By Yinka Kolawole
The Nigerian Investment Promotion Commission (NIPC) has reported $8.41 billion new investment announcements in Nigeria in the first quarter of 2021 (Q1 2021), with the manufacturing sector attracting 60 percent, reflecting the gradual return of investors’ confidence after the COVID-induced decline.
The Q1 2021 investment profile was 75 percent more than the $4.81 billion reported in the same period in 2020 and 8.38 percent higher than the $7.76 billion recorded in the previous quarter (Q4 2020).
In its “report of investment announcements in Nigeria (January – March 2021)” just released, NIPC also noted that Balyesa and Delta States emerged top investment destinations during the period, followed by Akwa Ibom and Lagos States.
The report stated: “Bayelsa State received the largest share of the announcements with $3.6 billion in mining and quarrying. Delta State recorded $2.94 billion worth of announcements in seaport construction and power transmission, Akwa Ibom State had $1.4 billion announced in mining and quarrying, and Lagos State with announcements totalling US$0.26 billion in finance, insurance, and manufacturing.”
The report revealed that the leading four destinations accounted for 97 percent of the total investments announced as against 56 percent in the corresponding period in 2020.
By sector, manufacturing received the largest investment accounting for 60 percent at $5.08 billion, followed by construction at $2.90 billion (34 percent), electricity at $0.26 billion (3 percent), agriculture $0.11 billion (1 percent), and others at $0.07 billion (1 percent).
Domestic investors accounted for 35 percent of the announcements at $2.95 billion. Other sources were Morocco $1.40 billion, United Kingdom $0.24 billion, and United States $0.08 billion.
In terms of volume, NIPC said Nigeria received 15 projects across eight states compared to Q1 2020 with 19 projects across 14 states including the Federal Capital Territory (FCT).
The Commission, however, said that its report may not contain exhaustive information on all investment announcements in Nigeria during the period.
NIPC also noted that investment announcements do not necessarily translate to actual investment inflow. For instance, out of a total investment announcements of $16.74 billion reported in 2020, only $2.6 billion actual foreign direct investment (FDI) inflow was recorded.
“The gaps between announcements and actual investments demonstrate investment potential announcements and actual investment potential.
“A more proactive all-of-government approach to investor support, across federal and state governments is required to convert more announcements to actual investments,” NIPC stated.