US reiterates Nigeria lacks macroeconomic framework and needs to undergo more reforms
By Jeph Ajobaju, Chief Copy Editor
United States Deputy Secretary of Treasury Wally Adeyemo has reiterated Nigeria lacks the macroeconomic framework to attract more dollar denominated Foreign Direct Investments (FDIs) into its economy and needs to undergo more reforms to achieve that aim.
Adeyemo, a Nigerian-American on a visit to the country to improve US-Nigeria economic ties, made the point in a speech delivered to industry stakeholders on Monday at the Lagos Business School (LBS).
He said Abuja needs to develop a macroeconomic framework that demonstrates its commitment to the fundamentals, which will in turn help attract foreign investors and facilitate a thriving economy.
He praised the early steps taken by the new administration about fiscal policy and unification of foreign exchange (forex) rate, but stressed more needs to be done.
Adeyemo, in a response to a question from the audience about investments and the Nigerian economy, explained:
“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.”
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No quick solutions
Adeyemo cautioned the proposed reforms by the government will not 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, per Nairametrics.
“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 allow people to bring in capital into the country in a way that they are secure and can take their money out when they choose to and they continue to make investments.’’
America is bullish on Nigeria because of its people, Adeyemo explained, and stressed the recently introduced reforms in the country are long overdue.
He disclosed the US has made it clear to Abuja it wants to partner with it in the implementation of reforms.
“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.”
Adeyemo noted the US is one of the largest foreign investors in Nigeria, the second-largest African trading partner with the US.
He disclosed Washington provided Nigeria with over $1 billion assistance in 2022 to support citizens with access to healthcare and reduce food insecurity.