New investments drop by 57% to $5.06b in first half

Collins Nweze

NEW investments dropped by 57 per cent to $5.06 billion in the first half of the year, a third of what was recorded within the corresponding period of 2019.

Executive Secretary and Chief Executive Officer, Nigerian Investment Promotion Commission (NIPC), Yewande Sadiku said coronavirus pandemic has affected the country’s strategy for soliciting foreign investments and renewed focus on investors to stimulate local businesses.

She spoke against the background of the UNCTAD’s forecast, which estimates that foreign direct investment flows will decrease by 30 to 40 per cent between 2020 and 2021.

“As the pandemic worsens and economies further contract, our projection remains that those UNCTAD figures will shrink even further,’’ Sadiku said.

Sadiku was a guest on Arise Xchange, the weekly global business report of ARISE TV Networks.

She noted that the biggest investments for new entrants from the half-year were recorded from Kaduna, Nasarawa and Ekiti states.

Addressing the anchor, Boason Onafeye’s question on the 33 projects announced, the importance of tracking investments, she explained that “in the first half of 2020, NIPC tracked 33 projects across 15 states and the FCT, versus in the first half of 2019, where the Commission tracked 43 projects in 10 states and the FCT. Our meticulous tracking gives the commission an understanding of the sectors, sub-national areas that excite investors. Additionally, it enables us to advise the government on policy changes that are required to reverse or thrust policy-making.”

While FDI is expected to slow down because of COVID-19, we are also presented with new optimism for local investments and businesses to take advantage of some unique o67pportunities presented by COVID. In particular, fintech, e-commerce, and food processing are witnessing increased consumer activity. Increased domestic investor activity can also trigger foreign companies expanding or partnering with Nigerian businesses.

On her outlook for the rest of 2020, she expressed her belief that “many economies will be focused on investment-driven growth and getting their investors to look internally and invest inwards to stimulate local businesses. This will also happen alongside a renewed zeal on impact investment, as investors would not only consider the returns on their investments but the impact their capital will have on the overall health of economies”.

She added: ‘’There will be a continuous increase in the domestic manufacturing capacity of essential and critical commodities per country.”