A new report by the Private Equity and Venture Capital Association of Nigeria (PEVCA) has stated that the recent policies of President Tinubu seem not well thought-out and might discourage investments into the country.
The association stated this in its midyear review and strategic outlook for the year 2024 where it stated that the recent policies of the current administration may hinder and hamper success.
According to the report, the policies of the Tinubu administration have competing goals, and such might deter investors both local and foreign.
It noted that the short-term revenue generation goals of the current administration are impeding plans to create a business-friendly environment.
The report reads, “The introduction of policies with competing goals and interests will remain a deterrence for investors. Policies lack consistency and, in some cases, appear to be more of a knee-jerk reaction rather than a well thought out plan. Specifically, a number of short-term revenue generation goals continue to compete with the goal of creating a favourable business environment that attracts investors.”
Policies mitigating against investments in Nigeria
Furthermore, the report provided examples of policies geared towards revenue generation which contrast with the goals of attracting foreign investment.
Such examples include; the introduction of an expatriate levy for companies operating in Nigeria which was later suspended, the cybersecurity levy and others.
It noted that the policies if implemented would have created an adverse working environment for the current administration but stated it revealed how the government does not collaborate with the private sector.
Also, the report stated that several key government agencies and departments, including the Securities Exchange Commission (SEC), remain without a board. This situation follows President Tinubu’s decision in June 2023 to “clean shop” by dissolving all statutory agencies, ministries, and departments. It was noted that new appointments have not yet been made, which has stalled economic activity.
Although, contrary to the PEVCA report, President Tinubu in April appointed a substantive board for the Securities and Exchange Commission (SEC) with Emomotimi Agama as Director General. This appoint was approved by the senate in May 2024.
What you should know
- The administration of President Bola Tinubu on assumption into office has executed major reforms in the energy and foreign exchange market.
- However, the ripple effects of these reforms which were initiated in less than a month into office have greatly affected the economy in terms of inflation and exchange rate.
- Furthermore, the Presidency to mitigate the ripple effects of the reforms on public finance, the administration is seeking some short-term revenue generation strategies.
- Last month, the federal government proposed an amendment to the Finance Act to introduce a windfall tax on foreign exchange revaluation gains of banks by up to 50%. The National Assembly during deliberation increased the levy to 70%.
