Nigeria drew a total of $5.97 billion in investments during the first half of 2024, according to a capital importation report released by the National Bureau of Statistics (NBS) on Tuesday.
The figure marks significant foreign capital inflow into the country despite ongoing economic challenges.
The report highlighted that the total capital importation for the second quarter (Q2) of 2024 amounted to $2.6 billion, which represents a 22.85% decline compared to the $3.38 billion recorded in the first quarter (Q1) of the year.
The NBS noted, however, that when compared to the same period in 2023, Q2 2024 saw a substantial 152.81% increase from the $1.03 billion recorded in Q2 2023, showcasing a notable improvement in investment activity year-on-year.
“In Q2 2024, total capital importation into Nigeria stood at $2,604.50 billion, higher than $1,030.21 billion recorded in Q2 2023, indicating an increase of 152.81%.
“In comparison to the preceding quarter, capital importation declined by 22.85% from $3,376.01 million in Q1 2024,” the NBS report stated.
Despite the gains, Nigeria continues to face hurdles in attracting foreign investments. Currency volatility, rising inflation, and escalating energy costs have stifled business operations, causing concern among investors.
To counter the challenges and restore investor confidence, the Central Bank of Nigeria (CBN) has implemented aggressive monetary policies, including raising the benchmark interest rate to 27.25%.
However, the efforts have yet to produce the expected surge in investments, especially in critical sectors like manufacturing and production.
The report indicates that portfolio investments dominated the capital inflows, accounting for $1.4 billion or 53.93% of total foreign investments in Q2 2024. Other investments followed closely with $1.1 billion, contributing 44.92% of the total.
However, Foreign Direct Investment (FDI) remains alarmingly low, contributing just $29.83 million, or a mere 1.15% of the total capital imported.
The banking sector emerged as the largest recipient of foreign investments, with $1.12 billion, representing 43.15% of total capital importation.
This was followed by the production and manufacturing sector, which attracted $624.71 million, while the trading sector received $569.22 million.
In terms of geographic distribution, Lagos State retained its position as the top investment destination, receiving $1.37 billion, or 52.52% of total capital inflows in Q2 2024.
Abuja (FCT) followed closely, with $1.24 billion (47.48%). Ekiti State, the only other state that recorded capital importation, received just $0.0003 million during the quarter.
The United Kingdom was the largest source of foreign capital in Q2 2024, contributing $1.12 billion, which accounted for 43.01% of total capital inflows.
The Netherlands and South Africa also made significant contributions to Nigeria’s foreign investments during the period.
While the capital inflows in the first half of 2024 reflect growing investor interest, the decline in Q2 compared to Q1, coupled with the low level of FDI, points to underlying economic issues that need to be addressed.
