Nigeria’s Investments On Fixed Assets Hit $39.2bn
London, Feb. 19, 2020 (AltAfrica)-Nigeria’s Fixed Gross Investments rose by $39.2 billion in five years, from $59.6 billion recorded in 2016 to $98.2 billion in 2020.
Fixed Gross Investment records total business spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of raw materials, which provide the basis for future production.
Data sourced from the Financial Derivatives Company (FDC) show that Nigeria’s Fixed Gross Investments dropped to $55.3 billion in 2017 from the $55.3 billion recorded in 2016. In 2018, it rose to $80.2 billion and this growth was sustained in 2019 as it hit $87.4 billion and $98.2 billion in 2020.
The Chief Executive Officer (CEO) of the FDC, Bismarck Rewane, told participants at the recent Breakfast Meeting of the Lagos Business School, that Nigeria must lift aggregate investment from $87bn in 2019, being 19.5% of the country’s Gross Domestic Product (GDP) to above $110 billion in two to three years for impactful growth.
Rewane predicted that the fourth quarter GDP rate, which will soon be released by the National Bureau of Statistics (NBS) “will come in stronger than Q3 at 2.3% while inflation will increase to 13% after VAT hike and minimum wage effect.
To drive GDP growth higher, Nigeria must increase Fixed Gross Investments by investing heavily in infrastructure and other fixed assets in the coming years.
FDC observed that Nigeria’s audacious goals for the last decade are well articulated in the Vision 20:2020 blueprint which included to be amongst the top 20 largest economies in the world (currently ranked 27th with $449bn) and to achieve GDP growth above potential GDP (3.1%) and population growth (2.6%).
“It is difficult to judge the last decade as a success. However, the current administration is determined to make fundamental and structural changes. The new goals for this decade are people-oriented, specific and targeted,” FDC stated.
The Think Tank firm further observes that the plan of the present administration to life 100 million Nigerians out of poverty lacks specifics on the execution.
While FDC said Nigerians are split between being optimistic and skeptical about the economic prosperity for all in this decade, Bismark recommended increased Fixed Gross Investment to ramp up GDP.