With the current global growth going at a flat trajectory, most countries will find it challenging to sustain growth, particularly export-revenue-dependent economies. This is why Nigeria should, as urgent, connect its assets to global liquidity. Dr. Ayo Teriba, the CEO of Economic Associates, made this point while providing his perspective on “2022 Global Economic Shifts: Implications for Nigeria”.
According to him, the global liquidity glut means that investors are in search of investment opportunities across the world. “Nigeria must develop robust investment cases to attract capital.” He said the national economic management team should learn from India, Brazil, China, Saudi Arabia and Egypt by turning assets into wealth enablers.
He decried that Nigeria has over 2,000 national assets that are either idle or under-utilized across the country. Citing the examples of the five(5) countries he aforementioned, the economist noted that India and Brazil respectfully had functional investment portals. “While India has about 15,000 assets, Brazil has approximately 10,000 assets domiciled in their respective investment portals, with the promoters and investors all displayed. Both countries streamline the deal originator and consummation protocols.”
Dr. Teriba added that Saudi Arabia recently launched its investors portal to connect its assets to global liquidity, which is the path to prosperity. “The payoffs to investment-driven strategies are more encouraging than export-driven strategies.”
Looking at the economy, he pointed out that over the years, Nigeria’s approach has been to gain from export growth and even borrow in anticipation of improved export revenue. He said the model is failing because export revenues are low and debt costs are on an upward trend.
He added, “What the Nigerian economic management team needs to do now is focus on assets and stop borrowing against expected export revenue. They need to start borrowing against the value derived from the assets.”
The scholar said Nigeria should issue securitized debts and equity because Eurobonds are IOUs. He called on the government to announce equity and Sukuk issuance on assets that can generate future cash flows.