Foreign investment inflow into Africa’s largest economy declined by $18.6bn in four years (2019-2022), The PUNCH has learnt.
Also in the review period, eight states in the federation failed to attract any form of foreign investment
The affected states are Taraba, Yobe, Zamfara, Bayelsa, Ebonyi, Gombe, Jigawa and Kebbi.
Foreign investments refer to revenue inflow from external sources into an economy either as direct capital investments, equity, cash or goods.
According to data published by the National Bureau of Statistics, Nigeria attracted $23.9bn as foreign investments in 2019.
By 2020, the figure declined to $9.6bn. It declined again in 2021 to $6.7bn and once more to $5.3bn in 2022. This implies a decline of $18.6bn during the four-year period.
However, the most populous black nation in Africa raked in about $46bn in the four years period.
Lagos State led with the highest foreign investments ($35.4bn), while Federal Capital Territory followed with foreign inflow of $10bn.
Further analysis of the data showed that the vast majority of the states that underperformed with regard to attracting foreign investments were states in the Northeast political zone.
In the North-East, the decade-long fundamentalist insurgency led by Boko Haram and its spawns have caused around 350,000 deaths, displaced over three million residents and destroyed public infrastructure in a region already blighted by poverty and poor socio-economic outcomes.
Experts have cited the protracted conflicts in the region as a putative reason why investors have often shied away from Northeastern Nigeria. The conflicts have ultimately left a devastating mark on the informal sector of the region’s economy.
While speaking with The PUNCH on the possible reasons behind the declining investments in the country, a professor of economics at the University of Uyo, Akpan Ekpo blamed Nigeria’s macroeconomic realities.
On the zero investment inflow recorded by a majority of the Northeastern states, Ekpo described foreign investments as crisis-shy and cited the insecurity crisis that has enveloped the region as the reason investors have kept their distance.
Ekpo said, “The states didn’t attract any investments for obvious reasons. With the insecurity, there is no way you will attract foreign investment when your place is not secure. They will not come.”
On his part, the Deputy-President of the Lagos Chamber of Commerce, Gabriel Idahosa, blamed Nigeria’s post-military constitution that took away the regions’ power to self-determine their economic fate.
Idahosa’s argument was hinged on the fact that prior to the 1966 coup, which produced the military government of the late Aguiyi Ironsi, the regions had political and economic autonomy, as opposed to the strict federal structure of governance that we have today which ensures monthly federal allocations to states.
According to a United Nations report, Nigeria ranks as the African country to have suffered the most economic losses, including investments, to acts of terrorism.
According to the report, Nigeria, Mali, Somalia and Libya, have accounted for 94 per cent, or US$103bn lost to terrorism in Africa since 2007.
Of the 18 focus countries, Nigeria suffered by far the highest economic impacts of terrorism, accounting for 89 per cent of the total US$109bn bn cost over the ten-year period, the report noted.
The economic impact of terrorism for Nigeria, at US$97bn, was over 22,000 times greater than that for Burkina Faso, which has suffered the lowest total absolute economic impact of the eighteen focus countries.
Nigeria’s impact is also almost 19 times greater than that of Libya, which has had the second-highest cost of terrorism over the ten-year period.
