Nigeria attracts $55.5 billion in foreign investment since 2019: See the top 5 countries where it came from 

Despite significant economic challenges, Nigeria has managed to attract a total of $55.5 billion in foreign capital between Q1 2019 and Q2 2024.

However, this figure also reflects the broader difficulties the country has faced since the COVID-19 pandemic, particularly with declining oil prices, production challenges, and rising global interest rates.

These factors have severely impacted Nigeria’s ability to draw foreign investment, as international capital became more expensive and less available.

In response, the Nigerian government, under the administration of former President Muhammadu Buhari, implemented strict capital controls aimed at stabilizing the economy.

• Unfortunately, these measures only exacerbated the situation, making it difficult for foreign investors to repatriate profits, which further deterred much-needed investments.

• The capital controls, combined with global financial pressures, resulted in a marked decline in capital inflows, especially Foreign Direct Investment (FDI).

Capital importation into Nigeria is generally divided into Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI).

• According to the data, Nigeria has attracted $3.6 billion in FDI since 2019, while the remaining $51.9 billion came in the form of FPI.

• This trend reflects the country’s heavy dependence on short-term, volatile capital from foreign portfolio investors rather than long-term direct investment.

• Notably, 2019 was a standout year, with Nigeria receiving its largest single-year capital inflow of $23.9 billion, while 2023 recorded the lowest amount, with just $3.9 billion.

• For context, between the second half of 2013 and the end of 2018, Nigeria attracted $73.6 billion in foreign capital, out of which FDI totalled $6 billion.

• This decline in capital importation reflects the impact of both domestic and global economic headwinds over the last five years.

Here are the top five countries that contributed the most to Nigeria’s capital importation since 2019, ranked based on total capital inflows for the period.

1. United Kingdom: $24.29 billion 
2. United States: $7.01 billion 
3. Republic of South Africa: $5.93 billion 
4. Netherlands: $3.13 billion 
5. Singapore: $3.01 billion 

By region, Europe is the largest contributor, accounting for $28.24 billion in capital, driven primarily by investments from the United Kingdom and the Netherlands. Africa comes next, with $9.19 billion, largely dominated by South Africa’s contributions. North America, led by the United States, has injected $7.01 billion, while Asia follows with $6.44 billion, primarily from Singapore and the United Arab Emirates.

1. Europe: $28.24 billion
2. Africa: $9.19 billion
3. North America: $7.01 billion
4. Asia: $6.44 billion

Economic Realities Affecting Capital Importation

The $55.5 billion in capital importation since 2019 highlights the economic hurdles Nigeria has faced in recent years.

The collapse in global oil prices, combined with domestic production challenges and higher global interest rates, has significantly reduced the flow of foreign capital into the country.

These issues, compounded by the capital controls imposed during the Buhari administration, further strained investor confidence and resulted in a sharp drop in foreign investments.

The current administration under President Bola Tinubu has introduced several reforms aimed at reversing these trends and attracting foreign capital.

• Key initiatives include the removal of the fuel subsidy, a move to a more flexible exchange rate regime, forex reforms, and the adoption of higher interest rates to stabilize the economy and restore investor confidence.

• While these reforms have led to an increase in capital importation during the first half of 2024, the inflows have not been as robust as in the pre-COVID years.

• Additionally, the exchange rate has depreciated by over 40% in 2024, posing further challenges to investor sentiment.