RipplesMetrics: Nigeria’s $24bn investment gap behind MINT peers is bad news for everyone | Ripples Nigeria
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RipplesMetrics: Nigeria’s $24bn investment gap behind MINT peers is bad news for everyone

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The National Bureau of Statistics (NBS) on Friday last week, revealed that Nigeria’s Foreign Direct Investment (FDI) recorded a drop by 59.65 percent in 2020 to $9.68 billion from $23.99 billion in 2019, the lowest since 2016.

What the latest figure from NBS’s capital importation report means is, Nigeria is now firmly rooted at the bottom with a $23 billion difference among its peers identified as emerging economic giants in the turn of the new millennium

The emerging country peers include Mexico, Indonesia, and Turkey, which together with Nigeria were classified as “MINT”.

The term “MINT” was coined in 2001 by Goldman Sachs, an economist, Jim O’Neill for emerging economic giants and was used to describe the economies of Mexico, Indonesia, Nigeria, and Turkey.

READ MORE: Nigerians spent N9.28tn on imported goods in nine months –NBS

In arriving at the $23 billion gap estimate, Ripples Nigeria multiplied the average FDI inflows per capita of Mexico, Indonesia, and Turkey, derived from United Nations Conferences on Trade and Development (UNCTAD) investment trade monitor for 2020.

The average was found and multiplied by Nigeria’s population of 201 million according to World Bank.

Nigeria’s 2020 FDI inflow is $9.68 billion according to the National Bureau of Statistics, which gives an FDI per capita of $48, the lowest among peers.

Mexico FDI per capita is $205 given that it recorded $26.3 billion in 2020 and is home to some 127.6 million people as at 2019.

Indonesia, with a population of 270.6 million, attracted $18 billion in 2020 which comes to about $66.

Turkey’s $6.8 billion FDI inflow implies that with a population of 82 million it has an FDI per capita of $83.

The average for the three countries came to $118, which when multiplied by 201 million turned in $23.7 billion.

To put the gap into perspective on how far Nigeria has fallen, Ripples Nigeria analysis of UNCTAD data also revealed in the start of the new millennium, that it was almost equal start for Nigeria with its peers.

Nigeria’s FDI total stock in 2000 was USD$ 23.7billion, ranking in third, behind Mexico’s $121.6 billion and Indonesia’s $25 billion. Turkey had the least FDI stock of $18.8billion.

By 2019, 19 years later, the latest UNCTAD Mexico FDI stock has jumped by 416.4 percent to $628.4 billion.

Indonesia and Turkey’s FDI stock also surged 828.2 percent and 776.6 percent to $232.6 billion and $164.9 billion, respectively.

While Nigeria on the other hand fell off third place by no small margin and is now firmly rooted at the bottom growing by only 314.6 percent with $98.6 billion FDI stock.

“The numbers are a clear indication of government’s failure and its inconsistencies in implementing key reforms,” Samuel Okiti a development economist explained to Ripples Nigeria.

“Take for example the Petroleum Industry Bill (PIB) has dragged on for so long despite its huge potential to attract foreign investments into the country,” he added.

However, Okiti said all hope is not lost if the federal government is ready to work to correct those bottlenecks that makes Nigeria such a difficult country for business investment.

Similarly, in their paper, Stanley Chukwudi, Okoye, Peter Uchenna and, Ebekozien, Andrew fingered the low presence of infrastructure development by the government, Lack of policy framework, insecurity and terrorism and a long time for return on investment among others as the most severe hindrances to the inflow of FDI.

You will also recall that Ripples Nigeria had reported that twenty-six Nigerian states recorded no investment in 2020 and eight of those states in the last two years.

Chief Executive Officer, the Nigerian Economic Summit Group (NESG), Laoye Jaiyeola, called on the government at all levels to embark on reforms aimed at attracting investments into crucial sectors of the economy.

This, according to him, is because the business-as-usual scenario will only lead Nigeria down the drain of economic hardship, wider income inequality and an increase in the poverty rate.

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