrowing spree instead of facilitating massive investments in strategic sectors of the economy.
In unison, they argued that Nigeria needs to quickly introduce policies that will encourage massive local and foreign direct investments (FDIs), and not borrowing from external finance institutions.
To them, government must partner with investors both local and international to drive a yearly financial inflow that will run into a minimum of $50 billion yearly.
Currently, federal government seems to be test running a policy direction based on massive external borrowings to develop ailing infrastructure sector and jump-start economic activities though massive spending and jobs creation.
But experts fault the idea, insisting that the current policy direction cannot effectively stimulate the needed growth capable of exiting the economy from recession.
The new idea which was put forward by the Corporate Members’ Forum organised by the Nigerian Institute of Management (NIM) Chartered in Lagos.
An economist, and Faculty member, Lagos Business School, Dr Bongo Adi, argued that government’s borrowing plan, which he said would rather increase the economic woes cannot do the expected magic of early exit from recession.
According to him, “Borrowing is not an option; it won’t give that much, and it will become a burden. Investment is the only option; you can get more than that, and you won’t need to repay it. Investors should be allowed to come and use their money to bring something out of nothing. Such investment opportunities abound in rail transportation and energy infrastructure”.
“Nigeria used to attract more FDIs than India, South Korea, South Africa, and the United Arab Emirates, UAE. One after the other, they have all overtaken us! How could we let that happen,” he queried.
“We must correct that now, by opening the vents and let investment flood in. We must break all government monopolies as we did in telecoms. Government should also fill all important vacancies in federal regulatory agencies and MDAs.
Earlier in his remarks, president of the Institute, Prof. Munzali Jibril, called on the federal government to device and introduce a new economic reform programme that will clearly show that it is running an investor-friendly economic direction.
To him, only such policy direction can stimulate and further attract private capital from domestic and international investors to the economy seamlessly.
