BusinessFeatured

Nigeria’s investment Rate Still Below Par – PwC Report

163

[dropcap]N[/dropcap]igeria’s economic growth remain broadly unchanged in 2015 and 2016, significantly below the country’s long-term potential, shows the PwCs  recent economic paper, Boosting Investments: Nigeria’s path to growth, estimates the size of investment needed to drive growth.

The study shows that between 2007 and 2016, Nigeria’s investment share of GDP declined from 18.7% to 12.6%, reaching the lowest level in the past two decades. In comparison to peers, Nigeria’s investment rate lags the average of 23.3% recorded for sub- Saharan African countries, and 28.9% for the BRICS (Brazil, Russia, India, China, and South Africa).

“Growth in Nigeria has been relatively strong at an average of 5.6% per annum over the past decade. However, this has been fueled by the oil boom and population expansion, rather than investments.”

The foreign exchange regime remains key to stimulating investment, PwC said.

“While foreign exchange liquidity has improved in recent times as the Central Bank of Nigeria (CBN) allows for more flexibility in the foreign exchange market, the existence of multiple exchange rates with significant variances poses a risk to investment. In our view, a market-determined exchange rate, where all rates are harmonized, is fundamental to boosting domestic and foreign investments, the report suggested.

PwC projects that Nigeria could emerge the 14th largest economy in the world by 2050, with GDP in Market Exchange Rate (MER) terms at US$ 3.3 trillion. To deliver sustainable growth with per capita gains, Nigeria will need to aggressively boost domestic and foreign investments over the next decade.

According to the PwC, an extensive review of 26 economic papers was conducted to identify the key determinants of economic growth, particularly in the emerging and developing economies.

“We find that investment is the most fundamental driver of growth, with positive and statistically significant coefficients, PwC said.

PricewaterhouseCoopers is a multinational professional services network headquartered in London, United Kingdom. It is the second largest professional services firm in the world, and is one of the Big Four auditors, along with Deloitte, EY and KPMG

Adedayo Akinbiyi and Andrew S Nevin (PhD) can be contacted for further discussion on the report.

 

Leave a comment

Related Articles

Updated: We raised interest rate to 24.75 percent to fight inflation – CBN

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN)...

Don’t sell dollar above N1,269, CBN orders Bureau de Change

As part of measures to strengthen the naira against the dollar, the...

Dangote set to disburse N15bln food items to 774 LGAs to cushion harsh economic conditions

Nigerian businessman and industrialist Alhaji Aliko Dangote says he has allocated N15...

Naira strengthens to N1400/$ at parallel market as speculators sell

The naira strengthened on Wednesday to close at N1400/$1 in the parallel...

Just In: Zenith Bank names Adaora Umeoji as its first female Group Managing Director

The Board Directors of Zenith Bank Plc has announced the appointment the...

Nigerian Business Community to FG: Use Ghana Trade Office to solve our problems

The Nigerian business community in Ghana has urged the federal government to...

Heirs Holdings tells story of transformational investment in Africa, launches its first-ever TV commercial

Heirs Holdings has launched its first-ever television commercial (TVC), showcasing the company’s...

Aig-Imoukhuede, co-founder, returns to Access Holdings as Chairman

Access Holdings PIc has announced the return of Mr. Aigboje Aig-Imoukhuede as...

CBN to sanction MfBs over late non-rendition of statutory monthly returns

The Central Bank of Nigeria (CBN) has directed all microfinance banks (MfBs)...

In a great leap forward, Heirs Holdings launches Heirs Technologies, set to lead Africa’s digital evolution

Heirs Holdings, a leading African investment company dedicated to improving lives and...

Transcorp Group announces listing of Transcorp Power Plc by introduction on Nigerian Exchange’s Main Board March 4

Transnational Corporation Plc (Transcorp Group) wishes to announce the listing of its...

CBN to sell N1.64trn Treasury bills in Q2 2024

The Central Bank of Nigeria (CBN) has said it will sell Treasury...

Nigeria lacks sufficient reserves to tackle FX demands, backlog in the market, says expert

An economist, Mr. Esili Eigbe, has said Nigeria lacked sufficient reserves to...

CBN to sell dollar at N1,301 to authorized BDC

In its bid to increase liquidity, strengthen the naira, and curb distortion...

Economic hardship: Elumelu to partner MOFI to boost economy

Nigerian philanthropist and Chairman of Heirs Holdings Group, Mr. Tony Elumelu, has...

NSA, CBN join forces to curb illicit activities in forex market

In its bid to strengthen Nigeria’s foreign exchange market, the Office of...

CBN stops dollar cash payments for BTA, PTA

The Central Bank of Nigeria (CBN) has announced that it will no...

Wigwe’s death: Access Holdings appoints Bolaji Agbede its Ag. CEO

Access Holdings Plc has announced the appointment of Ms. Bolaji Agbede as...

We must moderate our demands for forex, says Cardoso

The governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso,...

NNPCL, CBN partner for seamless banking operations

In their bid to foster transparency and seamless commercial operations, the Nigerian...