Nigeria has experienced a substantial decline in Foreign Direct Investments (FDI) over the past decade, with investments falling from $22.7 billion in 2014 to $3.7 billion in 2023, according to recent data presented by the Minister of Finance and Coordinating Minister for the Economy, Wale Edun.
Speaking at a gathering of top business leaders at the Lagos Business School Breakfast Club, Edun highlighted the Nigerian economy’s challenges and outlined the government’s strategies to address them.
The Lagos Business School Breakfast Club serves as a platform for C-suite executives to receive insights into the business environment, fostering discussions on current economic issues and opportunities. The club attracts participants from various sectors, including the business community, diplomatic corps, development partners, and government officials.
Edun emphasised the government’s focus on enhancing forex supply through increased FDI and Foreign Portfolio Investments as part of its economic reform agenda. He provided a detailed overview of FDI trends in Nigeria over the years, revealing a consistent downward trajectory since 2014.
While FDI stood at $22.7 billion in 2014, it declined to $14.4 billion in 2015 and further dropped to $10.4 billion in 2016. The subsequent years witnessed fluctuating FDI inflows, with a marginal increase recorded in 2018 ($11.9 billion) and 2020 ($10.2 billion). However, the figures plummeted significantly in 2021 ($6.9 billion), 2022 ($4.6 billion), and 2023 ($3.7 billion).
In response to these challenges, Edun announced the government’s plans to issue domestic bonds denominated in foreign currency in the second quarter of the year. This initiative aims to attract additional foreign exchange inflows to stabilise the country’s currency.
Highlighting the need to boost investor confidence, Edun stated, “Due to the lack of faith in the currency, we are targeting funds held in diaspora accounts. We are focusing on attracting these funds to support our economic objectives.”
Earlier this year, Minister of Trade, Industry, and Investment, Doris Uuzoka-Anite, revealed that Nigeria had attracted $30 billion worth of investment commitments during President Bola Tinubu’s first eight months in office. While these commitments represent future promises from investors, Anite clarified that the actual financial inflows would materialise over a period of five to eight years.
Despite the challenges of attracting foreign investment, Edun remains optimistic about Nigeria’s economic prospects. He emphasised the government’s commitment to fostering an environment conducive to investment, promoting productivity, economic growth, job creation, and poverty reduction, aligning with President Bola Ahmed Tinubu’s economic policies.
Edun concluded, “The big prize is to make our economy, institutions, and corporate governance attractive to global investors with surplus savings, encouraging them to invest in profitable ventures within Nigeria.”
