By: Kexter E.A. Donald Jr.

President Tinubu’s pursuit of Foreign Direct Investors (FDI) may be akin to putting the horse before the cart. What he truly needs is not to squander taxpayers’ money on a wild goose chase for FDI but to focus on establishing a business-friendly environment, addressing political and economic stability, and implementing sound regulatory policies. Here are steps that can genuinely enhance a country’s attractiveness for FDI:

Foreign investors carefully evaluate several factors before deciding to invest in a country. Key considerations include:

  1. Economic Stability: Investors seek countries with a stable economic environment, low inflation, and a favorable GDP growth rate.
  2. Political Stability: A stable political climate is crucial. Investors prefer countries with low political risk and a government supportive of foreign investments.
  3. Regulatory Environment: An attractive feature is a transparent and business-friendly regulatory framework. Investors need assurance that regulations are clear, consistent, and protect their interests.
  4. Infrastructure: Well-developed infrastructure, encompassing transportation, communication, and energy systems, is vital for smooth business operations.
  5. Market Size and Potential: Investors evaluate the size and growth potential of the market. A large and expanding consumer base is often appealing.
  6. Labour Force: A crucial factor is a skilled and educated workforce that meets the business needs of investors.
  7. Tax Policies: Favorable tax policies, including reasonable corporate tax rates, can enhance a country’s attractiveness to foreign investors.
  8. Trade Policies: Countries with open and fair trade policies are more likely to attract foreign investment.
  9. Exchange Rates: Stable and predictable exchange rates reduce financial risks for investors.
  10. Legal System: An essential factor is a transparent and efficient legal system that protects property rights and enforces contracts.
  • Transparent Legal System: The necessity for transparency in the legal system underscores the importance of clarity, openness, and accessibility in the laws and regulations governing a country. This transparency is vital for providing investors with a comprehensive understanding of the legal framework, facilitating their navigation and operations within the established legal parameters.
  • Efficient Legal System: Efficiency in the legal system pertains to its ability to expeditiously and effectively handle legal matters. A legal system that minimizes delays and inefficiencies in legal proceedings is imperative for foreign investors who seek a business environment where legal processes are streamlined, ensuring timely resolutions and decisions.
  • Protection of Property Rights: The safeguarding of property rights is a cornerstone of a robust legal system. It ensures that investors’ rights to ownership and control of assets are well-defined, secure, and shielded from arbitrary actions. This protection is crucial for instilling confidence in investors, assuring them that their property rights are legally upheld and fostering a stable investment climate.
  • Enforcement of Contracts: Another critical facet of an effective legal system is its capacity to enforce contracts. This means that agreements entered into by parties are legally binding and can be upheld in a court of law. The ability to enforce contracts provides assurance to investors that their contractual agreements will be honored, reducing the risk of disputes and contributing to an overall environment of trust and reliability.

n summary, the insistence on a transparent and efficient legal system is integral to creating an atmosphere that not only attracts but also sustains foreign investment. It establishes a foundation of trust, clarity, and reliability, crucial elements for fostering a positive investment climate in any given country.

  1. Technology and Innovation: Countries that encourage and invest in innovation and technology are often preferred by investors.

Understanding and addressing these factors should be the priority to attract and retain foreign investment, rather than embarking on an uncertain and potentially fruitless chase for FDI.

By osibanews

Eliel Otote A is an Actor and Filmmaker, with a bias for journalism. He was a freelance feature writer with the Nigerian Observer in the 80's in Benin City, he also presented programmes on both radio and television. Eliel is the Editor and Publisher of OSIBAnews Network Magazine, of which this blog is an affiliate.

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