Foreign Direct Investment: FG attracts over $31.82bn in 33 months

…More regulatory, institutional reforms required to boost investors confidence

Abimbola Abatta, Uthman Salami, and Ariemu Ogaga

Data from the National Bureau of Statistics (NBS) has revealed that the Federal Government attracted $31.82bn in 33 months from Foreign Direct Investment (FDI).

According to the NBS data, the 33-month FDI came from the United Kingdom, the United States, South Africa, the United Arab Emirates, the Netherlands, and Mauritius.

The six countries accounted for 83.32 per cent of the total capital of $38.18bn imported into Nigeria from over 100 countries from January 2019 to September 2021.

While the UK accounted for the highest foreign inflow of $17.34bn, the US accounted for $5.79bn, South Africa ($3.99bn), UAE ($1.80bn), Netherlands ($1.68bn), and Mauritius ($1.09bn).

The NBS revealed that capital importation data is obtained from the Central Bank of Nigeria and includes imported physical capital, such as equipment, and financial capital importation.

It added that capital importation comprises three main investment categories, namely foreign direct investment, foreign portfolio investment, and other investments.

It said FDI includes equity and other capital, while FPI includes equity, bonds, and money market instruments; ‘other investments’ include trade credits, loans, currency deposits, and other claims.

More regulatory, institutional reforms required to boost investors confidence — Muda

Reacting to the development, Economist and Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the Federal Government requires accelerated policy reforms to attract better foreign direct investment.

According to him, “Our ability to attract foreign capital, especially FDI, will depend on how well we position ourselves. The critical question will be around expected returns on investment. Over all, it is the investment climate quality that will make the difference.

“We need to ensure an acceleration of necessary reforms to make Nigeria a much better investment destination. We need policy reforms, regulatory reforms and institutional reforms, among others.

“We should accelerate the foreign exchange reforms; we need to undertake trade policy reforms to liberalise trade in sectors of weak comparative advantage; we need regulatory reforms to make regulations more investment friendly.

“We need to create new opportunities in the public private partnership (PPP) space, especially in infrastructure. We need to see more privatisations of public enterprises.

“It is important as well to quickly fix the ravaging insecurity in the country. All of these are crucial to boost investors confidence.”