Nigerian companies attracted investments worth $19.1 billion from local and foreign investors in the first nine months of 2021, surging by 113% from $8.98 billion recorded in the corresponding period of 2020.
This is according to the information contained in the report of investment announcements, released by the Nigeria Investment Promotion Commission (NIPC). According to the report, the investments recorded in the review period were comprised of 62 projects across 16 states in the federation.
Meanwhile, the increase recorded in the review period is only significant due to a favourable base period of 2020, which was affected by the covid-19 pandemic.
Notably, when compared to years before the pandemic, $19.1 billion is lower in contrast to $24.44 billion recorded in 2019, $73.07 billion in 2018, and $41.71 billion in 2017. It is worth noting that they are all 9-month periods (January to September) of their respective years.
A further breakdown of the report shows that $8.41 billion was recorded in Q1 2021, $1.69 billion in Q2, while $8.99 billion was recorded in the third quarter of the year.
What happened in Q3 2021?
The manufacturing sector attracted the highest investments of $3.76 billion in the review period, accounting for 42% of the inflows recorded in the quarter.
The electricity sector received investments valued at $2.24 billion, representing 25% of the total funds, while Information and Communications sector accounts for 23%, with $2.06 billion.
Most of the funds were directed to the economic hub of the nation, Lagos State which received a sum of $7.29 billion in form of investments in Q3 2021, accounting for 82% of the total.
Rivers State followed with $300 million, which is 3% of the total, while Oyo State received $230 million in the review quarter.
In terms of the source of the funds, 47% of the total investments to a tune of $4.23 billion was sourced locally, 22% ($2 billion) was from South Korea, 16% ($1.46 billion) from South Africa, while $0.52 billion was sourced from Spain.
In Q3 2021, Nigeria recorded the highest quarterly investments since Q3 2019, surging by 129% compared to $3.92 billion recorded in the corresponding period of 2020. However, a cursory look at the trend shows a general downturn in the number of investments received by Nigeria both from local and foreign investors.
Top deals between January and September 2021
Brass Fertiliser and Petrochemical Company tops the list with investment of $3.6 billion in the month of January, accounting for 18.8% of the total investments recorded in the review period. The investment was channelled to Bayelsa State and the fund was sourced internally from Nigeria, China, and Europe.
Second on the list according to the report was Mercury Maritime Concession Company with $2.9 billion, representing 15.2% of the total investments recorded between January and September 2021. The fund was sourced locally from Nigeria and invested in Delta State.
Nigerian National Petroleum Corporation (NNPC) ranks third with investment of $2.5 billion in the month of August, accounting for 13.1% of the total investments recorded in the review period. The investment was channelled to Lagos State and the fund was sourced internally from Nigeria.
Egbin Power Plc recorded investments worth $2 billion, representing about 10.5% of the total investments. The fund was sourced from South Korea and was invested in Lagos State.
MTN Nigeria Communications invested a sum of $1.46 billion in August 2021, which was also moved into Lagos State. The fund came into the country from South Africa.
Why this matters
Nigeria needs significant investments into the economy to achieve its desired growth, especially foreign and local direct investments. Corporate Nigeria and other startups have intensified efforts to attract investment in 2021 both from local and foreign investors.
So far in 2021, a total of $19.1 billion investment has been recorded in Nigeria, higher than $16.74 billion recorded in the whole of 2020.
However, it is still far below the amount recorded before the covid-19 pandemic. While the recent increase shows a level of positivity, Nigeria needs to improve on her ability to attract investments into the economy.