The Nigeria Employers’ Consultative Association (NECA) has said Foreign Direct Investment (FDI) and Capital Importation will remain low till the third quarter of 2021.
Its Director-General, Dr Timothy Olawale, made this known in a statement in Lagos, quoting the latest capital importation report released by the National Bureau of Statistics.
Olawale said Nigeria only received the sum of 9.68 billion dollars from capital inflows in 2020, as against 23.99 billion dollars received in 2019.
He said in the report, the inflow of 9.68 billion dollars represents 59.6 per cent decline when compared to 23.99 billion dollars recorded in 2019 and 42.4 per cent reduction compared to 16.81 billion dollars recorded in 2018.
“This low rate of FDI and Capital Importation is likely to continue till Q3:2021,” the NECA director-general said.
Olawale said some of the factors responsible for low rate include, poor investment climate characterised by overly stringent government policies, bureaucratic bottlenecks for securing permits and a weak legal framework.
Others, according to him, include the prolonged state of insecurity in the country; lack of economic diversification, and the nation’s huge infrastructure deficit.
“Additionally, uncertainty around the COVID-19 pandemic’s evolution and the global investment policy environment will continue to affect FDI inflows globally in 2021.
“For developing countries such as Nigeria, the prospects for this year are a major concern.
“Traditionally, capital importation or FDI will flow to areas or countries where there are guarantees of return on investment.
“Thus, an environment like Nigeria without much guarantees will naturally be a disincentive to investors,” Olawale said.