The Nigerian Investment Promotion Commission has disclosed in its report that investment commitments declined from $8.41bn in the first quarter of 2021 to $2.58bn within the same period in 2022.
This shows that investment commitments declined by 69.32 per cent from Q1 2021 to Q1 2022, according to the Report of Investment Commitments in Nigeria (January to March 2022) by the NIPC. According to the report, the investment commitments in Q1 2022 cut across 33 projects and five states, alongside the Federal Capital Territory.
In this period, the manufacturing sector attracted the highest investment commitments of $1.1bn, which is 45 per cent of the total commitments. It is followed by the agriculture sector with $0.64bn, which is 25 per cent of the total commitments.
Sokoto State attracted the highest investment commitments of $1.05bn, which is 41 per cent of the total commitments. It is followed by Lagos State with $0.88bn, which 34 per cent of the entire commitments. About $1.13bn investment commitments came from Nigerian investors, which is 44 per cent of the whole commitments. The United States investors made $1.01bn investment commitments, which is 39 per cent of the entire commitments in Q1 2022. Economists have decried the effect of insecurity on the economy, stating that it is discouraging investments in the country.
A 2021 journal article by Kosy Aghaulor, titled ‘Growth impact of insecurity on the Nigerian Economy,’ indicated that the security challenge in Nigeria constituted a threat to lives and property and had hindered business activities, discouraged local and foreign investors, consequently, stifling and retarding socio-economic development.
A professor of Economics at Godfrey Okoye University, Enugu State, Felix Onah, recently said insecurity in Nigeria had affected the cost of production, and the level of foreign investment and prevented companies from planning for the future.
He said, “The insecurity in the country is affecting the level of investment in the country and also the Gross Domestic Product. When companies leave the country, their production in the country is taken away and this would negatively affect the GDP of the country. Domestic investment is also adversely affected by the insecurity of the country, for example, farmers cannot go to the farm and even manufacturers cannot plan for the future. This would then lead to the reduction in agricultural and manufacturing output that would cause an adverse economic effect on the GDP.”