A total of $8.41 billion was recorded as investment announcements in Nigeria during the first three months of 2021 according to a report by the Nigerian Investment Promotion Commission (NIPC). This is about 75 per cent more than the value in the corresponding period in 2020 at $4.81 billion and about 8.4 per cent per cent higher than the fourth quarter of 2020, following the gradual return of investors’ confidence globally after the COVID-induced decline.
The investment promotion commission, in its report of a total of 15 projects tracked across 8 states in the period under review published on its website and obtained by business a.m on Thursday revealed that the top sectors were manufacturing (60%) with $5.08 billion, construction (34%) with $2.9 billion while Electricity (3%), Agriculture (1%) and other sectors (1%) all received $260 million, $110 million and $70 million respectively.
Furthermore, domestic investors were the most active during the period accounting for 35 per cent or $2.95 billion of the total announcements. This was followed by announcements from Morocco (17%) at $1.4 billion, the United Kingdom (3%) at $240 million and the USA (1%) invested $80 million while other international investors pooled a total of $3.74 billion which accounts for 44 per cent of the total investments tracked during the first three months of 2021.
Bayelsa State received the largest share of the announcements with $3.6 billion in mining and quarrying. Delta State recorded $2.94 billion worth of announcements in seaport construction and power transmission, Akwa Ibom State had $1.4 billion announced in mining and quarrying, and Lagos State with announcements totalling $0.26 billion in finance, insurance, and manufacturing. The report showed that the leading 4 destinations in the first quarter accounted for 97 per cent of the total investments announced as against 56 per cent in the corresponding period last year.
NIPC’s Intelligence nevertheless, gives a sense of investors’ interest in the Nigerian economy during the period announced. Thus, a cursory analysis of the data published by the strategic communications department of the commission on a four year stretch between the first quarters of 2017 and 2021 shows that the year 2018 saw a total of $29.55 billion flowed into Nigeria during the first quarter and was the highest investment tracked and received. Though, during that year, a total of $90.89 billion was announced as investments for 92 projects across 23 states of the federation including the FCT. Consequently, the Q1 2018 figure was 360 per cent higher than the Q1 2017 investment of $6.38 billion after the full year saw investment announcements to the tune of $66.35 billion for 112 projects across 27 states including the FCT.
Further afield, the first three months of 2019 and 2020 recorded swift declines in the negative from the 2018 figure by about 57 per cent year on year to $12.81 billion in Q1 2019 while Q1 2020 recorded a steep decline by 62 per cent year on year to $4.81 billion resulting from the uncertainties beclouding the investment landscape in Nigeria as a result of the coronavirus pandemic and the social and security unrests which played out in 2020 and consequently leading to waning investors decision and confidence in the Nigerian economy.
Elsewhere in the report, the year 2020 saw $16.74 billion in total investment announcements as actual foreign direct investment (FDI) inflow amounted to $2.6 billion for the execution of 63 projects across 21 states of the federation including the federal capital territory and the Niger Delta Region. Thus, the least investment during the year was received during the second quarter resulting from the imposed nationwide lockdowns by national governments and the slowdown in economic activities resulting in the receipt of $250 million in investment inflows. At the close of the third quarter from which there was the gradual easing of the lockdown restrictions as well as the resumption of economic activities, total investment surged to $3.92 billion while the last quarter recorded the receipt of $7.76 billion in total investments and largely driven by the technical exit of Nigeria’s economy from recession as well as the partial reopening of closed land borders for the flow of goods and services.
Meanwhile, the $4.81 billion received in Q1 2020 covered 19 projects across 14 states including the FCT and major investment was in the transportation sector (42%) while informatory and communication (33%) and mining and quarrying (21%) also had fair shares. Though, international investors from the US and South Africa dominated the list with $2 billion and $1.6 billion respectively while Kaduna (2.61bn), Nasarawa ($600m) and other states combined ($2.11bn) received the largest based on destination.