Investors Avoid 28 States, Pushing Nigeria to Borrow $1.21 Billion

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Nigeria relied on foreign borrowing ($1.21bn) to boost its capital importation in the first six months of 2023. 


According to a report from the National Bureau of Statistics on Nigeria’s Capital Importation, 28 states failed to attract any foreign investments during the period in question. In the first half of 2023, there was a significant year-on-year decline of 30.42% in total capital importation, dropping from $3.11 billion in the corresponding period of 2022 to $2.16 billion.


The challenges of insecurity and a challenging business environment have continued to negatively impact foreign direct investments in Nigeria. Consequently, the country has increasingly turned to foreign loans to bolster its capital importation. Investments in the form of loans grew by 17.43% to $1.21 billion in the first half of 2023, compared to $1.03 billion in the same period in 2022.


Regarding the breakdown of foreign investments, the National Bureau of Statistics reported that in the second quarter of 2023, other investments took the lead, comprising 81.28% ($837.34 million) of the total capital importation, followed by Portfolio Investment at 10.37% ($106.85 million) and Foreign Direct Investment at 8.35% ($86.03 million).


The World Bank recently noted that foreign direct investment in Nigeria has declined due to factors such as limited availability of foreign exchange, security concerns, and various structural challenges.

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