In the midst of Nigeria’s $1.21 billion foreign borrowing to bolster capital importation in the first half of 2023, the nation witnessed a stark divide, with 28 states failing to attract foreign investments, as revealed in a report by the National Bureau of Statistics on Nigeria’s Capital Importation.
During this period, Nigeria experienced a notable 30.42% year-on-year decline in total capital importation, dropping from $3.11 billion in the first half of 2022 to $2.16 billion in 2023.
Factors like insecurity and a challenging business environment have continued to hamper foreign direct investments into Nigeria, leading the nation to increasingly rely on foreign loans for capital importation.
Foreign investments, primarily in the form of loans, surged by 17.43% to $1.21 billion in the first half of 2023, compared to $1.03 billion during the same period in 2022.
Delving into the composition of foreign investments, the NBS reported, “In Q2 2023, other investments took the lead, accounting for 81.28% ($837.34 million) of total capital importation, followed by Portfolio Investment at 10.37% ($106.85 million) and Foreign Direct Investment at 8.35% ($86.03 million).”
Among sectors, the production sector reigned supreme with an inflow of $605.04 million, constituting 58.73% of total capital imported in Q2 2023, followed by the banking sector at $194.58 million (18.89%) and shares at $68.63 million (6.66%).
Remarkably, only nine states—Lagos, Abuja, Adamawa, Akwa Ibom, Anambra, Ekiti, Niger, Ogun, and Ondo—succeeded in attracting foreign investors to Nigeria, indicating a regional disparity in investment appeal.
In recent developments, the World Bank has highlighted a decline in foreign direct investment in Nigeria, attributing it to challenges such as limited foreign exchange availability, security concerns, and structural issues.
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