Foreign direct investment (FDI) inflows to Nigeria increased to $2.4 billion in 2020 from $2.3 in the previous year despite the COVID-19 pandemic that plagued global economies. This is contained in the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2021.
Nigeria emerged as the third largest economy, alongside Ethiopia ($2.4 billion), that attracted FDI inflows in Africa last year. Egypt was the largest recipient in Africa, even with a significant reduction of 35 percent to $5.9 billion in 2020; followed by the Republic of the Congo ($4 billion), while South Africa was fourth with $3.1 billion (a decline of 39 percent).
According to the report, the COVID-19 crisis caused a dramatic fall in FDIs in 2020 to push global FDI flows to $1 trillion from $1.5 trillion in 2019 (a decline of 35 percent). The report observed that the level of decline was almost 20 percent below the 2009 trough after the global financial crisis.
The UN body said FDI flows in Africa likewise declined by 16 percent to $40 billion — the lowest in 15 years — while FDI outflows fell by two thirds in 2020 to $1.6 billion from $4.9 billion in 2019.
With respect to Nigeria, the report read: “The average price of crude oil dropped by 33 per cent in 2020, and lower demand along with supply-side constraints caused by the slowdown in site development restricted FDI to the country in the first half of 2020. “Despite the pandemic, the long-term policy of FDI diversification appears to have had some impact.“One important greenfield investment ($66 million) in the non-oil economy was the construction of a manufacturing facility in the Lekki Free Trade Zone by Ariel Foods (Kenya).
