The Edo State Government has called on all stakeholders including evaluators of states’ inflows of Foreign Direct Investments (FDIs) to develop innovative tools for tracking FDIs into Nigeria as forex has posed challenges resulting in inability to ascertain true amount of inflows.
The call was made by the managing director, Edo State Investment Promotion Office (ESIPO)-Ease of Doing Business Secretariat, Kelvin Uwaibi while speaking to journalists on the inflow of Foreign Direct Investments (FDIs) into Nigeria in the last few years.
Uwaibi noted that Certificate of Capital Importation (CCI) used to be the major determinant of foreign direct investments but in recent times, foreign investors have decided to use other means like investing through a domestic investor in the same line of business adding that this means has been working for them as the challenges in accessing forex poses difficulties which investors have tried to circumvent.
According to him, “All foreign investors in Nigeria require a document known as the Certificate of Capital Importation (CCI) in order to freely repatriate the proceeds of the investment in respect of which the CCI was issued. This applies whether the investment takes the form of debt, equity or an investment in other securities such as bonds and treasury bills. The issuance of a CCI is straight forward: it is issued by an authorized dealer (which is a Nigerian bank licensed by the Central Bank of Nigeria (CBN) to deal in foreign exchange) at the time that the investment is made. Its issuance is subject to documentation but is entirely routine and issued following conversion of the foreign currency investment into Naira”
“A CCI serves as documentary evidence that an investor actually brought foreign currency into Nigeria for the purpose of making investments in Nigeria and permits an investor to repatriate proceeds from its investment or its capital in the event of the partial or complete sale of its investment.
“But these days, the issues with forex exchange have resulted in investors looking for alternative means of investing without the CCI. One way is to look for a domestic investor which is in the same line of business. And this has been working for them.
“This situation has made it impossible for evaluators to properly capture the FDIs in Nigeria. So, I expect the CBN to develop multiple tools to track FDIs because investors now invest through the domestic investors in the same line of business.
“Edo State was smart and strategic during Covid 19 pandemic. We decided on our investment attraction drive plan to focus our attention on attracting about 70% of domestic investment (DI) and the diaspora. For example, Edo has attracted DIs and FDIs which perhaps, the evaluators would not have noticed.
“In 2021/2022, we had DIs and FDIs in both agriculture and energy sectors. Companies like AMO FARM Poultry Processing Plant located at Obayantor, Ikpoba-Okha Local Government Area of Edo State, ShopRite (Benin Mall) at Sapele Road in Benin City, Fayus Oil Palm Company and recently, Prime Agro Seed and other companies from Asia. These are FDIs attracted to Edo State just recently.
“One of the benefits of the Certificate of Capital Importation (CCI) is to enable tracking of investments across the banks. That way, the FDIs will be tracked for record purpose but this is no longer effective because of the issues with forex exchange in Nigeria currently,” Uwaibi noted.
