Investment announcements in Nigeria dropped 13.4 percent to $10.1 billion in the first half of 2021, H1’21. This economy development indicated recorded $11.68 billion in the second half of 2020, H2’20.
In a report yesterday, the Nigerian Investment Promotion Commission, NIPC, also indicated a lull in investment announcements in the second quarter of 2021 (Q2’21) at $1.69 billion, a 79.9 percent quarter-on-quarter, QoQ, drop compared to $8.41 billion announced in the first quarter, Q1’21.
The profile however shows an increase of 99.6 percent over the $5.06 billion reported in the same period in 2020, H1’20, apparently reflecting the impact of the COVID-19 tension in H1’20.
Sectorial analysis of the “Report of Investment Announcements in Nigeria H1 2021” released by NIPC shows that the Manufacturing sector attracted most investments with $5.9 billion or 58 percent, followed by Construction $2.9 billion (29 percent); Electricity (including gas, steam and air conditioning supply) $680 million (7 percent); Information & Communication $410 million (4 percent); while others recorded $210 million or 2 percent.
On the sources, the report revealed that $3.29 billion or 33 percent of the total investment announcements emanated from domestic investors; $1.40 billion (14 percent) from Morocco; $950 million (9 percent) from China; $640 million (6 percent) from UK; with other sources accounting for $3.82 billion or 38 percent.
NIPC noted that in terms of destination, only 14 states attracted all the investment announcements. Bayelsa and Delta States emerged top investment destinations during the period, with $3.60 (36 percent) and $2.94 billion (29 percent) respectively, followed by Akwa Ibom $1.40 billion (14 percent) and Lagos State $700 million (7 percent).
The other 10 states attracted $1.47 billion or 15 percent of the investment announcements.
In total, NIPC noted that Nigeria received 29 projects across 14 states in H1’21 compared to H1’20 with 34 projects across 16 states and the Federal Capital Territory (FCT).
The Commission said that the report is based only on investment announcements captured by NIPC from January to June 2021, adding that investment announcements do not necessarily translate to actual investment inflow. It also noted that investment announcements do not necessarily translate to actual investment inflow.
Records show that in 2017, only $2.41 billion actual foreign direct investment (FDI) inflow was recorded out of a total investment announcements of $66.35 billion; in 2018 only $780 million FDI out of $90.89 billion; in 2019 $2.31 billion out of $29.91 billion, and in 2020 only $2.39 billion actual FDI was recorded out of $16.74 billion investment announcements.
The gaps between announcements and actual investments demonstrate investments potentials, NIPC noted.