Pledges by domestic and foreign investors to projects in Nigeria rose 75 percent year-on-year to March 2021, the Nigerian Investment Promotion Council (NIPC) has said.
Proposed investments by the investors rose to $8.41 billion in the first quarter of this year from $4.81 billion reported in the comparable quarter of 2020, NIPC said in a report released on Thursday.
“This follows the gradual return of investors’ confidence globally after the COVID-induced decline,” it said.
Due to the COVID-19 induced lockdown and, consequently, a slowdown in global economic activities, investment pledges to Nigeria declined by 67 percent in the first half of 2020.
Proposed investments by investors dropped to $5.06 billion in the first half of last year from $15.15 billion reported in the comparable period of 2019, NIPC said in July.
NIPC said at the peak of the pandemic last year that the decline in Nigeria’s investment announcement was consistent with the expected downward pressure on investment flows, given the negative global economic impact of COVID-19.
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Shakirat Anifowoshe, a Lagos-based investment analyst said in July 2020 that it was not surprising, “given the risk-off sentiment in the global investment landscape.”
She had explained that new investors and investment announcements were expected to be at bay due to the risk-off sentiments across the globe as well as peculiar issues that frontier markets like Nigeria faced in turbulent times.
Analysis of the 2021 first-quarter report by NIPC shows that the manufacturing (60%), and construction (34%) sectors attracted the most investment pledges.
Bayelsa State was investors’ top destination choice as it received the largest share of the announcements with $3.6 billion in mining and quarrying. Delta State followed behind after it 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 S$0.26 billion in finance, insurance, and manufacturing made the list of investors’ top destination.
The NIPC report showed that the leading 4 destinations in the first quarter accounted for 97 percent of the total investments announced as against 56 percent in the corresponding period last year.
Domestic investors were the most active during the period accounting for 35percent of the announcements. This was followed by announcements from Morocco (17%), the United Kingdom (3%) and the US (1%).
NIPC’s Intelligence Newsletter publishes Nigerian investment-related news culled, from various sources.
The Q1 report by the tracking agency was based only on the 340 news articles cited in NIPC’s Newsletters from January to March 2021. While it may not contain exhaustive information on all investment announcements in Nigeria during the period NIPC said the report gives a sense of investors’ interest in the Nigerian economy.
“NIPC did not independently verify the authenticity of the investment announcements but is working on tracking the announcements as they progress to actual investments,” it said.
According to International Growth Centre, a British-funded research organization that aims to promote sustainable growth in developing countries, attracting quality investment that links foreign investors into the local host country economy helps to contribute to decent and value-adding jobs and enhancing the skill base of host economies while boosting the competitiveness of domestic firms and enabling their access to markets.
“Nigeria needs to do the hard work of policy reform, right enabling environment to attract investment and drive recovery,” Ladé Araba, seasoned development finance professional with over 17 years of experience and Managing Director for Africa at Convergence Finance, said.
