Diminishing Foreign Direct Investments: Why Is Nigeria Facing A Challenge In That Destination ?
The Oasis Reporters
April 21, 2024
One of the major challenges Nigeria is currently facing now is that of diminishing foreign direct investments. No matter the spin we put on it, it speaks directly to the amount of confidence foreigners have on a country.
Notable Nigerian professor, Ndubuisi Ekekwe writes:
Yes, “revelations from a presentation by Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, have shed light on a concerning trend in the country’s foreign direct investment (FDI).
“According to Edun’s presentation, FDI in Nigeria has seen a significant decline, plummeting from $22.7 billion in 2014 to a mere $3.7 billion in 2023.
This staggering $19 billion drop over the span of a decade underscores the challenges facing Nigeria’s investment climate and economic stability.”
Note: Year 2014 – $22.7 billion Year 2023 – $3.7 billion That is statistically significant.
The question is this: why did that happen?
You can also add: do Nigerians really care? When we write here that Nigeria has lost a decade, many will attack me because my name is Ndubuisi. But if for the sake of this post, you assume, I am Wale Adamu Ndubuisi Effong …, would you like to understand why investors have moved on from Nigeria, that within a decade we saw a $19 billion drop?”
International corporations and startups are not only ignoring Nigeria but withdrawing their money in Nigeria faster than any time in history – It Is doubtful if the Nigerian government, especially those assigned to run the economy understand what is really going on.
The slide in FDI inflows didn’t start today and recall that in 2020, a German newspaper, Frankfurter Allgemeine wrote an editorial in rebuttal to the plea by then President Buhari who was seen requesting the EU to invest in Nigeria, telling them that the country has a highly educated workforce ready to work.
Frankfurter Allgemeine in it’s editorial rebuttal gave an overview on why FDI to Nigeria was drying up. The editorial
warned Germany “not to sink taxpayers money in a corrupt swamp. According to the Corruption watchdog, Transparency International, Nigeria’s corruption index has swum to its lowest level yet.
(1) The paper noted that Nigeria invested the smallest amount of any African country on education, job training, and human resources while the EU spends an all-time high on their children’s education.
(2) It also noted that Buhari’s travel budget then was twice that of then German Chancellor, Angela Merkel.
Long time Nigerian resident in Germany, Engr. Cade Agbugba then made a post saying “no matter how very respectful Europeans are even when they know you are a buffoon, make no mistakes about believing that they are idiots with easy money to invest in a bumbling democracy if we start crying loudly.
Europeans look beyond lies and concentrate on figures in the data.
When you see the FDI data chart from 2016 to the present day, you’d find it saddening.
The figures analyze and highlight the various impediments to overall economic growth in Africa in general and Nigeria in particular. To climb out of this depressing cesspool, the government needs to stamp it’s feet down and heal the parlous security situation in the country”.
Brazen kidnappings, ransom collections and executions of innocent victims continued to occur in the country and the security forces seem unable to stop it.
Cade Agbugba continued,
“It is just not good looking to have Fulani bandits and Boko Haram islamists roaming all over, causing mayhem by executing especially Christians on camera and off camera. Many of them collect ransom money in millions, yet their lives see no improvement. They seem bent on causing mayhem and maximum discomfort to Christians in a government seen to be run largely by people determined to be lopsided in thinking and in action.
With the anarchic set up the country has found itself in, it just won’t do seeking for foreign direct investment for now, until Nigeria sorts itself out of its parlous security nightmare. The world is watching”.
The situation has not really changed that much, from the days of Buhari into the present day.
Things really need to change significantly before confidence builds up for Foreign Direct Investments (FDI) to begin it’s arduous steps towards building up.
It was Steve Jobs who said, “simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”
So how do we move mountains to get to our promised land as a nation?
Christopher Hitchens said that “the essence of the independent mind lies not in what it thinks, but in how it thinks”.
The last time that Nigeria had a phenomenal good run on FDI inflows and a stable economy was when Dr. Goodluck Ebele Jonathan came into power.
But when the American state department under Obama saw that the country was doing well, they launched a sleek operation to remove Jonathan from power by all means and at whatever costs. Many people who were in on the state department operation did not know that it was a subset of the geopolitical rivalry between the US and China as the then Nigerian president was doing so much business with China.
Jonathan was removed.
And the results show that in just 9 years since his departure, Nigeria’s GDP has effectively halved according to David Hundeyin “and a whole generation of high-quality human capital has been lost to the US and its allies”.
Greg Abolo
gregabolo@gmail.com
