Beware Of Foreign Portfolio Investments-Driven Growth, Stocks Experts Warn
Economic experts have warned Nigeria not to be carried away by the influx of foreign portfolio investment dominating the Nigerian Stock Exchange (NSE), noting that a combination of highly mobile portfolio investments and unreliable crude earnings could unravel without warning, and cause external reserves to decline , as experienced from April to November 2008. Besides, they urged the Federal Government to strengthen the non-oil export sector rather than depend solely on rising oil prices. One of them, a financial expert and Chief Consultant, B.Adedipe Associates Limited, Dr . Biodun Adedipe, said as Nigeria approaches the 2019 elections , it is likely that most foreigners would leave the country, and most likely take their investment along due to uncertainty of macro – economic policies.
“We need to do at least 50 per cent of what we did yesterday to get to the historical peak the stock market in Nigeria ever reached, and that was in 2008, ” he said He noted that the euphoria over the seeming foreign exchange liquidity is gradually pushing Nigeria to another worrisome strait , adding that the economy could tailspin into trouble if more attention is not paid to strengthening the non -oil sector to truly diversify foreign earnings, and drive down reliance on consumption imports.
Adedipe, during a round table session organised by the Chartered Institute of Bankers of Nigeria (CIBN ), tagged the 4th Economic Outlook: “Implication for businesses in Nigeria in 2018 , ” noting that although Nigeria’s economic recovery is still fragile, expressed hope as most economic agents remain upbeat and optimistic. Meanwhile , the President /Chairman of Council, CIBN , Prof . Segun Ajibola , tasked economic managers to urgently address issues such as the current high unemployment rate , which rose exponentially from 14 . 2 per cent to 18 . 8 per cent in 2017.
He maintained that efforts need to be further intensified to ensure that the steps being taken to improve electricity generation and distribution across the country yield the desired result . “It would not be misplaced to categorically state that a state of emergency should be declared across the country on security , particularly between farmers and the Fulani Herdsmen in order not to scare away foreign investors from prominent economic hubs of the nation, ” he advised.