Ensuring the ease of doing business, quality infrastructures across board, putting policies in place to improving trade and investment are the hallmarks of making any country the investor’s destination. Nigeria over the years has emphasized the need to go in this direction.
The significance of FDI has been brought to bear again with the recent update by the United Nations Conference on Trade and Development Trends Monitor stating that Nigeria earned the total of $2.6billion of the global volume.
The report has it that global FDI collapsed in 2020, falling 42% from $1.5 trillion in 2019 to an estimated $859 billion. This type of collapse was last seen in the 1990s and is more than 30% below the investment trough that followed the 2008-2009 global financial crises.
Taxmobile. Online has it on good authority that, despite projections for the global economy to recover in 2021, UNCTAD expects FDI flows to remain weak due to uncertainty over the evolution of the COVID-19 pandemic. The organization had projected a 5-10% FDI slide in 2021 in last year’s World Investment Report.
Nigeria’s $2.6 billion cut of the total FDI in 2020 is a downward trend from the $3.3 billion it attracted a year earlier. South Africa, a major competitor for FDI inflows in Sub Saharan Africa attracted less with $2.5 billion.
According to the latest data from the National Bureau of Statistics (NBS), the total value of capital importation into Nigeria stood at $1.46 billion in the third quarter (Q3) of 2020. This represents an increase of 12.86% compared to Q2 2020, and -74.03% fall from Q3 2019.
The largest amount of capital importation by type was received through other investment, which accounted for 43.75% ($639.44million) of total capital importation, followed by FDI, 28.38% ($414.79million), and Portfolio Investment 27.87% ($407.25million) of total capital imported in Q3 2020.
Egypt recorded the highest influx of FDI among African countries with a total inflow of $5.5 billion representing a whopping 38% drop. Despite the drop, Egypt remains the top investment destination in Africa.
Twist of fate
If the report is anything to go by, the decline in FDI was more formidable in developed countries where flows plummeted by 69% to an estimated $229 billion.