Lagos accounts for 85% of foreign capital inflows to States in 2021

Governor Babajide Sanwo-Olu

Nigeria’s economic hub, Lagos state received the giant of the total foreign capital inflow to various states in the country, accounting for 85 per cent of the total inflow with $3.84 billion in 2021.

According to the capital importation report, released by the National Bureau of Statistics (NBS), only about nine states received foreign inflows, with Abuja trailing a far second with $662.85 million, which represents approximately 15 percent of the total inflows recorded in the period.

The number of States who received foreign investments in the period, indicates that 28 states did not attract any form of investments. This gives an image of the attractiveness of some states in the country to foreign investments.

It now appears that most funds coming into the country, finds itself into the economic hub and the capital of Nigeria, thereby leaving other states short of foreign investments, which would further hinder the development of the states.

Nigeria attracted a sum of $4.51 billion as capital inflows in the nine-month period of 2021, representing a 48 per cent decline compared to $4.61 billion recorded in the corresponding period of 2020.

When compared to the pre-pandemic era, capital importation declined by 78 per cent compared to $20.19 billion recorded in the same period of 2019.

Meanwhile, most of the funds came into the country through the United Kingdom and South Africa, both jointly accounting for 64.9 per cent of the total funds.

According to the capital importation report by NBS, Nigeria received $2.16 billion from the United Kingdom in the review period, which accounted for 47.9 per cent of the total inflows.

Similarly, fellow African country and the second-largest economy on the continent, South Africa, which plays host to a number of large corporations operating in Nigeria, invested a sum of $768.4 million into Nigeria in the same period.

Others on the list of country sources include; USA ($357 million), Singapore ($241 million), UAE ($227 million), and The Netherlands with $182 million.

A further breakdown of the capital importation report shows that foreign direct investments dropped from $414.79 million recorded between January and September 2020 to $340.55 million in the review year.

Also, foreign portfolio investment (FPI) reduced in the review period by 46 per cent year-on-year from $5.1 billion in 9M 2020 to $2.74 billion. Other investments declined to $1.43 billion from $2.73 billion recorded in the previous year. Loans received during the period in review was $1.3 billion, representing 29 per cent of the total capital inflows.

However, their investments into the African giant’s economy have dwindled in recent times, partly attributable to the economic doldrums caused by the covid-19 pandemic, which has caused uncertainties around the investments and seen Nigeria attract lesser foreign investments.