FG urged to create investment for long-term funds

By Omodele Adigun
TO wean Nigeria from oil de­pendence for export earnings, the Federal Government has been urged to make sustain­able investment for long-term funds.
According to the Manag­ing Director of Cowry Asset Management Limited, Mr Johnson Chukwu, it is holistic approach to economic man­agement that will change the structure of the nation’s econ­omy from its present status of mono-product economy to multiple-exports nation.
Chukwu, who gave the advice Thursday in Lagos while speaking on the theme: Policy Options for Nigerian Economy’s Recovery at a fo­rum organised by the Finance Correspondents Association of Nigeria(FICAN), said there is no single sector of the econ­omy that is fully developed, hence “we need a cocktail of policies which will include cre­ating windows of investment for long-term funds through the concession of commer­cially viable infrastructure, exchange rate adjustment, full deregulation of the down­stream petroleum industry and stimulating investments in sectors where Nigeria has comparative advantage as well as investing heavily in social infrastructure such as health, education and security”.
Reflecting on the current crisis on foreign exchange (forex), which he lamented that it was worsening by the day, he observed that “our policy response will determine if and when we will come out of the crises and if we will be enmeshed in future crude oil price crises. ‘Like humans, organizations and corporate entities, including nations are products of the decisions they took at critical junctures in their life’ .”
He then urged the Fed­eral Government to formulate policies that would encourage value addition instead of pro­duction of raw materials.
His words: “We, however, believe that trade policies are better tools to use in discour­aging the importation of goods whose import hurt local manu­facturers. We have proven cases of successful use of ap­propriate trade policies to de­velop specific industries in the country. A classical example is the Cement industry where local manufacture has grown from 2,000 metric tonnes per annum to more that 40,000 metric tonnes per annum in 15 years. Nigeria has moved from a net importer of cement to a net exporter as a result of targeted use of trade policy in the subsector.
“The Federal Government should renew the previous government’s drive towards the implementation of the cas­sava policy, sugar policy and automobile policy. Similar policies should also be enacted for petroleum refining, palm oil/produce and vegetable oil refining, sesame seeds, cocoa, cotton, granite, furniture, leath­erwears, etc. Should we grow these sectors to the point of producing globally competitive final products from the abun­dantly available raw materials, we would have succeeded in achieving the much desired im­port substitution, conserve our foreign reserve and possibly earn some foreign exchange.”
On infrastructure, the Cowry Asset boss noted that govern­ment alone could not fund the huge infrastructure deficit in the country. “We, therefore, believe that the way to go is to concession some of the critical infrastructure that are commer­cially viable such as transport infrastructure – rail lines, high­ways, seaports, airports, etc. and invite private sector capital to build these infrastructure un­der Build Operate and Transfer (BOT).

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