Nigeria’s capital importation increased by $1.21 billion in the first semester of 2023, despite the fact that 28 states did not attract any foreign investment, according to a National Bureau of Statistics report on Nigeria’s capital importation.
Year after year, total capital imports dropped by 30.42% to $2.16 billion from the previous $3.11 billion in the same period of last year. As insecurity and the difficult business climate continue to affect foreign direct investments in the country, Nigeria has become increasingly dependent on foreign loans to increase its capital importation.
Foreign direct investments in the form of loans increased by 17.43 per cent to $1.211 billion in the first six-month period of 2023, compared to $1.03 billion in the corresponding period of the previous year.
The National Bureau of Statistics (NBS) reported that in the second quarter of 2023, foreign investors made up 81.28% of all capital importations made into the country. Other investments comprised the majority of the total, with Portfolio Investment making up 10.37 per cent of the total, followed by Foreign Direct Investment at 8.35 per cent.
The production sector attracted the highest amount of foreign investment, with an influx of USD 605.04 million, accounting for 58.73 per cent of the total. The banking sector followed, with USD 194.58 million, or 18.89 per cent, followed by Shares at USD 68.63 million, or 6.66 per cent.
The majority of foreign investors were concentrated in a few cities, with Lagos and Abuja being the most popular destinations.
According to a recent report by the World Bank, foreign direct investment (FDI) into Nigeria has decreased due to a lack of foreign exchange, security issues, and structural issues.
Akpan Ekpo, an economics professor at The PUNCH, said that foreign investors are “crisis-shy” and that the security crisis in some parts of the country has reduced their trust.
“The states have not attracted any investment for obvious reasons,” he said. “When you have insecurity, you can’t expect to attract foreign investment if your place isn’t safe. They won’t come.”