While the global economy growthfor 2024 was revised up to 2.8 per cent from the 2.7 per cent projected in January, largely reflecting a brighter outlook for mature economies, according to the Global Economic Outlook by The Conference Board, a global non-profit think tank and business membership organisation, the pace of the economic recovery in Nigeria has remained low.
Consequently, some business operators in the United Kingdom planning to expand their businesses in Nigeria told FinIntell that the slow recovery of the nation’s economy aftermath of the global pandemic has continued to hamper their expansion plans.
Speaking at The Omega Business forum in Manchester, organised by Omega Chapel International, Joy Ekene, the Chief Executive Officer of Jeda Beauty Product, said following reports of the dawdling performance of the Nigerian economic, her company had to re-strategise its investment plan because a number of agencies she had hoped to partner with do not have good business patronage currently when compared to the pre pandemic era.
Ms. Ekene said, “About three of the agencies we wanted to partner with in Nigeria already informed us that many companies have done drastic reduction in the fund budgeted for partnership or expansion due to the economic downturn,” adding that businesses are also struggling to survive because the unstable foreign exchange rate has further deepened the economic crisis.
Real Estate Industry Seeks Fund
The convener of the forum, Seyi Akinyemi, Director at PJG Properties UK, said that the banking and the financial sector in Nigeria are facing credit crunch as most companies, especially real estate firms with good business plans coming to establish in the country, are not guaranteed access to investment funds, even when they have good deposits in Nigerian banks.”
Mr Akinyemi said, “Here in the UK, with good deposits, companies can get investment funds to further expand their businesses. But the case is not the same in Nigeria because the country is facing a lot of economic challenges.”
“It is our hope that the new administration led by President Bola Tinubu would create an enabling environment that will make economic recovery in the country faster so that Nigerian business communities in Diaspora would be encouraged to expand their businesses to Nigeria in order to get good returns on investment,” he admonished.
Mr Akinyemi said that Omega Chapel, a religious organisation, convened the meeting to discuss why many successful Nigerian businesses in Diaspora are reluctant to invest back home despite the numerous investment opportunities they can tap into if they expand their businesses to the most populous African country. “When we discuss the why, we can then advice the Nigerian government to address the issues raised at the forum,” he said, while promising that the communiqué of the findings, suggestions and agreements arrived at the forum will be passed to the relevant Nigerian authorities for necessary actions.
Emergency Measures Needed
Participants at the event opined that for Nigeria to attain robust and full recovery of its economy, banks must resume lending to businesses while the Federal Government of Nigeria must take emergency measures to stabilise various sector of the economy with the Central Bank in the lead.
“The Nigerian government must step in because I understand that with bad loans running into several billions of naira still in the books, many banks continue to hoard cash and turn down loan applications. This squeezes both small and large businesses, which often rely on credit to meet payroll, order supplies, invest and grow,” Andrew Kent, a participant and venture capitalist, said.
He said confidence in the financial system needs to rebound; pointing out that Nigerian economy remains gloomy, with most consumer-confidence surveys showing only modest improvements.
Another contributor said, “The Nigerian economy continues to be vulnerable to developments in the global economy, hence the severity of the impact of the recent global pandemic on the economy.” The analysts believe that the recent removal of petroleum products subsidy also contributed to the challenges facing the nation’s economy.
Insecurity Must Be Addressed
Chika Tochukwu, an entrepreneur and owner of an African food shop, said the present situation of the Nigerian economy, including the rising level of insecurity, will further hinder foreign investors from coming to the country.
“What foreign investors are waiting for right now after the stability of the political economy in Nigeria is guaranteed security. The Nigerian government must ensure the security of lives and properties. Businesses owned by local and foreign investors must be secured. With that, those of us abroad can say Nigeria is now on a part of recovery and consistent reforms. We can then tell our partners and investors from around the world to follow us to Nigeria and expand our brands,” Mrs Tochukwu said.
