Unlocking Investment and Finance in Emerging Markets and Developing Economies (EMDEs) – by the World Bank Group. Find attached for your perusal.

1. Unlocking Investment and Finance in Emerging Markets
and Developing Economies (EMDEs) – Final Project.
As a finance official in my country Nigeria, I have been tasked with developing national financing
strategy to help augment the level of finance being generated in the country from domestic,
international, private and public sources. Nigeria is seen to be overly dependent on the revenue
generated from the Oil and Gas sector and has failed to harness the great potential from other
sources available to it.
Some of these underutilized sectors and sources of revenue include the agricultural sector,
manufacturing sector, Solid Mineral Sector, and Export of non-oil items. Apart from this, we
have other avenues that have continued to lag such as the collection of taxes, the effective fight
against corruption, mismanagement of revenues and the pursuit of hoax projects that does not
in any way benefit to the economy, the social welfare of the people and the environment.
According to the Central Bank of Nigeria, the estimated finance required for the socio economic
development of the country in order to achieve and surpass the 2030 Sustainable Development
Goals (SDG) and beyond will be in excess of N25 Trillion per annum in direct investments to the
infrastructural development of the country. These areas of development include Power,
transport (Roads, Railways, Airports, and Waters ways) Health, (Hospitals, clinics and Primary
medical centers across the 776 Local governments’ of the country)
Presently Nigeria receives about $3.3Billion as ODA from international development
organizations and countries such as the International Development Association (IDA), The
United States of America, The United Kingdom, The French Government, Global Fund, EU
institutions, UNICEF, and the African Development Fund. However, when we take a close look
at the breakdown of these funds, we would realize that 35% of these funds were designated to
the welfare sectors as humanitarian aid due to the ongoing ravages of terrorism in the North
Eastern region of the country. Other major flows of about 33% went to Health and Population
while about just 6% were directed at economic developmental activities. This goes to show that
the ODA received in terms of loans, concessions or grants are not being effectively utilized for
development based on the issues on ground such as security which has to be addressed in
order to lure in investors.
The sources of finance available to Nigeria as a country for developmental purposes are quite
numerous ranging from domestic to international sources from the public and private sectors.
For example. as of 2017, the fact that Nigeria commands slightly over $3.3Billion from ODA
remittances as seen in figure 1 is quite worrisome and could be better with the significant
portion of about $804million coming from IDA. This goes to show that there is room for potential
growth if there is more conducive environment supported with good government policies to
reduce bureaucracy for ease of doing business that can then encourage the IDA to convince
investors to come into.

2. Figure 1: Total ODA receipts by Nigeria in 2017
Apart from Bilateral funds, another major source of finance is the foreign direct investments
(FDIs) which are also subject to an enabling environment with stable political landscape.
Investors want to be sure that their investments will stay safe while getting high returns. Other
sources which are domestic and public include the collection of taxes and its measurement to
the GDP.
In order to access these sources of finance more effectively, there is a need to improve the
public private sector relationships by engaging more in dialogue in order to develop a medium to
long term goals in encouraging the private sector to invest more with the assurances that there
investments would be secured hence improving the business environment as done by
Bangladesh who developed a rolling five year plan for mobilizing finance and unlocking finance
for future developments. Some of the actions to be taken to further unlock and assess finance
include:
Effective tax collection
Fairness and equity has been one of the major issues faced by tax payers who feel the rich,
powerful and highly connected citizens don’t pay enough, hence putting more pressure on the
rest of the population who has to bear that burden. According to the United Nations, out of
Nigeria’s Labor force of 77million, only about 10% pay taxes which have seen our tax to GDP
ratio remain at an abysmal 6%. Other factors include narrow tax base, tax evasion and chronic
tax avoidance.
Corruption, Weak Institutions and Policies.
Nigeria ranks as one of the most corrupt countries in the world. Although there has been a
recent drive by the present administration to change this position and perception, there is still a
lot that is meant to be done in order to achieve this as some citizens are seen as untouchable
hence walking freely while the masses pay for their deed though the lack of basic amenities and
infrastructural development.

3. There has also been reported cases of corruption and diversion of tax payments by highly
placed tax officials which has become a trend that needs to be checked. Same goes for other
revenue generating institutions such as the Nigerian Customs service and Nigerian National
petroleum Corporation.
Strong Judicial System
The Judicial system of the country has been seen to be weak and corrupt in some instances
whereby there seems to be no evidence of justice, equity and fairness. This tends to discourage
foreign direct investments as investors are not certain that the law will run its cause in the event
of litigations and law suits which might have a negative impact on their assets. An impartial
Justice system is required to give the required confidence to investors.
Security and Terrorism.
The war on terrorism and banditry has to be taken more serious and handled more decisively as
this has derailed the investment opportunities that should have come into the country through
foreign direct investments (FDI) and ODA. However, the narrative has been negative hence
scaring off investors while donor agencies would rather donate to the immediate welfare of the
displaced citizens and rebuilding the ravaged region rather than actual infrastructural
development across the country.
Development of The Mines and Mineral Sector|
Nigeria has several mineral resources some of which include Gold, Bitumen, Diamonds, Coal,
Zinc and Limestone. For example, Nigeria has the second largest deposit of bitumen in the
world however; this resource is hardly being harnessed. Reports suggests that if this is
harnessed, Nigeria has a country would be able to derive more revenue to rapidly aid
development. However, the reality is that we have enabled and supported illegal mining for the
last few decades which favors a small portion of the political elite. Also, the recent bandits
conflicts in Zamfara State in the North West region of country was tied to illegal mining of Gold
which led to kidnappings and banditry activities before being checkmated by the Federal
Government by suspending mining activities.
Hence, we approached the World Bank Group (WBG) having identified the major obstacles to
assessing and unlocking finance domestically and internationally as stated above. With our on-
going willingness to resolve these challenges and to execute short to long term goals, the WBG
through MIGA and in collaboration with the IDA and IFC have decided to support our
developmental initiatives by providing and guaranteeing loans, investments in the public sector
through the IDA and the private sector though the IFC. In view of this, risk mitigation instruments
to be used will be spearheaded by the MIGA on investments totaling $250Billion within the next
five (5) years. Financial Agreements between the Nigerian Government and General Electric
(GE) will be signed in collaboration with IDA, IFC & MIGA for power generation infrastructural
development while public private partnerships with state owned Chinese construction
companies to build roads and railways will be enacted on a build, operate and transfer basis.