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ICYMI…RipplesMetrics: Economic woes continue as only three Nigerian States attract investments in Q2



RipplesMetrics: Economic woes continue as only three Nigerian States attract investments in Q2

Nigerian States’ struggle to attract investment continued in the second quarter of the year, with only three states recording investments out of 36.

According to the National Bureau of Statistics (NBS) capital importation report for second quarter, Nigeria attracted $875.62 million investment in the last three months, indicating a 54 per cent decline when compared to $1.91 billion recorded in Q1’21.

Second quarter capital inflows also experienced 32.38% decrease compared to the second quarter of 2020.

NBS capital importation report captures total Foreign Direct Investment (FDI) portfolio investment, and other types of investments.

Breakdown by States

Lagos state emerged as the top destination of capital investment in Nigeria in Q2 2021 with $780.06m. This accounted for 89.09% of the total capital inflow in Q2 2021.

This is followed by Abuja’s $95.26 million and Ogun $0.3 million worth of investments.

All the remaining states received no foreign capital inflows during the quarter under review, NBS report indicated.

What this means is that since the start of the year, only eight states have been able to attract investments.

The other states to have announced investment this year are Akwa Ibom, Anambra, Kano, Kwara and Delta.

Type of investments in Q1

The largest amount of capital importation by type was received through Portfolio investment which accounted for 62.97% ($551.37m) of total capital importation.

This is followed by Other Investment, which accounted for 28.13% ($246.27m) of total capital imported while Foreign Direct Investment (FDI) accounted for 8.90% ($77.97m) of total capital imported in Q2 2021.

Breakdown by Sectors

RipplesMetrics: Economic woes continue as only three Nigerian States attract investments in Q2

Breakdown by sector shows the Banking sector dominated in Q2 2021, reaching $296.51m of the total capital importation in Q2 2021.

Read also: RipplesMetrics: Data show one in four poor Nigerians lives in North West States

Stanbic IBTC Bank Plc attracted the highest investment in the sector with $310.21m. This is followed by Standard Chartered Bank Nigeria Limited with $282.37 million. Union Bank, which has been the subject of takeover speculation, had the third highest value of capital imports at $29.59 million.

Other sectors to have attracted investment include Financing, attracting $205.88 million and $194.59 million through shares.

The United Kingdom continues to emerge as the top source of capital investment in Nigeria in Q2 2021 with $310.26m and this represents 35.43% of the total capital inflow in Q2 2021.

South Africa came in second with $212.39 million while United States brought in $83.41 million.

The salient message

As the country’s security issues persist, investors are concentrating their funds in States and sectors where they believe the risks are lower.

In a recently released research by SBM Intelligence, at least a total number of 2,371 persons were kidnapped in Nigeria in the first half of 2021.

Furthermore, the data show that the impact of the pandemic has continued to have an impact on foreign investment.

Ripples Nigeria had earlier reported that amid a dwindling Federal Allocation Revenue, only three states can generate up to 50% of their running costs.

As expected these states are Lagos, Ogun and the Federal Capital Territory.

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