According to a report from the National Bureau of Statistics (NBS), Nigeria’s capital importation dropped by 20.47% to $5.32 billion in 2022 from $6.70 billion in the preceding year.
The report also revealed that capital inflows decreased by 8.53% to $1.06 billion in the fourth quarter of 2022 compared to $1.15 billion in the preceding quarter.
This is not good news for Nigeria as it suggests that the country is losing its appeal to foreign investors. The report showed that only nine states attracted any form of foreign capital in 2022, with Lagos accounting for $3.61 billion of total inflows while the Federal Capital Territory (FCT) attracted $1.62 billion.
The other states that attracted foreign capital were Akwa Ibom, Anambra, Ekiti, Katsina, Kogi, Ondo, Oyo, and Plateau.
The report also showed that 27 states failed to attract any dollar as foreign capital inflow throughout the year. These states included Abia, Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, and Edo, among others. This is despite the efforts of state chief executives to travel abroad in search of foreign investors.
The largest capital inflow for Q4 was received from the other investment type, which accounted for $691.23 million or 65.17% of inflows during the review period. This was followed by portfolio investment, which amounted to $285.26 million or 26.89%, as well as Foreign Direct Investment (FDI), which stood at $84.23 million or 7.94% of total receipts.
When disaggregated by sectors, capital importation into the production sector recorded the highest inflow of $392.54 million, representing 37.01% of total capital imported in Q4. This was followed by capital imported into the banking sector, valued at $255.45 million, representing 24.08%, and telecoms with $168.27 million or 15.86% of total inflows.
The report revealed that the United Kingdom ranked top with $455.24 million, accounting for 42.92% of total inflows in the review period, while the Republic of South Africa and the United Arab Emirates accounted for $119.31 million or 11.25% and $116.82 million or 11.01% respectively.
However, by the destination of investment, Lagos State maintained the top spot with $600.54 million, accounting for 56.62% of total capital investment in the country while the Federal Capital Territory (FCT) attracted $424.50 million representing 40.02% of inflows.
It is essential for Nigeria to address the issues that are discouraging foreign investors from investing in the country. The government must take urgent steps to create a conducive environment for foreign investment. This could be achieved by improving infrastructure, reducing corruption, and promoting transparency in the business environment. Only then can Nigeria hope to attract the kind of foreign investment that it needs to achieve sustainable economic growth.