This could be startling, and it ought to be: in the first quarter of 2022, the volume of foreign direct investment into Nigeria dropped comparatively against the 2021 figures. Right off the heels of the coronavirus blighted year, FDI brought into the country was $2.2 billion. This year, the figure is half of that: $1.6 billion. Worse still, only four out of Nigeria’s thirty-six states, Lagos, Anambra, Oyo and Katsina (as well as the Federal Capital Territory) saw any type of FDI in that time frame.
According to the National Bureau of Statistics’ Nigerian Capital Importation Q1 2022, the total value of capital imported into Nigeria in the first quarter of 2022 stood at $1.6bn from $2.2bn in the preceding quarter, showing a decrease of 28.09 per cent.
When compared to what was obtained in 2021, capital importation decreased by 17.46% from $1.9 billion and the largest volume brought in was portfolio investment which accounts for 60.87% ( $957 million). Gospel Obele joins Tolulope Adeleru-Balogun on Business Edge to discuss the low volume of FDI and how it could impact Nigeria’s economic recovery and growth.
As an economist, Gospel Obele sees the large picture when issues like this happen and provide clear insight. For example, Nigeria’s general reality explains why foreign direct investment would drop. “When it comes to FDI or any form of investment commitment in an economy, what investors look at are the more subtle but most critical factors that drive growth,” he says, adding that the recovery and growth that the country and its citizens have touted are numbers growth – not the enablers and drivers of the economy such as infrastructure and human capital development.
Watch the first half of Business Edge above.