Foreign investors shun insecurity, investment climate, among other factors
By Jeph Ajobaju, Chief Copy Editor
Kaduna in the North and Rivers in the South were among 32 states foreign investors shunned in the first quarter ended March 2022 (Q1 2022) during which only Lagos, Oyo, Katsina, Anambra, and the Federal Capital Territory (FCT) made the cut.
Nigerian Capital Importation Q1 2022 report by the Nation Bureau of Statistics (NBS) shows foreign investment dropped 28.09 per cent from $2.2 billion in Q4 2021 to $1.6 billion.
It decreased 17.46 per cent from $1.9 billion in Q1 2021.
The largest capital importation by type was Portfolio Investment, which was $957.58 million (60.87 per cent), followed by Other Investment $460.59 million (29.28 per cent), and Foreign Direct Investment (FDI) $154.97 million (9.85 per cent).
Lagos retained its top slot in Q1 2022 with $1.1 billion (71.16 per cent), followed by the FCT $446.8 million (28.40 per cent), Anambra $4.1 million, Oyo $2 million, and Katsina $700,000.
The states that did not attract investment are
- Abia
- Adamawa
- Akwa Ibom
- Bauchi
- Bayelsa
- Benue
- Borno
- Cross River
- Delta
- Ebonyi
- Edo
- Ekiti
- Enugu
- Gombe
- Imo
- Jigawa
- Kaduna
- Kebbi
- Nasarawa
- Kogi
- Kwara
- Kano
- Niger
- Ogun
- Ondo
- Osun
- Plateau
- Rivers
- Sokoto
- Taraba
- Yobe
- Zamfara
Investment by bank
- Standard Chartered Bank – $543.20 million (34.53 per cent).
- Citi Bank Nigeria – $439.03 million (27.91 per cent)
- Stanbic IBTC Bank – $251.52 million (15.99 per cent)
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Financial and investment experts explain below why some states do not attract investment at all and why what others get is little, per reporting by The PUNCH.
Jonathan Aremu (ECOWAS Common Investment Market consultant)
“It’s simple. It’s because they don’t have the attracting factors. The factors that attract foreign investment are not available in those 32 states.
“One thing about investment is that it is crisis shy. Investment doesn’t go to places where there are crises.
“Why? Because investors want stability and predictability of their investments, particularly having returns on their investments.
“When an economy is witnessing what we are witnessing currently, despite the investment potentials of that kind of economy, investors will wait and see whether the factors that can guarantee predictable and sustainable investments will finally be available.
“The twin factors of a good investment climate as well as a good perception of that climate would have to be present for investors to develop the confidence to bring investments into the country.”
Gabriel Idahosa (Lagos Chamber of Commerce and Industry Deputy President)
“We know what to do. We simply have refused to do it. We know that we should have put in place a state police system around this country maybe five or 10 years back, before Boko Haram became a monster.
“If we had state police in Borno State when Boko Haram was a very small, tiny group of ruffians creating local problems, perhaps we never would have heard of Boko Haram.
“Generally, the police system should be taken out of the Exclusive list; so we can have state police, and municipal police, just like we have in other federations.
“The New York Police Department has a budget that is probably higher than [that of] the Nigerian Police. Same thing with the Los Angeles Police Department. We know what to do, [what is needed] is just the political confidence to do it.”