- as Lagos attracts $4.97 billion
The latest capital importation data released by the National Bureau of Statistics (NBS), shows that 29 states in Nigeria suffered a huge blow as foreign investors dumped them in the third quarter.
According to the Bureau’s data, states that joined the zero foreign investment league in Q2 include Ondo, Delta, Akwa Ibom, Niger, Bauchi, Kwara, Borno, Katsina, Kano, Imo, Cross River, Benue and Adamawa.
This means in Q2 2019, 29 states in Nigeria were ignored by foreign investors.
However, the number of states with zero foreign investment increased again in the third quarter.
Essentially, in Q3 2019, foreign investment in Nigeria in the third quarter of 2019 dropped to $5.36 billion from $5.82 billion recorded in the second quarter with Lagos and Abuja maintaining the top spots with the biggest foreign investment inflows into the country in the period.
The largest amount of capital importation by type was received through portfolio investment, which accounted for 55.88% ($2.99 billion) of total capital importation, followed by Other Investment, 40.39% ($2.16 billion) of total capital, and then Foreign Direct Investment, which accounted for 3.73% ($200.08 million) of total foreign inflows within the period.
Nigeria’s biggest commercial hub, Lagos, attracted 92.7% of the total capital importation received in the country, amounting to $4.97 billion.
Abuja, which has been to Lagos, received only $381.19 million, down from $1.67 billion in Q2 2019. This means the Federal capital witnessed a major decline in foreign investment inflows, as capital importation in the state dropped by 77%.
Eight states that received capital inflow include Lagos ($4.97 billion), Abuja-FCT ($381.19 million), Ogun ($7million), Oyo ($1.71 million), Edo ($830,000), Kaduna ($250,000), Kano ($160,000) and Rivers ($30,000).
Notably, in the first quarter, the foreign investment inflow in the country Nigeria spread across 19 states (plus FCT), with 17 recording zero foreign investment.
Meanwhile, going into the second quarter of 2019, most states that received foreign investments in Q1 2019, were badly hit with zero foreign investments.
The sharp decline in foreign investment is a huge setback for states and this means most states in Nigeria are increasingly becoming unviable for investments.
A major concern that arose from the latest capital importation report is the continued decline in Foreign Direct Investment (FDI), which reflects declining investors’ confidence in the Nigerian economy.
For states in Nigeria, a major critical downside is that, as the states continue to lose out on foreign investments, it suggests a downturn in the economy of the states. This may spur unemployment rates and low economic activities across the country.