The decision of the Britons to exit the European Union has thrown global economy in turmoil with uncertainties as to its impacts on the Nigerian economy and the world at large.
It is not new that Nigeria holds significant economic position globally, and her comparative advantage is well value in the western world and beyond. While the majority of economists has emphasized the effect of Brexit on the Nigerian economy, it’s imperative to underscore Nigeria new position post-Brexit.
In May, the European Union approached Nigeria to increase her exports, rubber, cocoa and palm oil to the region after sensing potential Brexit, a request most economists frown at and insisted Nigeria needs technology to process her raw materials if diversification agenda most be actualized.
“It is simply wrong to continue to import finished products of our agricultural produces at higher cost, and yet complain of capital flight, high unemployment rate, high inflation rate and weak exports.”
It could also be recalled that in early June the European Union has asked Nigeria to sign the Economic Partnership Agreement with attractive offers, including a €6.5 billion (about N1.4tn) Development Programme to provide funding for projects linked to trade, industry, energy and transport infrastructure in the region.
But the president of the Manufacturers Association of Nigeria, Dr. Frank Jacobs, had advised against the partnership fearing that it might eventually turn Nigeria into a dumping ground for superior products from more advanced nations in the partnership.
While in 2011, the U.K. and Nigeria agreed on a joint mandate to increase trade between the two countries from £4 billion to £8 billion by 2014. The target was archived and projected to reach £20 billion by 2020 if the government remains proactive and support businesses.
Presently, both the European Union and the U.K. are struggling to further their business reach and economic allies as their economies continue to shrink by the day. But with China closer in striking a better deal with Nigeria than any of the two Europe giants, Nigeria is once again a competitive business destination, if the Nigerian government seized the opportunity.
However, to evolve from imports dependent economy to a more diversify economy Nigeria needs to position itself as an investment destination. This is why China deals standout, but the government has a role to play by reducing interest rates to stimulate real economic growth and create jobs, providing loan facilities to encourage local participation and genuine small and medium enterprises, security of lives and properties to attract foreign investors and formulate effective business policies.
As long as businesses are paying between 25 – 30 percent on business loans, FIRS and AMCON will continue to add to the unemployment rate by shutting down businesses for defaulting on payments. While, consumer spending and new job creation nosedive. Creating a negative business environment and further daunting whatever prospect the nation holds going forward.
Regardless of investment opportunities in the nation, no businesses or investors will invest in an economy with weak economic outlook and uncertainties, rather they will continue to do business without long-term prospect while the economy plummet.