To say Nigeria remains import dependent in the area of food is stating the obvious, as receipts from food and beverage import bill rose significantly in 2025, reaching ₦5.27 trillion in the first nine months alone. This represents a sharp increase from the ₦4.71 trillion recorded during the same period in 2024, reflecting an 11.74% year-on-year growth driven by rising demand for imported primary food items.
While the government implemented temporary waivers (for 150 days) on certain food imports to reduce local prices, the overall trend indicated a higher dependency on foreign food sources in 2025, according to data from the National Bureau of Statistics (NBS).
Interestingly, as the federal government begins to look inwards to fill the gap in the area of provision of raw materials locally and exportation of finish products to strengthen the naira, the management of Agbeyewa farm which just recently acquired Matna Food Processing company to boost cassava processing, has taken the bull by the horns: through keen, deliberate devotion to the ideals and ideas of backward integration to drive food security ultimately.
The subject of backward integration has consistently taken the center stage at various fora with stakeholders reviewing the importance of backward integration in the agricultural sector. This, of course, has led to several correspondences and different opinions from players in the manufacturing and agricultural sectors.
It is pertinent to note that a venture into backward integration is a cumbersome task, but the result is always overwhelming. The process of setting up the value chain for backward integration is capital intensive and takes time to actualise as local manufacturers often face the task of paying back possible loans from commercial banks at 20 – 35% interest rate. However, importers do not suffer such fate as they import, pay duties and hit the market running (making money instantly).
At the last count, manufacturing giants like Nigerian Breweries, FrieslandCampina Wamco Plc, Nestle, PZ Wilmar; Dangote Group and Flour Mills of Nigeria, have shifted drastically to local inputs for their products. Others are; De-United Food, Chi Limited, Presco Oil, Okomu Oil, and BUA Group.
Enter Matna Food Processing company…
The capital intensive nature to backwards integration notwithstanding, many local manufacturers and multinationals in Nigeria like the Agbeyewa Farms Limited, located in Ekiti, appears to have taken the bull by the horns.
One of the company’s strategic business moves late last year was the acquisition of Matna Foods Company Limited, located in Akure, Ondo State.
Matna Foods is a Nigerian agro-allied processing company specialising in the production of international-standard, multi-purpose cassava starch. Incorporated in 1998 and operational since 2002, the company was founded by Chief (Dr) Joseph O. Sanusi, CON, and the late Mr. Tae Won Cho, ahead of Nigeria’s national cassava development initiatives. The company plays a critical role in linking local cassava farmers to industrial markets.
The new owner, the Agbeyewa Industries Limited, a subsidiary of Cavista Holdings, is a leading agro-allied company committed to transforming agriculture in Africa. With a strong focus on innovation, the company is spearheading a Cassava Revolution—aimed at transforming the process of cassava cultivation, aggregation, processing, and market integration, driving food security and economic development across the continent.
Through its Corporate Social Responsibility (CSR) initiatives, led by the Agbeyewa Farms Community Development Foundation (AFCDF), the company also drives impactful programs in education, economic empowerment and environmental sanitation.
The acquisition of Matna, one of the oldest cassava starch processing companies in Nigeria, by Agbeyewa is believed to have marked a significant strategic milestone for Agbeyewa as part of its broader vision to integrate agricultural production, processing, and industrial utilisation within Nigeria’s cassava value chain, linking large-scale cassava cultivation in Ekiti State with industrial processing capacity in Ondo State.
According to the new owner, the regional synergy is expected to unlock new efficiencies, expand local sourcing, and stimulate economic activity for all players in the cassava value chain. It was also stated that the acquisition aligns strongly with the Federal Government’s drive to strengthen food security, reduce imports, and deepen agro-industrial value chains, particularly within the cassava ecosystem—one of Nigeria’s most strategic crops.
Agbeyewa, located in Ekiti State, has grown into a transformational agriculture business, and operates the largest cassava farm in Nigeria. Guided by its four pillars of large-scale cultivation, aggregation, processing and agro-allied investment, the company has implemented an innovative in-grower/out-grower model and forged high-impact partnerships, including a Memorandum of Understanding with the Government of Ekiti State to cultivate 100,000 hectares of farmland over the next decade.
Chairman of Agbeyewa and Cavista Holdings, Niyi John Olajide, described the acquisition as a strategic investment in Nigeria’s economic future:
“This is about building a resilient agricultural value chain that creates real impact. From increased cassava offtake to expanded processing and industrial supply, this acquisition supports food security, import substitution, and—most importantly—creates jobs, jobs, and more jobs for Nigerians. We are investing to grow capacity, expand opportunities for farmers, and create sustainable employment across communities.”
Commenting on the transaction, Chief Sanusi said: “For some time, we have been deliberate about finding the right partners to take Matna Foods to its next phase of growth. We were not looking for just a buyer, but a partner with the scale, discipline, and long-term vision to grow the business sustainably. Agbeyewa stood out because of its commitment to agriculture, its strong execution capacity, and its alignment with the original vision behind Matna. We are confident that this acquisition positions the company for renewed growth and greater impact.”
Due to rising demands of stash, a recent research by experts indicated that over reliance on foreign imports could frustrate government policy on backward integration as well as creating unnecessary barriers in the local manufacturing sector. This must have informed the decision of the management of Agbeyewa farms to search for a suitable location with good access to the manufacturing hubs in Lagos, Ogun and Oyo States for easy access to raw materials.
In an interview with the new Managing Director of Matna Foods, Mr. Seyi Aiyeleso, he explicitly shared insights into the journey to agricultural processing. “Our decision to go into processing didn’t start the day we acquired Matna but rather, the background had been laid with the establishment of Agbeyewa Farms a few years ago.
“While we rely on what comes out of our farm as a major chunk for our manufacturing activity, we are also currently working with farmers in the entire value chain to source for more cassava. This is poised to keep the factory running with the volume of raw materials required for production.”
According to Aiyeleso, as capital intensive as the project appears to be, the gains far outweigh the pains in the long run.
The National Bureau of Statistics (NBS) has said Nigeria’s Gross Domestic Product (GDP) grew by 3.98 per cent (year-on-year) in real terms in the third quarter of 2025.
The report also said the growth rate is higher than the 3.86 per cent recorded in the third quarter of 2024.
NBS said in nominal terms, the economy is N113.587trillion and the performance is higher when compared to the third quarter of 2024, which recorded an aggregate GDP of N96.160trillion, indicating a year-on-year nominal growth of 18.12 per cent.
The report noted that during the quarter under review, agriculture grew by 3.79 per cent, an improvement from the 2.55 per cent recorded in the corresponding quarter of 2024 while the growth of the Industry sector stood at 3.77 per cent from 2.78 per cent recorded in the third quarter of 2024 and the Services sector recorded a growth of 4.15 per cent from 4.97 per cent in the same quarter of 2024.
“In terms of share of the GDP, the services sector contributed more to the aggregate GDP in the third quarter of 2025 at 53.02 per cent compared to the corresponding quarter of 2024 at 52.93 per cent.
It added that the oil sector recorded an average daily oil production of 1.64 million barrels per day (mbpd), higher than the daily average production of 1.47 mbpd recorded in the same quarter of 2024 by 0.17 mbpd and lower than the second quarter of 2025 production volume of 1.68 mbpd by 0.04mbpd.
“The non-oil sector grew by 3.91% in real terms during the reference quarter (Q3 2025). This rate was higher by 0.11% points compared to the rate recorded in the same quarter of 2024, which was 3.79% and higher than the 3.64% recorded in the second quarter of 2025.”
“This sector was driven in the third quarter of 2025 mainly by Agriculture (Crop production); Information and Communication (Telecommunications); Real Estate; Financial and Insurance (Financial Institutions); Trade; Construction; and Manufacturing, accounting for positive GDP growth. In real terms, the non-oil sector contributed 96.56% to the nation’s GDP in the third quarter of 2025, lower than the share recorded in the third quarter of 2024, which was 96.62% and higher than the second quarter of 2025 recorded as 95.95%.”
The National Bureau of Statistics (NBS) has released the long-awaited Rebased Gross Domestic Product (GDP), saying it grew by 3.13 per cent in the First Quarter of 2025 (Q1 2025) in real terms from the 2.27 per cent of Q1 2024.
The Statistician General, Prince Adeyemi Adeniran broke the news in Abuja.
He said: “Following the rebasing of the Gross Domestic Product using 2019 as the base year, previous quarterly GDP estimates were benchmarked to the rebased annual estimates to align the old series to the new rebased estimates.
“This procedure provided new quarterly GDP series, which are compared to the 2025 first quarter estimates.
Gross Domestic Product (GDP) grew by 3.13% (year-on-year) in real
terms in the first quarter of 2025.
“This growth rate is higher than the 2.27% recorded in the first quarter of 2024.”
He said the performance of the GDP in the quarter under review was driven mainly by the Services sector, which recorded a growth of 4.33% and contributed 57.50% to the aggregate GDP.
The agriculture sector, according to him, grew by 0.07 per cent, from the growth of -1.79% recorded in the first quarter of 2024.
The growth of the industry sector was 3.42%, from 2.35% recorded in the first quarter of 2024. In terms of share of the GDP, the services and industry sectors contributed more to the aggregate GDP in the first quarter of 2025 compared to the corresponding quarter of 2024.
He said in the quarter under review, aggregate GDP at basic price stood at N94,051,733.20 million in nominal terms.
This performance, according to Adeniran, is higher when compared to the first quarter of 2024, which recorded an aggregate GDP of N79,505,265.15 million, indicating a year-on-year nominal growth of 18.30%.
Despite rebasing of GDP, Nigeria remains fourth largest economy in Africa in terms of normal economy.
According to the NBS, the country’s economy is worth N372.82 trillion in 2024.
Using the current N1,529.53 per dollar, this means the economy is $243,526,768,148.72 (billion) in terms of dollar.
This means Nigeria is still behind South Africa, which its economy is worth $410,338 billion, Egypt with $347,342bn and Algeria with $268,885bn.
As the cost of living rises in many parts of Nigeria, especially in big cities like Lagos and Abuja, some states remain surprisingly affordable. From lower rent to cheaper food prices, these places offer a better chance to manage your budget, whether you’re a young professional, a retiree, or just want a break from high expenses.
Based on the latest report from the National Bureau of Statistics (NBS), here are the ten most affordable states in Nigeria right now. These states have lower inflation and better living conditions compared to others.
Here’s a look at the 10 cheapest states, based on recent inflation numbers:
1. Ondo State
Ondo is the most affordable state in Nigeria this year. The overall inflation rate is just 13.4%, and food inflation is 20.6%. Prices even went down by 3.4% last month. Your money goes further here than anywhere else.
2. Cross River State
With 17.1% inflation, Cross River is another great option. Food prices are increasing slowly at 14.5% per year, and the monthly change is just 2.2%—better than many states.
3. Kwara State
Kwara combines city life and affordability. The state’s inflation is 17.3%, and food prices have only risen 15.8% this year. The 2.8% monthly rise is one of the most stable in Nigeria.
4. Akwa Ibom State
Even though it’s an oil-rich state, Akwa Ibom remains affordable. Inflation is 17.4%, and food prices have gone up just 16.4%. Uyo, the state capital, offers good infrastructure at fair prices.
5. Katsina State
In the North, Katsina stands out. Inflation is 17.6%, and food costs have gone up by 22.1%—still better than many other northern states. Monthly food price increases remain under control at 6.4%.
6. Oyo State
Ibadan shows you can enjoy city life without high prices. Inflation is 18.7%, and food prices actually went down by 7.0% last month—a rare and welcome change.
7. Plateau State
Jos, known for its cool weather, has 18.9% inflation. Food prices are higher here at 30.5%, but the monthly rise of 11.4% is still reasonable compared to many states.
Though it’s a wealthy state, Rivers is not as pricey as expected. Inflation stands at 19.2%, and food prices are up 18%. Overall prices dropped by 0.7% last month.
9. Taraba State
Taraba has 19.9% inflation, and food prices are rising at 20.3% yearly. However, the month-on-month increase was only 1.4%, showing good signs for affordability.
10. Ogun & Adamawa States
Both states have 20.9% inflation. But food prices tell a better story—Ogun saw the biggest drop in food costs in the country, falling 7.06% in one month. Adamawa also saw food inflation stay low at 9.52%.
According to the National Bureau of Statistics (NBS), last year ended with Nigeria’s inflation rate at 34.80 percent in December, from 34.60 percent in November. Though described as a marginal increase, it was an increase; and there were difficult implications for many Nigerians.
The figures highlighted continued rise in consumer prices, fuelled by currency depreciation, high energy costs, and persistent supply chain disruptions. The NBS report showed that the average inflation rate for the 12 months ending December 2024 stood at 33.24 percent, up from 24.66 percent recorded during the same period in 2023.
Food inflation was relentless, reaching 39.84 percent on a year-on-year basis in December 2024, from 33.93 percent in December 2023. The rise was attributed to increases in the prices of staples such as yams, rice, maize, and dried fish. The NBS also noted significant price increases in transport fares, meals at local restaurants, and personal grooming services.
Responding to the cost-of-living crisis in the country, 15 states adjusted the newly fixed N70,000 national minimum wage upward. They include Lagos and Rivers (N85,000); Bayelsa, Niger, Enugu, and Akwa Ibom (N80,000). Others are: Delta and Ogun (N77,000), Ebonyi and Kebbi (N75,000), Ondo (N73,000), Kogi and Kaduna (N72,000), Gombe and Kano (N71,000). But the reality is that the new national minimum wage is not a living wage in the country’s current circumstances. Nigerian workers in the public and private sectors deserve what some describe as a ‘living minimum wage.’
For instance, at the Distinguished Personality Lecture organised by the National Institute for Security Studies (NISS) in Abuja, in October 2024, Senator Adams Oshiomhole, a former governor of Edo State, argued that Nigerian workers were poorer now, despite the increased minimum wage. “Inflation severely impacts purchasing power, making it difficult for workers to maintain a decent standard of living,” he observed.
When President Bola Tinubu presented the 2025 Appropriation Bill to the National Assembly, he optimistically declared that the government would reduce inflation to 15 percent this year. Also, in his first media chat last month, he explained how his administration would bring down inflation. Nigerians can’t wait to see this happen.
Importantly, the monthly reports by the NBS showing continuing inflation should make the authorities responsive to the reality that too many Nigerians are struggling to cope with the pain of inflation.
Sir: National Bureau of Statistics (NBS) broke good news about Nigeria’s trade surplus/trade balance which grew to N5.81 trillion in third quarter of 2024. In 2023, Nigeria’s estimated trade surplus amounted to around $11.94 billion U.S. dollars according to Statista. Please note that the governor of the Central Bank of Nigeria, Olayemi Cardoso, revealed that Nigeria’s foreign exchange reserves have reached over $40bn, marking their highest level in 33 months. The question that goes thus, is $40billion foreign reserve sufficient for a country that has $362.8billion GDP and aspiring for trillion dollar GDP?
Interestingly, considering the progressive strides of Nigeria’s exports against imports, one wonders why the Nigeria’s currency refuses to “roar” against the dollar or why the local economy is yet to feel any reasonable impact of the progress. The reason for this reality is because the trade surplus (5%-15%) is not enough for our current foreign reserve and dollar demands. Nigeria needs minimum of $100billion in its foreign reserve for fair strength of Naira (fixed or floating). Brazil enjoys $300billion+ in foreign reserve as at 2023 and Indonesia has $146.36 billion in foreign reserve according to CEIC. The comparison is necessary considering the population similarities and economic peculiarities. Indonesia obviously needs the Brazilian benchmark of foreign reserve to further save its weaker currency too.
Unfortunately, Naira has lost its value by over 200% in the last 15 years and to take advantage of the unplanned weaker Naira, we need to be more aggressive with cheaper exports. Importantly, the increased exports for 2023/2024 are not intentional or coordinated but response to market dynamics and unfortunate realities (coping mechanism) which forced non-oil exporters to export more at the expense of the economy leading to more food insecurity. For example, the case of cassava and soya beans boosted exports at the expense of local sufficiency etc. However, oil exports still dominated exports for 2024.
Albeit, countries that have practiced weaker currency for export advantage do so intentionally and temporarily, e.g. China, South Korea etc. Some countries also risk such strategy after years of local currency stability and strength (Japan). Countries applying such weaker currency for export advantage are so intentional with aggressive exports to gain massive foreign reserve to later defend the currency against dollar with boosted foreign reserve, for example, Vietnam. Nigeria has no business in the last 20 years devaluing its currency when it has no deliberate plans for short-term or midterm aggressive exports.
The trade surplus news is a progressive report but this progress doesn’t seem coordinated, organic or significant enough to sufficiently boost strength of Naira to N500 to one dollar for example. We need the trade surplus standing at $50billion annually (at least) to make significant positive impact on the strength of Naira. The trade surplus of Qatar for 2023 was $87billion plus (under 20million population). This implies that with $70billion trade surplus in 2025, I can conveniently predict N400-N600 to one dollar with fixed exchange preferably, to tame likely market instability and volatility peculiar to developing economies. International trade is a dynamic and strategic market game that needs intentional strategies targeting export promotion and not imports substitution.
Yet again, figures from the National Bureau of Statistics (NBS) indicate that the cost-of-living crisis in the country is unrelenting. According to the agency, the inflation rate rose to 33.8 percent in October from 32.70 percent recorded in September.
The Statistician General of the Federation, Prince Adeyemi Adeniran, provided further information in a statement. He said:” The rise in food inflation was caused by an increase in the average prices of palm oil, vegetable oil, etc. (oil & fats class), mudfish, croaker (apo), fresh fish (obokun), etc. (Fish Class), Dried Beef, Goat Meat, Mutton, Skin meat, etc. (Meat Class), and Bread, Guinea Corn flour, Plantain flour, Rice, etc. (Bread and Cereals Class).
He also said: “The highest increases were recorded in prices of Bus Journey within the city, Journey by motorcycle, Bus journey intercity, etc. (under Passenger Transport by Road Class), Rents (Actual and Imputed Rentals for Housing Class), Meal at a local Restaurant (Accommodation Service Class), and hair cut service, woman hairbrush, women’s hairdressing, etc. (Hairdressing salons & personal grooming establishments Class).
The narrative has not changed. The prices of staples keep increasing. The same thing is true regarding housing rentals, transport, and medical services.
Notably, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, observed that the identified main factors driving inflation, “the depreciating exchange rate and surging fuel price,” were “yet to be effectively subdued.”
However, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, recently declared that “The two critical reforms on market-based pricing of Premium Motor Spirit and foreign exchange are now at the stage of results delivery.”
At an interactive session with the Senate Committee on Finance, he was reported saying, “These two pillars of the economic reforms… have taken positive shape,” adding, “I think we need to commend Nigerians for staying the course to this stage of getting benefits.”
Many Nigerians who are still struggling with the cost-of-living crisis will not agree with the minister that the country is at the stage of benefitting from the economic reforms. The minister’s assertion is not supported by the increasing prices of goods and services reported by the NBS.
When inflation is deflated, the authorities will not need words to communicate that better times have arrived.
A recent report showing declining level of foreign direct investment (FDI) into the country has further reignited calls and concerted efforts towards investments by economic analysts as a buffer for the economy, reports Ibrahim Apekhade Yusuf
There are clear and present dangers: further decline and diminishing rate of foreign investment drive into the country may not bode well for the economy either in the short, medium to long term.
According to the National Bureau of Statistics (NBS) Capital Importation report for the second quarter of the year, capital importation in the second quarter of 2024 declined by 22.85% from $3.37 billion in the first quarter of the year to $2.60 billion.
The decline in FDI presents a concern for Nigeria’s long-term economic prospects, especially as the country continues efforts to diversify its economy beyond oil and gas.
FDI is often viewed as a stable source of capital that can drive job creation and infrastructure development.
The current figures, however, suggest that foreign investors remain wary of Nigeria’s investment climate due to policy uncertainty, security challenges, and shifting global economic trends.
The Nigerian government has introduced various reforms to improve the ease of doing business, aiming to attract more foreign investment. Yet, the latest data suggests that these efforts have not yet translated into increased long-term capital inflows.
Earlier this year, President Bola Tinubu revealed that within the first nine months of his term, his administration has successfully drawn $30 billion in Foreign Direct Investment (FDI) commitments, bolstering the Nigerian economy.
While speaking to the fears of a depleting investment ecosystem, Anambra State Governor Chukwuma Soludo expressed concern over the insufficient inflow of Foreign Direct Investments (FDI) into Nigeria, indicating that the nation is not maximising its potential on both the African continent and the global stage.
Speaking at the 1st Abuja Business and Investment Summit last Wednesday, Soludo pointed out the troubling trend of negative returns on capital in Nigeria. “Coincidentally, we had a table here showing the charts as to where Nigeria is relative to the rest of the world in terms of inflation and interest rate regimes, so to speak. In many places, you have real returns to capital, but we still have negative returns right here.”
He emphasised the global landscape of investment flows, noting that “the flows of Foreign Direct Investments across the world mostly toward Asia, and Africa received, for example, barely 3-4 percent of it last year.”
According to Soludo, Nigeria is “grossly punching below its weight” in terms of attracting both portfolio and Foreign Direct Investment when compared to its population and economic size.
Despite these challenges, he highlighted the urgency for Nigeria to secure a sustainable investment future, asserting that the country has the capacity not only to participate but to lead in the global economy of the 21st century. “As I said, we are punching way below our weight, as it were. But that is a point I want you to note,” he stated.
During his remarks on the summit’s theme, “Optimising Investment Through Partnership,” Soludo underscored the necessity of strategic investments in shaping Nigeria’s future. He stressed the importance of considering the broader global context influencing investment decisions, saying, “Investments don’t happen in a vacuum. They happen within a context.”
Maureen Tamuno, Managing Director/CEO of Abuja Investments Company Limited, also spoke at the summit, expressing confidence in the expertise of the selected panelists.
She noted that their insights would pave the way for economic growth.
“This summit is aimed at promoting investment opportunities in the Federal Capital Territory and creating a platform for networking among investors,” she stated.
Tamuno encouraged participants to expand their thinking beyond conventional business practices, emphasising that the discussions would inspire innovative approaches. “I believe discussions at this event will inspire us to think bigger, pushing the boundaries of what’s possible in business and investment,” she added.
She concluded by highlighting the significance of strong partnerships in achieving mutually beneficial outcomes: “Together, we can optimise our investments and drive the impactful change that our organisations and countries need for economic prosperity.”
However, when compared to the same period last year, Nigeria’s capital importation rose by 152.8% from $1.03 billion to the current figure.
In terms of capital imports by type, Portfolio Investment led with $1.40 billion, representing 53.93% of total capital importation, followed by other investments at $1.169 billion, making up 44.92%.
The foreign capital inflow into Nigeria in Q2 2024 paints a picture of a diverse range of international investors, each contributing to the country’s economic growth.
While some nations have scaled back, others have ramped up their investments, indicating shifting dynamics and the attractiveness of Nigeria as an investment destination.
Investment outlook as at 2024 half year
From available information sourced from the NBS website, Nigeria received foreign capital in Q2 2024, from a record 10 countries including Saudi Arabia, Belgium, Hong Kong, Switzerland, UAE, Mauritius, South Africa, to mention just a few.
For instance, in Q2 2024, Belgium’s investment in Nigeria amounted to $14.32 million, which represents a significant decline of 75.79% year-on-year compared to $59.15 million in Q2 2023. The slight quarter-on-quarter decrease of 2.91% from $14.75 million in Q1 2024 indicates a continued cautious approach by Belgian investors. The reduction may be due to economic uncertainties in Nigeria or strategic shifts in Belgium’s investment priorities.
Switzerland contributed $14.55 million in Q2 2024. This is a substantial increase compared to its absence in Q2 2023, reflecting renewed Swiss interest in Nigeria’s market. The investment also grew by 202.08% quarter-on-quarter from $4.80 million in Q1 2024, suggesting a strategic exploration of new opportunities in sectors such as finance.
With a total investment of $15.47 million in Q2 2024, Hong Kong showed a significant year-on-year increase of 531.02% from $2.45 million in Q2 2023. This growth reflects a strengthening economic relationship between Asia and West Africa. The 91.19% rise from $8.09 million in Q1 2024 further indicates growing confidence among Hong Kong investors in Nigeria’s economic prospects.
Saudi Arabia invested $54.55 million in Nigeria in Q2 2024, marking an extraordinary year-on-year increase from almost zero ($0.01 million) in Q2 2023. However, there was a decline of 41.04% from the $92.51 million recorded in Q1 2024. This suggests that while Saudi Arabia sees value in the Nigerian market, there may have been a strategic reassessment of its investments.
The United States contributed $81.58 million in Q2 2024, reflecting a significant year-on-year decline of 70.01% from $271.92 million in Q2 2023. The quarter-on-quarter decrease of 8.61% from $89.27 million in Q1 2024 indicates a cautious approach by American investors, potentially driven by economic and policy uncertainties in Nigeria.
In Q2 2024, the UAE’s investment in Nigeria amounted to $143.44 million. This reflects a 41.82% increase compared to $101.13 million in Q2 2023, highlighting strengthened economic ties between the two countries. The UAE also saw a quarter-on-quarter rise of 40.96% from $101.76 million in Q1 2024, suggesting continued interest in sectors like real estate and logistics.
Mauritius emerged as a significant investor in Nigeria in Q2 2024 with a total investment of $250.70 million. This represents a massive year-on-year increase of 1,369.94% from $17.05 million in Q2 2023. The quarter-on-quarter growth of 39.57% from $179.62 million in Q1 2024 indicates sustained confidence in Nigeria’s market, likely driven by financial services and regional partnerships.
The Republic of South Africa contributed $255.98 million in Q2 2024, a year-on-year increase of 86.91% compared to $136.95 million in Q2 2023. However, there was a quarter-on-quarter decline of 56.05% from $582.34 million in Q1 2024. This suggests that while South Africa remains a key investor in Nigeria, the drop in Q2 2024 might reflect a shift in investment focus or a strategic reassessment.
The Netherlands invested $577.82 million in Nigeria in Q2 2024, representing an impressive year-on-year increase of 871.60% from $59.45 million in Q2 2023. The substantial quarter-on-quarter growth of 603.82% from $82.09 million in Q1 2024 indicates strong investor confidence in Nigeria’s economic potential, likely driven by opportunities in sectors such as energy and infrastructure.
The United Kingdom was the largest source of foreign investment in Nigeria in Q2 2024, contributing $1.12 billion. This represents a significant year-on-year increase of 752.02% from $131.49 million in Q2 2023, highlighting the strength of the economic relationship between Nigeria and the UK. However, there was a quarter-on-quarter decline of 37.96% from $1.81 billion in Q1 2024, suggesting a more cautious investment stance amid Nigeria’s evolving economic conditions.
Furore over FDI
While attempting a prognosis of the reason for the declining FDI inflows in recent times, Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, attributed the lull to the tough economic climate.
“The macroeconomic environment, particularly the FX situation, is not favourable for FDI,” he said, adding that this has led to the departure of many multinationals, further reducing investment inflows.
Yusuf noted that beyond the FX issues, structural challenges like energy deficits and logistical hurdles continue to weigh heavily on investor confidence.
He advised the government to prioritise strengthening the naira to attract investment into productive sectors.
Also, Professor Sheriffdeen Tella, a professor of Economics at Olabisi Onabanjo University, Ogun State, linked the slum in FDI to the naira’s depreciation, saying, “the fall in naira is one of the reasons for the drop in FDI.”
He added that high interest rates have weakened the purchasing power of Nigerians, thereby reducing demand for goods and diminishing the profitability of businesses.
Tella also noted that when domestic producers struggle, it sends a bad signal to potential foreign investors, referencing the challenges faced by companies like Dangote Refinery.
Tella argued that resolving the FX crisis, expanding the economy, and creating a more business-friendly climate are crucial for boosting Nigeria’s FDI.
In the view of Kehinde Maxwell, a Business Incubation expert, 2024 has seen a drastic change in the nation’s FDI flows.
“Nigeria has recorded a steady decline in FDI over the past two years. This has had a significant effect on the populace. Following the exit of pharmaceutical giant, GlaxoSmithKline in 2023, drug prices rose by 900 per cent. To top it off, the country is being overlooked for investment in favour of other African countries, even those with a lower GDP. For instance, Kenya was recently announced as the site of a $1 billion geothermal-powered data centre to be built by Microsoft and G42. The Nigerian government is scrambling to steady the exchange rates, whilst inflation is rising. What’s worse is that the government’s policies aimed at easing the crisis have not yielded significant results,” he said.
Pressed further, he said, “Nigeria is not only witnessing a decline in foreign investment, but it is also experiencing an exodus of foreign investors. For example, Procter & Gamble, a multinational consumer goods company and producer of household brands including Pampers and Tampax exited Nigeria in 2023. This mass exodus is indicative of a growing unwillingness to invest in Nigeria.
“The market risk for investors and entrepreneurs within Nigeria is exaggerated. The Central Bank of Nigeria has, this year alone, increased interest rates three times. The federal and state governments have often unexpectedly enacted policies that affect business activities in their jurisdictions, without adequately conferring with stakeholders, leaving them with little recourse to legal action.
“The example of the Lagos State partial ban of commercial motorcycles, (okadas), in February 2020 readily comes to mind. The transportation service providers affected included Gokada, a company co-founded by a Bangladeshi-American national that had managed to raise $5.3 million from local and foreign investors only a year before. The okada ban forced the company to dismiss 50 per cent of its workforce and venture into logistics. Moreover, in 2023, the Corporate Affairs Commission released a notice increasing the minimum paid-up share capital for companies with foreign participation from ₦10 million to ₦100 million, with a six-month compliance deadline which was then withdrawn less than a week later. These events demonstrate instability, and the lack of regulatory transparency further complicates risk assessment for foreign investors.”
Andre Schulten, the chief financial officer of Procter & Gamble, attributed the company’s exit from Nigeria to the difficulty for a dollar-denominated company to create value in Nigeria and operate within its macroeconomic environment. In a similar vein, Nestlé reported a loss of over ₦100 billion before tax in 2023, with the company noting that ‘despite the strong operational performance, the net profit is impacted by significant devaluation of the naira.’ Both instances demonstrate the business risks that Nigeria’s economic climate has exposed investors to.
To address the lacuna, Peter Oyerinde said there is a need to enact good legislation that supports business survival.
“For Nigeria to revive FDI inflow, it must level up through fiscal and monetary policies. There is a need for a more friendly business climate for Nigerians and foreigners alike. I think this is a step in the right direction and demonstrates willingness from the Nigerian government to improve the economic climate in the country and attract foreign investment.
“In addition to legislation, the government must continue to create a low-risk climate for investors. A major factor in this would be in reducing business costs by improving the power sector. Nigeria’s power supply issues have been cited as a hindrance to business operations as they drive up the cost of production. Before its exit, Kimberly Clarke reportedly spent ₦100 million monthly on power generation. It must be said, though, that while seeking increased FDI inflows, the Nigerian government must work towards creating a balance between raising foreign investments and protecting domestic interests.”
Search for FDI continues
Vice President Kashim Shettima, had a fortnight ago made a compelling case for global investors to capitalise on Nigeria’s burgeoning investment opportunities.
Speaking at the Epicenter in Stockholm, Sweden, during his two-day visit to bolster trade and bilateral relations, Shettima emphasised Nigeria’s strategic advantages, including its large and youthful population, digital economy, agriculture and renewable energy sectors.
“Nigeria is an ambitious nation, bound by the limitless potential of the Fourth Industrial Revolution,” Shettima said, highlighting the country’s commitment to innovation and progress.
He cited the Tinubu administration’s bold reforms, such as unifying exchange rates and removing fuel subsidies, as crucial steps toward sustainable economic growth.
The Vice President’s “Renewed Hope Agenda” prioritises creating a competitive business environment, attracting foreign and domestic investments. Financial sector reforms, including the revised Cashless Policy and Open Banking Framework, promote financial inclusion and innovative financial products.
Shettima identified digital economy, agriculture and renewable energy as key sectors addressing global challenges like food security, climate change and economic growth.
He urged Swedish investors to seize Nigeria’s opportunities, fostering collaboration across finance, renewable energy, digital innovation, agriculture and education.
Trade between Nigeria and Sweden grew 30% in 2022, demonstrating the potential for deeper collaboration. Shettima emphasised Nigeria’s sophisticated financial sector, resilience and strategic advantages, driven by its youthful population’s creativity and knowledge-sharing.
The National Bureau of Statistics (NBS) yesterday said Nigerians spend an average N10,239.7 on liquefied petroleum gas (LPG) cooking gas monthly.
This was contained in its report titled: “Nigeria Residential Energy Demand-Side Survey (NREDSS), 2024, which the Statistician General of the Federation Adeyemi Adeniran launched in Abuja.
The report also said 19.4 percent of households reported using LPG during the reference period as their source of cooking.
“This means that about one in every five households use LPG,” according to the data.
The report added that about 41 percent of households reported purchasing fuelwood, closely followed by cutting/collection (39.0 percent), and only 18.9 percent of households used other means such as barter, gift, borrowing etc.
it added that more than half of the fuelwood cut/collected by households, 55.3 percent were branches, stems, and trees.
“An estimated 67.8 percent of households used the fuelwood either for domestic, agricultural, commercial, cultural, or religious purposes. The survey also found that one in every five households (22.0 percent) used charcoal during the reference period. Among households using charcoal, 21.6 percent purchased the product, and only 0.3 and 0.6 percent acquired it through their own production, and other means respectively.”
The Statistician General of the Federation and Chief Executive Officer of NBS Prince Adeyemi Adeniran said at the launch that the survey which is a pilot was conducted in nine states to get data on energy use in Nigeria.
He said the report showed over 58 percent of households are connected to the national grid across the nine states surveyed and 86.6 percent had electricity supply during the reference period.
“Out of the total households connected to the national grid, 85.2 percent used an estimated billing system while 14.8 percent reported using a pre-paid billing system. In addition, the average monthly expenditure of households on electricity was estimated at N4,155.8 during the reference period.”
He added that exercise is coming at this critical period in Nigeria, when energy demand, usage, and pricing have all been major topics of discussion in recent years.
“The insights contained in this report provide sound evidence for policymakers, operators, and the general public to apply in these discussions, even as the government seeks better outcomes for the energy sector as a whole.”
He added that access to reliable and affordable energy is a fundamental human right and a cornerstone of economic growth.
“The residential sector, which encompasses our homes, informal household businesses, and communities, is a major consumer of energy. Understanding the patterns, trends, and challenges within this sector is essential for developing effective policies and strategies to meet the nation’s energy needs.”
Disturbing figures from the National Bureau of Statistics (NBS) indicated relentless inflation in the country. According to its latest Consumer Price Index report, month-on-month food inflation rate, for instance, increased in September, notably affecting prices of staples such as rice, maize, beans, and yams. There were also significant price increases in housing rentals, transport, and medical services.
Responding to the NBS report, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, was reported saying, “The reality is that the dynamics driving inflation are yet to be effectively subdued.” He observed that these factors include “the depreciating exchange rate, surging fuel price, rising transportation costs, logistics and supply chain challenges, high energy cost, climate change including resultant incidents of flooding, insecurity in farming communities and structural bottlenecks to production.”
Taming inflation demands tackling these challenges, which are mainly the consequences of reforms introduced by the President Bola Tinubu administration. The World Bank recently said the reforms were crucial for the country’s long-term stability. “Turning back or opposing the reforms would only make things worse,” said Ndiame Diop, World Bank country director for Nigeria, at the launch of the Nigeria Development Update (NDU) report in Abuja.
Predictably, the World Bank’s position drew public criticism in a country struggling with a crushing cost-of-living crisis. However, Diop added that the ongoing reforms “must be accompanied by reforms enabling the private sector to create more and better jobs. With targeted support to youth and women.” This was a way of saying that the hard results of the Federal Government’s reforms can be softened. The World Bank report also noted the need for structural reforms, such as reducing trade barriers, improving infrastructure, improving the business environment and supporting household businesses for inclusive growth.
If the ongoing reforms were inevitable to achieve a better future for Nigerians, the authors and promoters of the reforms should understand that it is counter-productive to carry out such reforms without considering and implementing sufficiently ameliorative measures.
The alarmingly deteriorating cost-of-living crisis in the country is a bad advertisement for the Federal Government’s reforms. It is important to ask what the three levels of government have done, and what they are doing to save Nigerians from hardship occasioned by the reforms. They are expected to urgently find solutions to the cost-of-living issues in the spaces they govern.
No argument that reforms negatively impacting Nigerians are a necessary means to a positive end will make sense if the people can’t breathe.
