Nigeria has hit a decline of 35 per cent in foreign direct investment (FDI), mostly brought about by the drop in oil prices.
This is was confirmed in the 2016 half year report The Global Investment Trends Monitor of the United Nations Conference on Trade and Development (UNCTAD).
The country which suffered a 27 per cent reduction in 2015, estimated at $3.4 billion of FDI has now declined further to an estimated $4.5 billion in 2016.
Even President Muhammadu Buhari has tacitly admitted that the fortunes of Nigeria had dwindled considerably, while begging the international investors for a way out.
According to the report, with details yet to be released, the Federal Government has been notified of the development and advised to review its economic programme to re-invite “real foreign investment portfolio in the remaining period.”
Also affected by decline are other Sub Saharan African countries, including South Africa, Kenya and Angola, among others, whose FDI fell by 32 from 31 per cent in 2015 to estimated $38 billion.
Besides, the report showed that flows to North Africa went down, but Egypt saw a rebound of investment from $4.3 billion in 2014 to an estimated $6.7 billion in the period under review.
Central and Southern Africa saw the largest declines in FDI with the end of the commodity “super-cycle” having an impact on resource-seeking investment.
Flows into Mozambique were down by 21 per cent but still notable at an estimated $3.8 billion. FDI into South Africa fell dramatically, down by 74 per cent to $1.5 billion.
However, global FDI flows rose in 2015 by 36 per cent to reach an estimated $1.7 trillion, the highest level since 2007. A wave of cross-border mergers and acquisitions (M&As), which rose significantly in value, was largely responsible for the increase in FDI.
Greenfield investment project announcements, in contrast, registered little change in value terms from 2015, with a rise in developed economies roughly compensating a pullback in multinational enterprises’.
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