Revenue diversification huge challenge to investments in Nigeria – Yemi Cardoso

Dr Yemi Cardoso, a financial and development expert, says revenue and its diversification are key challenges that have affected investments in Nigeria.

Cardoso, a former chairman of the Board of Directors of Citibank Nigeria and guest lecturer at the fourth Arthur Mbanefo Lecture Series in Lagos, noted that revenue challenges had contributed to Nigeria’s monolithic economy for too long.

The theme of the lecture put together by the Arthur Mbanefo Digital Research Centre (AMDRC) University of Lagos, is: Impact Investing; The Way of the Future.

According to him, the topic is apt because it tends to review the country’s financial trends as it concerns investments.

He noted that there was a lot more money looking for where they could be invested than they were readily available entities that could take advantage of it.

Speaking further, he said that impact investment was the way to go in today’s economy, adding that it had the potential to transform the country’s economy by addressing social and environmental challenges, while also generating financial returns.

The guest lecturer stated that for impact investment to effectively contribute to positive social and environmental impacts, it should also be able to maintain credibility.

He noted that as more capital became available for them, the financial markets needed a clear definition of expected practice and the terms of participation in the market.

He, however, noted that despite the challenges, impact investment was gaining momentum in Nigeria, as there were several key players in the country’s impact investing ecosystem.

“There is a lot more money for investing than readily available entities that can take advantage of it. Now, we are at the stage where we do need as much as possible, to generate revenue and diversify this.

“The lecture today is basically focused on impact investing, the future of Nigeria. This is apt because we can see like around the world, impact investing today, is estimated to contribute over one trillion dollars in activities worldwide.
“This is in terms of investing, in terms of assets under management and a lot more.

“In Nigeria, that ecosystem is still developing and in spite of that, we have assessed under management, regularly coming in. In 2021, it was 2. 6 billion dollars.

“Now, for some people, that may appear like a lot of money but I can assure you, that particular amount of money can go hugely if the right ecosystem is in place and the right things are done,” Cardoso noted.

According to him, research has shown that most people come into the economy, trying to invest and cannot because they do not see enough of the transactions as well as people who are in the right position to take advantage of investments coming in.
As a result, he noted, there was more supply of investment, than there were investable transactions.

“And so, that whole narrative has to change and this can be achieved by an appreciation of many out there, who don’t know that this market is there to get an awareness and start taking advantage of it.

“It will also change by a regulatory framework that will make it easy for those who want to come in and invest to invest and get their money over time. So, that regulatory framework has to change and be more enabling for the money that wants to come into Nigeria.

“Also, it will change where there is seriousness by those who will utilise the money. Oftentimes, it is not intentional on seriousness but the standards are very high and there has to be a way of bringing those particular entities to world-class standards,” he stated.

The guest lecturer noted that although obstacles remained in the field of impact investing in the country, there was a need to support the development of a robust pipeline of impact enterprises to absorb incoming capital.

He further called for curate and intermediate investments that would harness opportunities existing in untapped sectors.

Cardoso also emphasized the need to explore reforms such as tax incentives for social enterprises to drive enterprises’ scalability, competitiveness and attractiveness, among other actions.

In his vote of thanks, Chief Arthur Mbanefo, donor of the centre to the university, stated that the theme sought to further proffer solutions to the ease of doing business in the country.

According to Mbanefo who turned 93 on June 11, there is a need to put modalities in place to encourage local investors, rather than allow foreign ones to make an impact.

” It calls for critical thinking. Investing is the way to go. So, the choice of the lecture topic is apt, we must reflect on that. If we do not understand and make use of all that the lecturer has said here today, then we have a long way to go.

“It is important that we begin to wonder why we are where we are. And that is why I will love a compendium of these lectures, four of them in number and pass it on to those that will benefit from it, whether I am here, or after I may not be around,” he stated.

The Vice Chancellor of the university, Prof. Folashade Ogunsola in her opening remarks, noted that education remained the foundation of all forms of development.

She noted that there was a need for the country to go back to where it belonged.

Ogunsola who was represented by Prof. Ayodele Atsenua, Deputy Vice-Chancellor (Development Services) said that the centre’s lecture series had been impactful.

She said the institution would continue to support its programmes, irrespective of its meagre resource.

She also appealed for more collaboration between the university and the centre in a bid to encourage and attain its objectives.