In a concerning trend for Nigeria’s economy, Foreign Direct Investment (FDI) in the second quarter of 2024 plummeted to just $29.83 million, a staggering 65.33% decrease from the $86.03 million recorded during the same period last year. This marks the lowest level of FDI since tracking began in 2013.
The latest capital importation report from the National Bureau of Statistics (NBS) reveals that this drop also represents a dramatic 74.97% decline from the $119.18 million reported in the preceding quarter.
The report shows that most of the FDI in Q2 2024 came from equity investments, amounting to $29.82 million. This figure reflects a sharp decrease of 74.98% compared to $119.17 million in Q1 2024, and a 65.33% year-on-year decline from $86.02 million in Q2 2023.
Additionally, the “Other Capital” component of FDI recorded a minimal inflow of $0.0085 million in Q2 2024, which is down by 33.33% from $0.01275 million in both Q1 2024 and Q2 2023. Notably, FDI accounted for only about 1.15% of the total capital importation of $2.60 billion in the quarter under review.
In contrast, foreign currency loans, including portfolio investments and direct loans, made a significant contribution of $2.55 billion, representing 98.08% of the total inflows. However, both portfolio investments and foreign currency loans also faced notable declines.
Portfolio investments stood at $1.40 billion in Q2 2024, marking a 74.97% drop from $5.60 billion in the previous quarter and a 65.33% decrease from $4.05 billion reported in Q2 2023. Foreign loans recorded an inflow of $1.15 billion, reflecting a 74.98% decrease from $4.60 billion in Q1 2024 and a 65.33% decline from $3.32 billion in Q2 2023.
Despite these declines, Nigeria’s total capital importation of $2.60 billion represented a significant increase of 152.81% year-on-year compared to $1.03 billion in Q2 2023, though it marks a decline of 22.85% from the $3.38 billion recorded in the first quarter of 2024.
The NBS report notes, “In Q2 2024, total capital importation into Nigeria stood at $2,604.50 million, higher than the $1,030.21 million recorded in Q2 2023, indicating an increase of 152.81%. However, in comparison to the preceding quarter, capital importation declined by 22.85% from $3,376.01 million in Q1 2024.”
With portfolio investments emerging as the primary driver of capital inflows, contributing $1.40 billion or 53.93% of the total, the significant declines raise critical questions about the future of foreign investment in Nigeria.
