The President, Institute of Chartered Accountant of Nigeria, Alhaji Kabir Mohammed, has urged developing nations, including Nigeria, to harmonise their investment laws in order to encourage more foreigners to invest in their economies.
He spoke during the annual International Conference on Accounting, Finance and Management held in Ile-Ife, Osun State.
The ICAN boss explained that Gross Domestic products and the economies of developing countries would grow by creating avenue for improved foreign direct investments.
He said, “Emerging countries that desire to attract foreign direct investment must have business legislations that are clear and have unique interpretations. Where laws are inadequate, urgent democratic measures should be taken to enact them. Such laws can even be on sub-regional basis. Indeed, the harmonisation of investment laws and incentives across sub-regions will facilitate the attraction of investments.
“For sufficient capital, emerging economies like Nigeria whose GDP is rising, will need more inflow of foreign direct investment to sustain their development. Over the past decade, six of the world’s 10 fastest growing countries have been in Africa. In eight of the past 10 years, Africa has grown faster than East Asia, including Japan. Even allowing for the knock-on effect of the northern hemisphere’s slow-down, the IMF expected Africa to grow by six per cent in 2012 and nearly six per cent in 2013.”
According to him, the growth rate of economies in Africa has accelerated progressively since the beginning of the last decade.
Mohammed noted that the International Monetary Fund projection had been attained in Africa, stressing that poverty rates had continued to decline despite the excruciating impact of the recent food, fuel and financial crises, as well as the Euro zone crisis with its associated fiscal consolidation on low-income African countries.
He expressed optimism that the current move by many countries towards International Financial Reporting Standards would ensure greater transparency and reliability of financial statements in Africa but lamented the poor governance.
The expert urged financial professionals to be efficient in the collection and channelisation of savings into most desirable and productive investments that would stimulate capital formation and accelerate the process of economic development.
Mohammed said, “Most emerging economies, for instance, Nigeria, are currently suffering from poor governance, unsophisticated financial institutions, illiteracy and poverty. As a result, safe for oil and other executive activities, the rich resource endowments of these countries are still grossly under-banked while communication, transportation and energy generating facilities are not fully developed.
“Professionals must assist the continent to prioritise its development strategies such that it can address its long-standing structural weaknesses, which have not only lowered the long-term growth of most countries on the continent but have increased their economic vulnerability while undermining efforts to reduce poverty.