Tinubu’s Investment Push Falters: Nigeria’s Capital Importation Plummets by 43.55% in Q3 2023

Infostride News reports that Nigeria’s capital importation has experienced a significant decline of 43.55% in the third quarter of 2023, despite the earnest efforts of the current administration led by President Bola Tinubu to attract investments into the country. The figures reveal a stark contrast, with only $654.65 million recorded in Q3 2023 compared to the robust $1.16 billion reported in the same quarter of the previous year.

Breaking down the data further, there was a quarterly decrease of 36.45%, with capital importation standing at $1.03 billion in the preceding quarter of the same year. This revelation comes from the latest capital importation report by the National Bureau of Statistics, shedding light on the challenges faced by the Nigerian economy in terms of attracting foreign investments.

Examining the composition of investments in Q3 2023, Other Investment dominated, accounting for a substantial 77.56% ($507.77 million) of all capital importation. This was followed by Portfolio Investment, contributing $87.11 million or 13.31%, and Foreign Direct Investment (FDI) with $59.77 million or 9.13%. Sector-wise, the production/manufacturing sector emerged as the leading recipient, securing $279.51 million or 42.70% of the total capital imported. Following closely was the financing sector, which received the second-highest inflow of $127.93 million (19.54%), while shares accounted for the remaining $85.49 million (13.16%).

The geographic origin of foreign capital during this period reveals that the Netherlands played a significant role, contributing 26.83% of the market share, equivalent to $175.62 million. Singapore followed suit with $79.15 million (12.09%), and the United States contributed $67.04 million (10.24%).

Lagos state maintained its position as the leading recipient of capital, receiving $308.83 million, which represents a substantial 47.18% of the total capital importation. Abuja (FCT) followed with $194.66 million (29.73%), and Abia state contributed $150.09 million (22.93%).

In the realm of banking, Stanbic IBTC Bank Plc emerged as the top recipient of capital importation in Q3 2023, securing $222.84 million or 34.04%. Following closely was Citibank Nigeria Limited with $190.03 million (29.03%) and Zenith Bank Plc with $83.04 million (12.68%).

In tandem with these economic developments, President Bola Tinubu embarked on an ambitious diplomatic journey, visiting at least 10 different nations during the first half of his year in office. Notable destinations included the United Kingdom, Kenya, the Benin Republic, India, France, and Guinea-Bissau, with repeated visits to the latter two. However, these trips have not been without controversy, particularly the massive entourage accompanying President Tinubu during his September visit to the United Nations General Assembly in New York City and the recent COP28 trip in Dubai.

Despite the president’s continuous reassurances to potential investors during these foreign excursions, it seems that investors remain hesitant to commit to the Nigerian market. The impact of Tinubu’s overseas engagements, according to Federal Minister of Information and National Orientation Mohammed Idris, has resulted in over $15 billion in Foreign Direct Investment (FDI) pledges across various economic sectors.

Idris emphasized that President Tinubu’s engagements have showcased Nigeria’s dedication to becoming a responsible and cooperative member of the global community, bringing attention to the country’s vast potential. “We have seen over $15 billion in Foreign Direct Investment (FDI) pledges in various sectors such as energy, steel, defense, and the automotive,” said Idris, highlighting the diverse areas where investment commitments have been made. The minister also pointed out a notable example of progress, mentioning that a major pharmaceutical company from Japan has commenced the construction of a multi-million-dollar manufacturing unit in Ogun State.

However, despite these promising pledges, it appears that investors are yet to fulfill their commitments, as foreign investments continue to experience a decline in the country. This trend is evident despite the persistent efforts made by the current administration through numerous foreign trips and appeals to attract much-needed foreign capital into Nigeria. The challenge now lies in bridging the gap between investor commitments and actual capital inflow to bolster the Nigerian economy.