The latest Capital Importation data from the National Bureau of Statistics shows that foreign investments in Nigeria’s manufacturing sector decreased by $326 million (54%) to $279.5 million in the third quarter of 2023 from $605 million in the second quarter.
According to The PUNCH, the report’s further research, despite the large decline, the production sector had the biggest capital importation in Q3 2023.
The finance industry came in second, bringing in $127.9 million in capital imports during the period under review.
Foreign investments in Nigeria have recently declined, according to NBS data, with investments falling by 35% from $392.5 million in the fourth quarter of 2022 to $256 million in the first quarter of 2023.
The Manufacturers Association of Nigeria expressed concern that government policies have aided capital flight in the industry.
MAN had warned in successive MCCI reports that the increasingly tough business environment, caused by rising energy costs, a lack of access to capital, and complex taxation, among other factors, had reduced investments in the sector.
In a recent interview, the President of the Manufacturers Association of Nigeria, Francis Meshioye, stated that if power distributors implement the anticipated tariff hike, more foreign manufacturing companies may leave the country.
He went on to say that some international industrial enterprises had already left Nigeria as a result of the power issue, as well as the unpredictability of the country’s foreign exchange rate prior to its recent unification.
The Manufacturers Association of Nigeria expressed concern that government policies have aided capital flight in the industry.
MAN had warned in successive MCCI reports that the increasingly tough business environment, caused by rising energy costs, a lack of access to capital, and complex taxation, among other factors, had reduced investments in the sector.
In a recent interview, the President of the Manufacturers Association of Nigeria, Francis Meshioye, stated that if power distributors implement the anticipated tariff hike, more foreign manufacturing companies may leave the country.
He went on to say that some international industrial enterprises had already left Nigeria as a result of the power issue, as well as the unpredictability of the country’s foreign exchange rate prior to its recent unification.
“Manufacturers provide almost all infrastructure by themselves, manufacturers supply water, power, security, and other services outside of major roadways. So, when you look at it, you realize how high the cost of doing business is,” Meshioye stated.
The considerable reduction in foreign investment in the third quarter of the year was attributed to the exit of certain multinationals, including GlaxoSmithKline (which left Nigeria in August) and Unilever, which ceased operations in the home and skin care categories in April.
In the fourth quarter of 2023, more multinational manufacturers such as Sanofi-Aventis and Procter & Gamble also winded down operations in Nigeria.
