The total value of foreign investments in Nigeria dropped by 20.5% in 2022 to $5.33 billion, down from $6.7 billion in 2021. The National Bureau of Statistics (NBS) published the Nigeria Capital Importation Report on Tuesday, which indicated a significant decline in foreign direct investments (FDIs), portfolio investments, and other investments in the country throughout the past year.
According to the report, there was a 33% decrease in FDIs from $698 million in 2021 to $468.08 million. Additionally, portfolio investment declined to $2.4 billion, while other investments, which include trade credits, loans, currency deposits, and other claims, amounted to $2.4 billion in the reviewed year.
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During Q4 2022, Nigeria experienced a total capital inflow of $1.1 billion, 51.5% lower than the $2.2 billion recorded in Q4 2021. When compared to the previous quarter, there was an 8.5% decrease in capital importation from $1.2 billion in Q3 2022. The majority of capital importation during Q4 2022 originated from Other Investment, constituting 65.2% and totaling $691.23 million of the total capital imported. Portfolio Investment came next, representing 26.9% or $285.26 million, followed by Foreign Direct Investments (FDIs) at 7.9%, totaling $84.23 million.
When examining the sector-wise distribution, the report from NBS revealed that the production sector received the largest share of capital inflows, accounting for 37.0% ($392.54 million), of the total capital imported in Q4 2022. The banking sector received capital inflows of $255.45 million, accounting for 24.1% of the total capital imported in Q4 2022, followed by the telecoms sector with $168.27 million, representing 15.9%.
According to the data on Capital Importation by Country of Origin, the United Kingdom emerged as the top source of capital inflows in Q4 2022, contributing $455.24 million, representing 42.9% of the total capital imported. South Africa and the United Arab Emirates ranked second and third as they both contributed $119.31 million (11.3%) and $116.82 million (11.0%) respectively.
In terms of destination of investment, Lagos state retained its position as the top choice in Nigeria, with a total capital investment of $600.54 million, constituting 56.6% of the overall capital invested in Nigeria in Q4 2022. Lagos was followed closely by FCT (Abuja) with $424.50 million (40%). Other states in Nigeria, such as Akwa Ibom, Anambra, Ekiti, Enugu, Katsina, Kogi, Oyo, and Plateau, also received foreign investments in 2022, albeit in minimal amounts.
States such as Abia, Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Gombe, Imo, Jigawa, Kaduna, and Kebbi did not attract any foreign investments in 2022. Nasarawa, Kwara, Kano, Niger, Ogun, Ondo, Osun, Rivers, Sokoto, Taraba, Yobe and Zamfara states also did not record any foreign investments.
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During Q1 2022, a total of $1.57 billion in capital importation was attracted by only six states, namely Abuja, Anambra, Katsina, Lagos, Oyo, and Plateau. In Q2 2022, the cumulative capital inflows amounted to $1.54 billion. Lagos led the pack, attracting the highest capital inflow of $1.05 billion, followed by Abuja with $453.95 million, Anambra with $24.71 million, Kogi with $2 million, and Ekiti with $500,000.
