According to a report released by Nigerian Investment Promotion Commission (NIPC), Nigeria recorded $8.4bn in investment announcement inflows in Q1-2021 of which $5.5bn was pledged by foreign investors. In comparison, the remaining $2.9bn came from domestic investors. The sum committed by foreign investors was 27.5% lower than the $7.5bn announced in Q4-2020.

This corresponds with the NBS capital importation report from 2020, which showed that total foreign investments in Nigeria suffered a considerable blow. In 2020, the overall value of capital inflows decreased by 59.6% to $9.7bn (vs $23.9 in 2019). The NBS report also revealed that only 11 states and FCT were able to attract foreign investment in Q1-2021, compared to 25 states in Q4-2020. Pre-covid, Nigeria’s Foreign Direct Investment (FDI) saw a 48.0% drop in 2019 to $3.3bn before dropping even further to $2.6bn in 2020. Although the fall in 2020 can be attributed mainly to the covid-19 pandemic disrupting economic activities, the impact of underlying problems, such as current instability, inadequate infrastructure and unfriendly government policies, cannot be underestimated. Foreign investment is further deterred by the country’s high inflation rate, insecurity, and tax structure.

The Federal Government must improve the business operating environment by bridging the infrastructure deficit, driving FX reforms, and reinforcing fiscal sustainability, all of which will improve private-sector ingenuity and fuel investments. However, as it stands, the country’s inability to generate stable revenue and the worsening of its debt profile will further serve as significant headwinds to achieving this objective.