Nigeria economy in 2020 attracted a total Foreign Direct Investment (FDI) of $2.6 billion, the United Nations Trade Association (UNCTAD) has said.
The country however, overtook South Africa in FDI inflows, a major competitor for in Sub Saharan Africa, which attracted less with $2.5 billion.
But, the success recorded by Nigeria is lower than that of 2019 as FDI declined from $3.3 billion.
Africa recorded a total FDI of $38 billion in 2020 representing a drop of 18 per cent from $46 billion recorded in 2019, according to the report.
In the report, Egypt recorded the highest influx of FDI among African countries with a total inflow of $5.5 billion representing a whopping 38 per cent drop.
Despite the drop, Egypt remains the top investment destination in Africa.
Egypt continues to remain the top destination for FDI in Africa.
According to the UN report, “FDI flows to Africa declined by 18 per cent to an estimated $38 billion, from $46 billion in 2019.
Greenfield project announcements, an indication of future FDI trends, fell 63 per cent to $28 billion, from $77 billion in 2019.
The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.
Nigeria has failed to push the needle on FDI investments in the last decade attracting more portfolio inflows compared to direct investment, which is viewed as more stable and required to boost economic growth.
FDI-related inflows are mostly targeted at the real sector funding investments in infrastructural development, technological innovation, manufacturing, health care, and Agriculture.
According to the United Nations, lower oil prices and the pandemic induced locked down significantly affected Nigeria’s ability to attract inflow.
The report said: “FDI inflows to Sub-Saharan Africa decreased by 11 per cent to an estimated $28 billion. Inflows to Nigeria declined to $2.6 billion from $3.3 billion in 2019.
“Lower crude oil prices, coupled with the closure of oil development sites at the start of a pandemic due to movement restrictions, weighed heavily on FDI to Nigeria.”
The report also indicates that South Africa attracted about $2.5 billion during the year about 50 per cent less than the $4.6 billion it attracted a year earlier.
FDI to South Africa almost halved to $2.5 billion from $4.6 billion in 2019.
Nigeria lost a massive Google investment after the internet giant investing $140 million. preferred to set up in South Africa
“However, several large projects were announced including an investment by Google (United States) of approximately $140 million in a fibre optics submarine cable and an additional investment of $360 million by Pepsico (United States) to expand the capacity of Pioneer Foods,” it added.
The media observed a stark difference between the data captured for Nigeria as FDI by the UN compared to what is recorded by the National Bureau of Statistics.
Third-quarter NBS data released in November 2020 indicated Nigeria had attracted about $777.6 million, which if annualised comes to about $1 billion.
It suggests Nigeria may have attracted about $1.5 billion in the last quarter of the year, which is highly unlikely.
A recent report also points to about $4.3 billion in Corporate Deals in the country out of which $1 billion is recognised as FDI-related investment according to our categorization methodology.
According to the report, global FDI flows fell by as much as 42 per cent in 2020 from about $1.5 trillion to an estimated $859 billion.
According to the report, the drop was mostly recorded in developed economies where FDI fell by as much as 69 per cent to $229 billion.
However, developing economies where FDI is badly needed, recorded a 12 per cent decline representing about 72 per cent of a share of the global FDI.
Most of the inflows went to China with about $163 billion, the largest recipient in 2020.
India’s FDI of $57 billion was higher than the entire $38 billion attracted by African countries.
