A lecturer at the University of Agriculture, Umudike in Abia, Dr John Ihendinihu, has said that the recent rebasing of the nation’s gross domestic product would stimulate foreign direct investment. Ihendinihu, who is the Head of the Department of Accounting, told the News Agency of Nigeria (NAN) in Umuahia on Thursday that the rebasing looked attractive to investors.
“The rebasing looks attractive to the global market, so we are likely to have an increase in foreign direct investment into the country,’’ he said.
He said the rebasing would also enhance the Federal Government’s borrowing capacity.
Ihendinihu, an associate professor of accounting, also warned the government to be prudent in maximising the anticipated benefits of the rebasing. Identifying foreign borrowing as one of the benefits, he said that “if the money is not properly utilised in productive ventures, the country’s debt-servicing ratio would increase over time”.
He urged the Federal Government to take advantage of the rebasing to reactivate and reposition the real sector.
Ihendinihu called on the government to invest in critical infrastructure, especially the energy sector, to stimulate sustainable economic activities. “There is not much that can be achieved with the GDP rebasing if the government fails to invest in infrastructure that drives economic development. That is what the government should be focusing on,’’ Ihendinihu said, adding that “small scale industries cannot thrive except there is substantial investment in infrastructure”. Ihendinihu, however, said that the nation’s current security challenges remained a major threat to the prospects of the rebasing.
According to him, “even if there is foreign direct investment into the country; if the environment is not conducive, it would last for a short while and investors would begin to divest’’.
He advised the government to engage in public education and enlightenment on the importance of the rebasing and its attendant implication for the economy. The lecturer admonished the government to “jubilate with caution’’ over the rebasing. He contended that the new GDP, which placed Nigeria ahead of other African economies, did not tally with the living standard of Nigerians.
Also speaking, a lecturer in the department of economics of the university, Rev. Fr. Innocent Ekeagwu, said the rebasing was appropriate. Ekeagwu said the GDP had been under-estimated in the past, given the high level of economic activities in the country.
He said that the living standard of Nigerians had witnessed an appreciable improvement over the years. The economist also argued that the country had recorded significant economic transformation, especially under democratic rule. He advised the Federal Government to sustain its present economic policies, saying that their full implementation would stimulate further growth in the GDP.
