Ten States in Nigeria, Foreign Investors abandoned 27 States, as Lagos and Abuja attracted $5.8 billion

Foreign investment into Nigeria in the second quarter of 2019 dropped to $5.82 billion compared to $8.48 billion recorded in the first quarterMeanwhile, twenty-seven (27) states in Nigeria suffered a huge blow, as foreign investors abandoned them.

The breakdown: According to the latest capital importation data released by the National Bureau of Statistics (NBS), Lagos and Abuja have consistently maintained positions as the leading states with biggest foreign investment inflows into the country.  

[READ MORE: Lagos and Abuja remain top destinations for Foreign Investment in Nigeria]

Foreign investors shipped in $4.13 billion to Nigeria’s commercial city, Lagos, while Abuja received $1.67 billion. Both states accounted for almost 100% of the entire capital inflow into the country.   

  • Notably, in the first quarter, the foreign investment inflows into Nigeria received spread across nineteen states (plus FCT), while 17 states were ignored by foreign investors. 
  • Meanwhile, going into the second quarter of 2019, most states that received foreign investments in Q1 2019, were badly hit with zero foreign investments.  
  • According to the Bureau’s data, states that joined the zero foreign investments league include Ondo, Delta, Akwa Ibom, Niger, Bauchi, KwaraBornoKatsina, Kano, Imo, Cross River, Benue and Adamawa.  
  • However, two states that did not receive any investment in Q1 2019 attracted some investors. Edo State received $1.4 million, while Nassarawa attracted just $100,000.  
  • This means 27 states in Nigeria were ignored by foreign investors.  

Sectors’ Performance: The breakdown of foreign investment into Nigeria in Q2 2019 shows that portfolio investment remains Nigeria’s biggest foreign investment inflows with 73.76% ($4.29 billion) of total capital importation. Other investments accounted for 22.41% or $1.30 billion, while Foreign Direct Investment (FDI) investments are the least with $222.89 million or 3.83%.  

  • While foreign investment dipped in Nigeria in the first quarter, some sectors were the most hit. The banking sector which has been one of the biggest recipients of foreign investments in Nigeria suffered a huge set-back as it received $1.89 billion in Q2 2019, as against $2.85% billion it received in Q1.  
  • Other sectors that suffered huge drop in foreign investment inflows include shares, financing, and production.  
  • Meanwhile, foreign investment in the agriculture sector improved slightly from $124 million in Q1 to $169 billion received in Q2. Other sectors with improvement include hotels, fishing, servicing, transport and trading.  
  • On the sideline, four sectors received no foreign investments in Q2 2019 and these include brewing, drilling, tanning and weaving.  

[READ ALSO: 10 banks make about N120 billion software investment]

Why it matters: The sharp decline in foreign investment is a huge setback for states and this must have triggered the slow growth recorded in the Nigerian economy during the period. 

  • Essentially, the decrease in the inflow of Capital Imports into Nigeria, especially Portfolio Investment, indicated a negative development for the Nigerian Capital Market.  
  • Lower foreign portfolio evaporates the liquidity that can sustain market growth, particularly for stocks.  
  • Another critical concern is foreign direct investment, which declined in the second quarter. This suggests investors are not so confident in the economic prosperity of the country.  
  • Critical downsides to states are that, as the states continue to lose out on foreign investments, it suggests an economic downturn in these states which may spur unemployment rates across the country.   


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