Nigeria’s oil and gas sector continued its persistent underperformance in the fourth quarter (Q4) of 2023, with the manufacturing and banking segments of the Nigerian economy taking the lion’s share of foreign investment into the country between October and December last year, a new data from the National Bureau of Statistics (NBS) has revealed.
In the Q4 of 2023, total capital importation into Nigeria, according to the NBS, stood at $1.088 billion, slightly higher than the $1.060.73 billion recorded in Q4 of 2022, indicating an increase of 2.62 percent.
In comparison to the preceding quarter, capital importation rose by 66.27 percent from $654.65 million in Q3 of 2023.
According to the report, production/manufacturing received a $450 million capital inflow, representing 41.35 percent of the total capital importation, followed by banking, which raked in $283 million or 26.03 percent during the Q4 of 2023.
The report showed that Lagos State came tops as the preferred investment destination, followed by Abuja, while Rivers and Ekiti states came to a distant third and fourth positions.
According to TheCable Index analysis, Nigeria only attracted a meagre $3.91 billion in foreign capital inflow last year — the lowest since 2007.
Lagos State remained the top destination in Q4, 2023 with $771.68 million, accounting for 65.38 percent of total capital importation, followed by Abuja (FCT) with $370.80 million (34.07 percent) and Rivers State with $6 million (0.55 percent)
The NBS report detailing Nigeria’s capital importation volume in Q4, 2023, indicated that of the $1.088 billion that came into Nigeria, the oil and gas sector got only $2.04 million, representing a meagre 0.19 percent of the total capital inflow during the period.
Capital importation means foreign investments into a country’s economy and is made up of Foreign Direct Investment (FDI), portfolio investment, and other investments.
While the services sector got zero capital inflow, transport received 0.01 percent, which is about $14,000, followed by construction, which got 0.02 percent, which is about $25,000.
Despite Nigeria’s need for massive investment in the agriculture sector, the sector had just 0.04 percent, which was about $42,000, even as consultancy garnered 0.05 percent or $50,000 inflow during the period under review.
Nigeria’s oil and gas sector, currently in dire need of foreign investment, has been negatively impacted by incessant pipeline vandalism and the rising opposition by the West to the exploration and exploitation of fossil fuels.
Although production has risen in recent months, hitting 1.42 million barrels per day in January, Nigeria has consistently failed to meet its Organisation of Petroleum Exporting Countries (OPEC) quota for almost four years.
Also, with over 206 trillion cubic feet of reserves, transportation infrastructure remains a major constraint for the country’s enormous gas resources due to a lack of investment and general sabotage of existing facilities.
However, at the top of the dollar inflow during the quarter under consideration was production/manufacturing, with $450 million or 41.35 percent of the total capital importation, followed by banking, which raked in $283 million or 26.03 percent during the three months.
“In Q4, 2023, total capital importation into Nigeria stood at $1.088.48 billion, slightly higher than $1.060 billion recorded in Q4 2022, indicating an increase of 2.62 percent.
“In comparison to the preceding quarter, capital importation rose by 66.27 percent from $654.65 million in Q3, 2023,” the data released by the NBS indicated.
Other investments accounted for 54.64 percent or $594.74 million, of the total capital importation in Q4, 2023, followed by portfolio investment which amounted to 28.46 percent or $309.76 million, and Foreign Direct Investment (FDI) of $183.97 million or. 16.90 percent.
“The production/manufacturing sector recorded the highest inflow with $450.11 million, representing 41.35 percent of total capital imported in Q4 2023, followed by the banking sector, valued at $283.30 million or 26.03 percent, and financing with $135.59 million or 12.46 percent,” the NBS reported.
According to the NBS, capital importation during the reference period originated largely from the United Kingdom which amounted to $267.24 million, or 24.55 percent of the total volume of capital imported during the three months.
This was followed by Mauritius with $226.18 million or 20.78 percent and the Netherlands with $149.93 million or 13.77 percent of the total.
Also, some $144.25 million in investment came from Singapore, while $116.37 capital was imported from South Africa.
The report stated that Lagos came tops in terms of favourite investment destination, followed by Abuja and then Rivers with Ekiti in a distant third and fourth positions.
“Lagos state remained the top destination in Q4, 2023 with $771.68 million, accounting for 65.38 percent of total capital importation, followed by Abuja (FCT) with $370.80 million (34.07 percent) and Rivers State with $6.00 million (0.55 percent),” the NBS report added.
Meanwhile, The Cable Index analysis showed that Nigeria only attracted a meagre $3.91 billion in foreign capital inflow last year — the lowest since 2007.
The analysis also showed that in the five years between 2007 and 2011, inflow ranged from $5.7 billion to $9.57 billion.
A significant jump occurred in 2012, with inflows reaching $16.62 billion.
This was followed by two consecutive increases exceeding $20 billion between 2013 and 2014.
Inflows dipped again from 2015 onwards, with a brief recovery in 2017. This culminated in a decline of $3.91 billion in 2023 — marking a 17-year low.
At $24 billion, 2019 saw the highest foreign investment in the past 17 years but the feat was not sustained.
Emmanuel Addeh
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