Nigerian economy attracted $10.2bn new investment in 2019 –Report

The Nigerian economy attracted cross-border greenfield capital investment worth $10.2 billion in 2019, the latest report by fDi Market Intelligence, a research unit of London-based Financial Times has revealed.

The 2019 figure grew by 28% relative to what the country recorded in 2018 according to the report released on Thursday.

A greenfield investment is a category of Foreign Direct Investment (FDI) in which a parent company establishes a subsidiary in a foreign country by building it from scratch.

According to the report, foreign companies executed 73 FDIs in the country last year, making Nigeria one of the top 10 hubs for FDI ventures in Africa and the Middle East.

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“FDI into Nigeria increased with regards to number of FDI projects and capital investment by 35 per cent and 28 per cent, respectively,” it stated.

Jacopo Dettoni, the Deputy Editor of fDi Magazine, noted that the size of greenfield FDI projects announced across the world was flat in 2019 relative to 2018 as their estimated capital investment declined by around 15% to $795.7 billion but remained above a total of $651.1 billion posted in 2017.

“FDI into renewable energy reached new highs in 2019, with total pledged investment estimated at $92.2bn, second only to that of oil and gas at $123bn.

“From a geographical standpoint, Africa attracted the highest ever volume of FDI projects as reform efforts in major economies both in North Africa and sub-Saharan Africa are paying dividends,” he said.

In the Middle East and Africa, FDI by number of projects increased by 38% to 1,746 in 2019, up from 1,261 while capital investment contracted by 16% to $115.2 billion.

“FDI into Africa by number of projects grew 49 per cent to 998, compared with a 12 per cent increase between 2017 and 2018, increasing its market share of FDI into the region to 57 per cent.”

“Egypt replaced South Africa as the second ranked destination by projects in the region, experiencing a 60 per cent increase from 85 to 136 projects,” the report stated.

Dangote Group’s plan to create a new phosphate fertiliser plant worth $2 billion was noted as one of the key investments in Africa with the potential of providing 2,500 jobs.

Henry Loewendahl, the Chief Executive Officer of Wavteq, projected a 40% drop in greenfield FDIs in 2020 considering the impact of the coronavirus pandemic.

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