Nigeria’s FDI Plummets to Historic Low of $29.83m in Q2 2024

Samuel Mobolaji

Nigeria’s Foreign Direct Investment (FDI) for the second quarter of 2024 has plunged to a record low of $29.83 million, according to the latest figures from the National Bureau of Statistics (NBS).

This marks the lowest level ever recorded, based on available data going back to 2013, and highlights the country’s mounting struggle to attract long-term foreign investments.

The steep decline represents a 65.33 per cent drop from the $86.03 million recorded in the same period in 2023, and an alarming 74.97 per cent fall from the $119.18 million reported in the first quarter of 2024.

This sharp contraction underscores a significant erosion of investor confidence, as Nigeria continues to grapple with a challenging domestic investment climate and unfavorable global economic conditions.

The bulk of the FDI in Q2 2024 came from equity investment, totaling $29.82 million—a staggering 74.98 per cent decline from the $119.17 million reported in Q1 2024. Year-on-year, equity investment also fell by 65.33 per cent from the $86.02 million recorded in Q2 2023.

The other component of FDI, classified as “Other Capital,” showed a meager inflow of just $0.0085 million, down 33.33 per cent from $0.01275 million in both Q1 2024 and Q2 2023.

This historic drop in FDI inflows underscores the broader challenges Nigeria faces in attracting sustainable, long-term investments. While the country has traditionally relied on FDI to support economic growth through infrastructure development and job creation, the recent downturn signals growing investor wariness about the nation’s economic policies, security landscape, and currency volatility.

Despite the sharp decline in FDI, total capital importation for Q2 2024 stood at $2.60 billion, driven largely by foreign currency loans. Loans accounted for $2.55 billion, or 98.08 per cent of total inflows, as foreign investors increasingly favored short-term financial instruments over equity commitments. This preference for loans over direct investment highlights growing risk aversion.