The United Kingdom and South Africa led the list of source countries for Nigeria’s capital inflows between January and September 2021, jointly accounting for 64.9% of the total capital importation recorded by Nigeria in the review period. This is according to the capital importation report, released by the National Bureau of Statistics (NBS).
Nigeria attracted a sum of $4.51 billion as capital inflows in the 9-months period of 2021, representing a 48% decline compared to $4.61 billion recorded in the corresponding period of 2020. When compared to the pre-pandemic era, capital importation declined by 78% compared to $20.19 billion recorded in the same period of 2019.
Meanwhile, most of the funds came into the country through the United Kingdom and South Africa, both jointly accounting for 64.9% of the total funds. Nigeria received $2.16 billion from the United Kingdom in the review period, which accounted for 47.9% of the total inflows.
Similarly, fellow African country and the second-largest economy on the continent, South Africa, which plays host to a number of large corporations operating in Nigeria, invested a sum of $768.4 million into Nigeria in the same period. However, their investments into the African giant’s economy have dwindled in recent times, partly attributable to the economic doldrums caused by the covid-19 pandemic, which has caused uncertainties around the investments and seen Nigeria attract lesser foreign investments.
Others on the list of country sources include; USA ($357 million), Singapore ($241 million), UAE ($227 million), and the Netherlands with $182 million. A further breakdown of the capital importation report shows that foreign direct investments dropped from $414.79 million recorded between January and September 2020 to $340.55 million in the review year.
Also, foreign portfolio investment (FPI) reduced in the review period by 46% year-on-year from $5.1 billion in 9M 2020 to $2.74 billion. Other investments declined to $1.43 billion from $2.73 billion recorded in the previous year. Loans received during the period was $1.3 billion, representing 29% of the total capital inflows. Only 9 states received investments while Lagos gets giant share
In the period under review, only about 9 states received foreign inflows, with Lagos State receiving the giant share, accounting 85% of the total inflow with $3.84 billion. Abuja received $662.85 million, which represents approximately 15% of the total inflows recorded in the period. Notably, Lagos State and Abuja more or less accounted for all the investments destination recorded in the 9 months period, jointly representing 99.8% of the total inflow.
The number of states who received foreign investments in the period, indicates that 28 states did not attract any form of investments. This gives an image of the attractiveness of some states in the country to foreign investments. It now appears that most funds coming into the country, finds itself into the economic hub and the capital of Nigeria, hereby leaving other states short of foreign investments, which would further hinder the development of the states.