Nigeria increased its capital imports in the first half of 2023 by borrowing $1.21 billion from abroad.
According to a National Bureau of Statistics on Nigeria Capital Importation report, 28 states were unable to entice any foreign investments during the period under review. In comparison to the same period in 2022, total capital imports in 2023 decreased by 30.42% annually, from $3.11 billion to $2.16 billion.
Nigeria has grown more dependent on foreign loans as a means of boosting capital imports as problems like insecurity and a challenging business environment continue to hinder foreign direct investments entering the country.
Foreign loans increased from $1.03 billion in the same time of 2022 to $1.21 billion in the first half of 2023, an increase of 17.43%.
According to the NBS, other investments accounted for 81.28 percent ($837.34 million) of the total capital imported in Q2 2023, followed by portfolio investments with 10.37 percent ($106.85 million) and foreign direct investments with 8.35 percent ($86.03 million).
The production sector saw the largest inflow with $605.04 million, accounting for 58.73 percent of all capital imported in Q2 2023. The banking sector came in second with $194.58 million, accounting for 18.89 percent, and shares came in third with $68.63 million, accounting for 6.66 percent.
The only states that attracted foreign investors were Lagos, Abuja, Adamawa, Akwa Ibom, Anambra, Ekiti, Niger, Ogun, and Ondo.
The World Bank recently reported a decline in foreign direct investment into Nigeria as a result of low foreign exchange availability, security worries, and other structural issues.
According to a professor of economics at the University of Uyo, Akpan Ekpo, international investors are crisis-averse and their trust has been shaken by the insecurity situation in some areas of the country.
The states didn’t draw any investments for obvious reasons, according to Ekpo. “When your location lacks security, there is no way you can draw in international investment. They won’t show up.”
