32 of Nigeria's 36 states failed to attract one dollar in FDI during the first quarter of 2022

AS many as 32 of Nigeria's 36 states did not attract one dollar in foreign direct investment (FDI) during the first quarter of 2022 according to a recent report just published by the National Bureau of Statistics (NBS).

Apparently, only Lagos, Oyo, Katsina and Anambra and the Federal Capital Territory (FCT) attracted any FDI during the first three months of the year. According to the NBS’ Nigeria's capital importation, the total value of capital imported into Nigeria in the first quarter of 2022 stood at $1.6bn, compared with $2.2bn in the preceding quarter.

This represented a 28.09% quarter-on-quarter decrease. When compared to the corresponding quarter of 2021, capital importation decreased by 17.46% from $1.9bn.

According to the NBS, the largest amount of capital importation by type was received through portfolio investment, which accounted for 60.87% ($957.58m). This was followed by other investment which accounted for 29.28% or $460.59m, while FDI accounted for 9.85 % or $154.97m of the total capital imported.

By destination of investment, Lagos State remained the top destination with $1.1bn accounting for 71.16% of total capital investment into Nigeria. This was followed by investment into the FCT valued at $446.8m or 28.40% of the total.

Anambra Oyo and Katsina states followed, with each raking in $4.1m, $2m and $700,000, respectively. Categorisation of total capital investment by bank shows that Standard Chartered Bank Nigeria ranked highest with $543.20m or 34.53%, followed by Citi Bank Nigeria with $439.03m or 27.91% and Stanbic IBTC Bank with $251.52 or 15.99%.

Professor Jonathan Aremu, an Ecowas common investment market consultant, said: “It’s simple, it’s because they don’t have the attracting factors. The factors that attract foreign investment are not available in those 31 states. One thing about investment is that it is crisis shy.

"Investment doesn’t go to places where there are crisis. 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.”

He added that 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, the deputy president of the Lagos Chamber of Commerce and Industry, cited factors such as insecurity and the economic crisis experienced in Nigeria in recent years as major reasons why investors may not consider the country an ideal destination.

Mr Idahosa said: “We know what to do but we simply have refused to do it. We knew 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 off 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 the Nigerian Police Force. Same thing with the Los Angeles Police Department. We know what to do, it’s just the political confidence to do it.”