A new report has shown that the United States, South Africa and United Kingdom are Nigeria’s top three investors for Foreign Direct Investment in new projects.

The EY special report for World Economic Forum on Africa 2014 also shows that the FDI into the country in terms of new projects between 2007 and 2013 is $306bn.

While giving the breakdown of the FDI new projects in the country since 2007, the EY study states that the US has the largest share of the FDI at 14 per cent; South Africa, 12 per cent; UK, 11 per cent; India, nine per cent; France, five per cent; while other countries account for 49 per cent.

In terms of capital invested, however, Nigeria’s top investors for FDI are Canada, 31 per cent; US, eight per cent; Mauritius eight per cent; UK, seven per cent; South Africa, six per cent; while other countries account for 40 per cent.

The report reads in part, “Nigeria received six per cent of Africa’s total FDI for new projects and 11 per cent of capital invested since 2007. Although the average value of projects has declined, this reflects the growing diversification of investment and the Nigeria economy.

“The US, South Africa and the UK are the top three investors into Nigeria in terms of new projects. In terms of capital investment, there is still a strong bias towards the oil sector. However, here is marked shift, with investors from South Africa, the UK and India, for example, leading the way in investing in sectors like telecommunications, consumer products and automotive.”

The report notes that although 50 per cent of the FDI capital invested into Nigeria since 2007 has been into the capital intensive resource sectors (primarily oil), nearly 50 per cent of FDI projects are service-oriented.

According to the EY study, there has been particularly strong growth in investments into the telecommunications sector, with the sector attracting 23.9 per cent of FDI projects between 2007 and 2013.

It says growth in investment into other service sectors like financial services, consumer products, tourism and business services, further highlights the growing opportunities emerging in the sectors.

However, the EY study notes that corruption, threats to physical security and poor infrastructure are among those often cited as constraints to investments and doing business.

The report adds, “Arguably though, power shortages have been the biggest constraint to expanding investment and doing business. Nigeria has one of the lowest per capita national power supplies in the world, and most business rely on fuel-powered generators for reliable power.

“Recent progress made in the privatisation of the power sector should significantly increase levels of investment into electricity generation and distribution, and could transform the business environment in Nigeria.”

Source: Punch (by Oyetunji Abioye)