Nigeria Attracted $5.12 Billion Investment Inflow in 2016, The Lowest Figure in 10 Years

The Nigerian economy recorded its worst investment inflow in 10 years with the country attracting a total investment of $5.12bn in the 2016 fiscal period. The $5.12bn investment figure, when compared to the $9.64bn that the economy attracted in 2015, represents a decline of $4.52bn or 46.86 per cent.

The decline was confirmed in the Capital Importation Report, which was released on Wednesday by the National Bureau of Statistics. There are three major categories of investment that make up the total investment inflow into the country. They are portfolio investment, which attracted $1.81bn in 2016; foreign direct investment, which attracted $1.04bn; and $2.26bn in other investments.

The bureau explained in the report that investor apathy about the Nigerian economy was symptomatic of the economic crisis currently being experienced in the country.

For instance, it said that the weak value of the naira was one of the reasons for the low investment inflow into the country, adding that this affected the level of portfolio investment negatively.

The report stated, “The total value of capital imported into Nigeria in the fourth quarter of 2016 was estimated to be $1.54bn, which represents a decrease of 15 per cent relative to the third quarter, and a fall of 0.52 per cent relative to the fourth quarter of 2015.

“The level of capital imported was similar in each month of the quarter, but the highest was in December at $555.37m. In the year 2016, capital importation fell by 46.86 per cent from $9.64bn in 2015 to $5.12bn.

“This was the lowest value since the series started in 2007, which reflects the numerous economic challenges that afflicted Nigeria in 2016. The weakening of the naira may have had an impact, as a weaker naira means more can be purchased with each dollar and, therefore, investment projects requiring naira payments cost less in dollar terms.”

The report stated that portfolio investment was the most badly affected investment class in 2016 as it recorded a decline of 69.81 per cent owing to the current market conditions. Read the full report here.