Thirty-two states failed to attract capital importation in the second quarter of 2022, according to a Foreign Direct Investment data released by the National Bureau of Statistics on Wednesday.
Of the 36 states and the Federal Capital Territory, only Lagos, Abuja, Anambra, Ekiti, and Kogi witnessed capital inflows.
Cumulative capital inflows totalled $1.54bn. Lagos ($1.05bn) attracted the most capital in the period under review, followed by Abuja at $453.95m, Anambra at $24.71m, Kogi at $2m, and Ekiti at $500,000.
According to the data from the NBS, the states had been attracting enough foreign investments.
In the first quarter, only six states attracted a total of $1.57bn as capital importation.
The states included Abuja, Anambra, Katsina, Lagos, Oyo, and Plateau.
In its ‘Nigerian Capital Importation’ report for Q2, 2022, the nation’s statistics body said, “The total value of capital importation into Nigeria in the second quarter of 2022 stood at $1.54bn from $875.62m in the corresponding quarter of 2021, showing an increase of 75.34 per cent.
“When compared to the preceding quarter, capital importation decreased by 2.40 per cent from $1.57bn. The largest amount of capital importation was received through Portfolio Investment, which accounted for 49.33 per cent ($757.32m). This was followed by Other Investment with 41.09 per cent ($630.87m) and Foreign Direct Investment accounted for 9.58 per cent ($147.16m) of total capital imported in Q2 2022.
“Disaggregated by Sectors, capital importation into banking had the highest inflow of $646.36m amounting to 42.10 per cent of total capital imported in the second quarter of 2022. This was followed by capital imported into the production sector, valued at $233.99m (15.24m), and the financing sector with $197.31m (12.85 per cent).”
The United Kingdom ($781.05m) was the largest source of capital importation, followed by Singapore and the Republic of South Africa which brought in $138.58m and $122.26m respectively.
In an earlier interview with The PUNCH, an ECOWAS Common Investment Market consultant, Prof. Jonathan Aremu, had said, “It’s simple. It’s because they don’t have the attractive factors. The factors that attract foreign investment are not available in those 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 potential of that kind of economy, investors will wait and see whether the factors that can guarantee predictable and sustainable investments will finally be available.”
The Co-Managing Partner and Chief Executive Officer, Comercio Partners Asset Management, Tosin Oshunkoya, recently said foreign investors’ attraction to the Nigerian economy was waning.
He said, “The ravaging trend of inflation across major developed economies has triggered hawkish policy responses such as interest rate hikes, which tend to spur capital repatriation from frontier economies such as Nigeria while discouraging foreign capital inflows into the local economy, particularly through foreign portfolio investments.
“Furthermore, the impact of global headwinds does not entirely absolve the local economy of blame, as persistent tightness in the currency market and unabated insecurity remained a fundamental threat to foreign investors in the review quarter.”
