Nigeria borrowed $1.21 billion while investors avoided 28 states.

Nigeria increased its capital imports in the first half of 2023 by borrowing $1.21 billion from abroad.

This is because, according to a report from the National Bureau of Statistics on Nigeria Capital Importation, 28 states failed to draw any foreign investments during the period under consideration. Total capital imports fell by 30.42% annually in the first half of 2023, from $3.11 billion in the same period of 2022 to $2.16 billion in 2023.

Nigeria is increasingly dependent on foreign loans to increase capital imports as problems like insecurity and a challenging business climate continue to hinder foreign direct investments into the nation.

Foreign loans increased from $1.03 billion in the same time of 2022 to $1.21 billion in the first half of 2023, an increase of 17.43%.

According to the NBS, other investments accounted for 81.28 percent ($837.34 million) of the total capital imported in Q2 2023, followed by portfolio investments with 10.37 percent ($106.85 million) and foreign direct investments with 8.35 percent ($86.03 million).

The production sector saw the largest inflow with $605.04 million, accounting for 58.73 percent of all capital imported in Q2 2023. The banking sector came in second with $194.58 million, accounting for 18.89 percent, and shares came in third with $68.63 million, accounting for 6.66 percent.

The only states that attracted foreign investors were Lagos, Abuja, Adamawa, Akwa Ibom, Anambra, Ekiti, Niger, Ogun, and Ondo.

The World Bank recently reported a decline in foreign direct investment into Nigeria as a result of low foreign exchange availability, security worries, and other structural issues.

Akpan Ekpo, an economics lecturer at the University of Uyo, recently told The PUNCH that international investors are crisis-averse and that the country’s current insecurity crisis has diminished investor confidence.

The states didn’t draw any investments for obvious reasons, according to Ekpo. When your location lacks security, there is no way you can draw in international investment. They won’t show up.