Out of the 37 states, which includes the Federal Capital Territory (FCT), 34 states failed to attract any foreign investments. 

The distribution of capital importation by destination, as detailed in the recent report by the National Bureau of Statistics (NBS), highlights huge differences that point to the uneven distribution of factors driving investment decisions in the country.

High Performers in Q1 2024

Lagos State: Lagos stands undisputed in attracting foreign investments. In Q1 2024, the State received $2,782.41 million. This is a big increase from its total of $2,503.44 million in 2023. Lagos’ solid economic position and infrastructure continue to make it a prime destination for investors.

Abuja (FCT): The Federal Capital Territory saw reduced investments, with $593.58 million in Q1 2024. This follows a total of $1,170.00 million in 2023, showing the need for Abuja to up its game in attracting foreign capital.

States with Minimal Investments

Ekiti State: Ekiti received a minimal investment of $0.01 million in Q1 2024. This is consistent with its performance throughout 2023, where it attracted a total of $0.05 million. The low figures reveal a need for well-thought-out initiatives to enhance investor confidence.

States with No Recorded Investments

A huge number of states recorded no investments at all in Q1 2024. While some States like Abia, Adamawa, Akwa Ibom, Anambra, Delta, Niger, Ogun, Ondo and Rivers attracted investment in 2023, they were among states that failed to attract investment in Q1 2024. 

The States with no investment record so far in 2024 include:

1. Abia
2. Adamawa
3. Anambra
4. Akwa Ibom
5. Bauchi
6. Bayelsa
7. Benue
8. Borno
9. Cross River
10. Delta
11. Ebonyi
12. Edo
13. Enugu
14. Gombe
15. Imo
16. Jigawa
17. Kaduna
18. Kano
19. Katsina
20. Kebbi
21. Kogi
22. Kwara
23. Nasarawa
24. Niger
25. Ogun
26. Ondo
27. Osun
28. Oyo
29. Plateau
30. Rivers
31. Sokoto
32. Taraba
33. Yobe
34. Zamfara

The big difference between Lagos and the majority of other states tells us there is an obvious issue in Nigeria’s economic industry. This is the uneven distribution of foreign investments. 

Several factors could contribute to this disparity, including infrastructure, as states with better infrastructure, like Lagos and Abuja, are more likely to attract foreign investments. 

Again, states that have investor-friendly policies and regulatory environments tend to receive more investments, while security and stability also play a role in attracting investors. 

Additionally, market size and economic activities influence investment decisions, as larger markets and lively economic activities in certain states draw more foreign capital.

Improvement in these areas could help distribute investments more evenly across the country, facilitating balanced economic growth.

The report on Nigeria’s capital importation for the first quarter of 2024 showed that the banking sector was the leading recipient of foreign capital, attracting $2,067.44 million. This represents 61.24% of the total capital imported into the country during this period. 

Several banks stood out as top performers in capital importation for Q1 2024, with the list led by Stanbic IBTC Bank Plc, which received the highest capital importation among Nigerian banks.

The Bank secured $1,257.38 million, accounting for 37.24% of the total capital imported into Nigeria, highlighting Stanbic IBTC’s strong position and appeal to foreign investors.

Following Stanbic IBTC, Citibank Nigeria Limited attracted $547.71 million, making up 16.22% of the total capital importation, while Rand Merchant Bank received $528.73 million, which represents 15.66% of the total capital imported. 

Standard Chartered brought in $399.41 million, showcasing its continued influence and trustworthiness in the eyes of global investors, as Access Bank received $278.18 million, rounding out the list of top-performing banks in terms of capital importation for the quarter.

Other banks, including First Bank and Zenith Bank, had $98.71 million and $96.98 million respectively.

The solid performance of these banks is a positive indicator for Nigeria’s economic stability and growth prospects. 

The capital inflows into the banking sector show that foreign investors are optimistic about the country’s financial institutions and their ability to manage and grow investments effectively.

NBS’ data emphasizes the indispensable role of the banking sector in driving Nigeria’s economic development. The inflows into banks are likely to facilitate increased lending, support business expansions, and stimulate economic activities across various sectors.

These measures, designed to reduce operational costs and encourage investment retention, include tax breaks, customs duties waivers, and innovative power solutions.

NEPZA’s Managing Director, Olufemi Ogunyemi, spoke on the authority’s focus on sustaining business operations in Nigeria despite the challenging economic environment.

Speaking to the News Agency of Nigeria (NAN), Ogunyemi outlined the incentives available to businesses in free trade zones, which are intended to attract and retain foreign direct investment (FDI).

“This initiative aims to reduce production costs and incentivise companies to maintain operations in Nigeria. We offer a range of incentives designed to attract and retain foreign direct investment,” Ogunyemi stated. 

“These incentives include customs duty waivers, tax breaks, and deferred payments to the government at the startup phase of businesses”

In addition to financial incentives, NEPZA is tackling one of the most vital issues affecting businesses in Nigeria: power supply. The authority is providing power generation solutions to meet the needs of companies within its zones.

This addresses a huge issue for many multinationals that have noted high power costs as a reason for relocating their operations.

Ogunyemi also highlighted the reciprocal nature of NEPZA’s support. In exchange for the incentives, foreign companies are required to contribute to local workforce development. This includes training Nigerians to skilled, semi-skilled, and professional levels, as part of a broader initiative he referred to as “Community Social Regeneration.”

“NEPZA requests that these foreign direct investors employ and train Nigerians. They train Nigerians on skilled, semi-skilled, and even sometimes up to professional level. These are statutory requirements that are part of this handshake,” Ogunyemi explained.

NEPZA is improving the ease of doing business within its zones by functioning as a one-stop shop for investors. This simplifies interactions with various government agencies, simplifying processes and reducing bureaucratic issues.

Despite past inconsistencies in enforcing these directives, Ogunyemi assured that during his tenure, NEPZA would implement these measures for the benefit of both investors and the nation.

He reiterated his optimism in Nigeria’s potential to attract and sustain foreign investments, despite global economic challenges.

He said, “We are witnessing an unfortunate trend where companies are relocating due to issues like foreign exchange access and power supply. To mitigate these challenges, NEPZA is actively involved in providing power generation solutions tailored to the needs of businesses operating within its zones.

“And on top of that, there is something people call CSR but I call it Community Social Regeneration. I think that is a more accurate description. And it is part of the requirements we have on all these investors.”