Investment in Nigeria Crashes by 80 Percent Between Q1 and Q2

The Federal Government has said in a disclosure that the total value of investments in the country slumped by a staggering 80 percent between the first and second quarter of the year.

The disclosure is contained in Nigeria's latest Report of Investment Announcement by the Nigerian Investment Promotion Commission (NIPC).

The report, which can also be seen on its website, showed that investments crumbled from $8.42 billion in the first quarter (Q1) of 2021 to $1.69 billion in the second quarter.

The decline in investments could be attributed to the weighty security crisis across the country, the Twitter ban, instability of the country’s foreign exchange market, the poor state of infrastructure and power supply, unfavourable investment climate, among others.

However, the total value of investments for the first half of 2021 is $5.05 billion higher when compared with the same period for the previous year where the total value of investments is $5.06 billion.

An analysis of the report revealed that the manufacturing sector attracted the highest investments with $5.9 billion or 58%, followed by construction with $2.9 billion or 29%, and electricity (which includes gas, steam, and air conditioning supply) with $680 million or 7%.

The information and communication sector came next with $410 million or 4% of the investments while others recorded $210m or 2%.

On the analysis of the destination of these investments, Bayelsa and Delta states attracted the most investments out of the 14 states that were listed, with $3.60 billion or 36% and $2.94 billion or 29% of the investments respectively.

They were followed by Akwa Ibom with $1.40 billion or 14% of the investments, Lagos with $0.70 billion or 7% of the investments while the remaining 10 states altogether attracted a total investment of $1.45 billion or 15%.

A further breakdown of the report also shows that Nigerian investors made the highest contribution of $3.29 billion or 33% of the total investment, followed by Morocco with a total investment of $1.40 billion or 14%, China with $950 million or 9% of the investments, the United Kingdom with $640 million or 6% of the investments and others with $3.82 billion or 38% of the investments.

Some of the companies and institutions involved in these investments include the Nigerian National Petroleum Corporation (NNPC), Flour Mills of Nigeria Plc, OCP of Morocco, Dahua Paper Company, Transcorp, West African ENRG, Konexa, PowerDot, SoftBank/Sequoia Capital China/IDG Capital, Others.

Also, the report showed that in the past 5 years, investment announcements recorded in H1 2021 decreased by $9.23 billion from the $19.34 billion recorded in H1 2017.