Nigeria sets up committee to review bilateral investment treaties

The Nigerian government recently announced the formation of a nine-member committee tasked with reviewing bilateral investment treaties and the Nigerian Investment Promotion Commission Act. This move comes amidst efforts to attract more foreign direct investments into the country. Johnson Chukwu, the CEO of Cowry Asset Management, shed light on the challenges facing the committee and the broader investment landscape in Nigeria. Chukwu expressed his skepticism about the efficacy of bilateral investment treaties alone in attracting foreign investments. He pointed out that while these treaties serve the purpose of protecting investors and reducing double taxation burdens, they are not sufficient to make Nigeria an attractive investment destination. He highlighted the need for a conducive business environment, including a robust legal framework, infrastructure development, market size, and regulatory reforms to entice foreign investors. One of the major concerns raised by Chukwu is the uncertainty surrounding the sanctity of contracts in Nigeria. He emphasized the importance of a reliable legal system, efficient dispute resolution mechanisms, and clarity in contractual outcomes to instill confidence in investors. Additionally, he underscored the significance of addressing challenges such as poor infrastructure, regulatory inconsistencies, and shrinking market size to enhance Nigeria's appeal to foreign investors. Furthermore, Chukwu discussed the government's approach to subsidy removal in the petroleum industry. He debunked the notion of substantial savings from subsidy removal, stating that the revenues generated have been distributed among various tiers of government. He clarified that there is no distinct fund amounting to 5.4 trillion Naira set aside from subsidy savings for developmental initiatives. Chukwu highlighted the importance of transparent fiscal management and prudent resource allocation to foster sustainable development. In conclusion, Chukwu emphasized the need for comprehensive reforms beyond reviewing bilateral investment treaties to stimulate foreign direct investments in Nigeria. He emphasized the critical role of a conducive business environment, effective legal frameworks, infrastructure development, and market expansion in attracting foreign capital. While the committee's task is challenging, addressing these fundamental issues is paramount to positioning Nigeria as a preferred destination for foreign investments.