In apparent reflection of the harsh business environment in Nigeria over the past year, the inflow of foreign investments into the country’s production/manufacturing sector plunged by 57.36 percent, quarter-on-quarter (q/q), to N191.92 billion in the first quarter of 2024 (Q1’24) from N450.11 billion in the preceding quarter (Q4’23).
Data obtained from the National Bureau of Statistics (NBS) also showed that capital importation into the sector decreased by 25.07 percent, year-on-year (y/y), in Q1’24 when compared with N256.12 billion recorded in Q1’23.
Capital importation refers to the inflow of money into the country’s economy from other economies for the purpose of investment, trade, or business operations.
Meanwhile, analysis of the NBS data on an annual basis, however, indicates a steady rise in the value of foreign investments into the manufacturing sector since 2020.
For instance, foreign investments into the sector amounted to N913.88 billion in 2020; N934.11 billion in 2021; N948.43 billion in 2022; and N1.59 trillion in 2023. This indicates an increase of 73.98 percent over the four year period.
Further analysis shows that the share of total foreign investments into the sector has been on a rising trend over the past four years.
In 2020, foreign investments of N913.88 billion into the sector represents 9.44 percent of total capital importation of N9.68 trillion recorded in the year; N934.11 billion in 2021 represents 13.94 percent of the total of N6.70 trillion for the year; N948.43 billion in 2022 represents 17.79 percent of N5.33 trillion total capital importation; while the N1.59 trillion investment into the sector in 2023 represents 40.66 percent of total foreign investments of N3.91 trillion recorded for the year.
However, the rising trend in the production/manufacturing sector’s percentage share of total capital importation seemed to have halted in Q1’24, with the N191.92 billion foreign investments attracted into the sector representing only 5.68 percent of the total capital importation of N3.38 trillion recorded in the quarter.
Commenting on the development, Director General, MAN, Mr. Segun Ajayi-Kadir, stated: “The production/manufacturing sector continues to face numerous challenges that deter investment and hinder the expansion of the sector.
“In the current economic climate that is characterized by macroeconomic instability and uncertainty, it is difficult attracting new investments into the manufacturing sector.
“This is not to take away the undeniable fact that there is huge potential from sustaining existing investments and attracting new inflows if the binding constraints militating against the performance of the sector are ameliorated. “Operators in the manufacturing sector should be able to secure credit facilities in the domestic market at rates that allow them to be competitive and make profit.”
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