The Nigerian Investment Promotion Commission (NIPC) has revealed that both local and foreign investments in Nigeria fell from $8.41 billion in the first quarter of 2021 to $2.58 billion within the same timeframe in 2022.
According to the NIPC’s report on investment in Nigeria from January to March 2022, commitments fell by 69.32% from Q1 2021 to Q1 2022.
The report shows that investment deals in the first quarter of 2022 covered 33 projects in five states, as well as the Federal Capital Territory.
During this period, the manufacturing sector garnered the most investment commitments, totalling $1.1 billion, or 45 percent of overall deals. The agriculture industry comes in second with $0.64 billion, or 25% of overall commitments.
Sokoto State received the most investment commitments, totalling $1.05 billion, accounting for 41% of all promises. Lagos State comes in second with $0.88 billion, accounting for 34% of total pledges.
Nigerian investors contributed $1.13 billion in investment pledges, accounting for 44% of total commitments.
US investors committed $1.01 billion investments in Nigeria, accounting for 39% of total pledges in Q1 2022. Experts have criticised the economic impact of insecurity, claiming that it discourages investment in the country.
According to Kosy Aghaulor’s 2021 journal article titled Growth Impact of Insecurity on the Nigerian Economy, the security challenge in Nigeria constituted a threat to lives and property and had hampered business activities, discouraging local and foreign investors, impeding and inhibiting economic growth.
Felix Onah, a professor of Economics at Godfrey Okoye University in Enugu State, stated that insecurity in Nigeria has influenced the cost of production, the degree of foreign investment, and the ability of businesses to prepare for the future.
He said, “The insecurity in the country is affecting the level of investment in the country and also the Gross Domestic Product.”
Onah added that “When companies leave the country, their production in the country is taken away and this would negatively affect the GDP of the country.”