The US Deputy Secretary of Treasury, Wally Adeyemo, has said Nigeria lacks the macroeconomic framework to attract more dollar denominated foreign direct investments into its economy.
Adeyemo noted that the government needs to develop a macroeconomic framework that demonstrates its commitment to the fundamentals and this will in turn help attract foreign investors to the country and help the country’s economy thrive.
This was made known by Adeyemo while speaking at the Lagos Business School (LBS) at a forum with business leaders in Lagos on Monday, September 18, 2023.
Adeyemo, who spoke on the US-Nigeria Economic Relationship, praised the early steps taken by the government in terms of the fiscal policy and unification of the exchange rate.
More needs to be done
The US top official stated that more needs to be done, noting that as companies around the world become more comfortable with the approach of Nigeria, the country would be destination for Foreign Direct Investment (FDI).
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Responding to a question about investments and the Nigerian economy from the audience, Adeyemo said,
- “Nigeria lacks a macroeconomic framework that is going to help to bring more foreign direct investments including dollar-based foreign investments into the country.
- “The early steps the government has taken is good in terms of what they have done (fiscal policy), in terms of what they are trying to do with unifying the exchange rates. More needs to be done and they recognise that. The truth is as companies around the world become more comfortable with their approach, you would expect that Nigeria would be a destination for FDI.”
No quick solutions
The Deputy Secretary said the proposed reforms by the Nigerian government will not have bring quick solutions because things have been difficult economically over the past few years due to COVID, the Russian-Ukraine war, and a confusing exchange rate policy.
- He said, “We need to make sure that as you are making the transition, which will take longer than anyone wants, that you are taking steps to make sure that you are helping Nigerians who are feeling it the most. But I think the most important point, is that you need to put reforms in place that allows people to bring in capital into the country in a way that they are secured and can take their money out when they choose to and they continue to make investments.’’
According to him, America is bullish on Nigeria because of its people, adding that the recently introduced reforms in Nigeria were long overdue.
He said the US had made it clear to the Nigerian government that it wanted to partner in the implementation of the reforms.
- He disclosed, “And this is not just the US, the World Bank, the AFDB, and other international institutions too. I know that before I came, I spoke to the president of the World Bank who has seen the president of the administration and is ready to work with them in terms of trying to help make the transition easier, especially for Nigerians feeling the pinch.”
He noted that United States is one of the largest foreign investors in Nigeria, with the country being the US’s second-largest African trading partner. He stated that the US government provided Nigeria with over $1 billion assistance in 2022, to support Nigerians with access to health care and reduce food insecurity.