Foreign Direct Investment and Capital Importation will remain low till the third quarter of 2021, the Nigeria Employers’ Consultative Association said on Monday.
According to the statement from NECA’s Director-General, Dr. Timothy Olawale, Nigeria only received $9.68bn from capital inflows in 2020, against $23.99bn received in 2019.
Referring to the data from the National Bureau of Statistics, he said the figure represented 59.6 per cent decline relative to that of 2019 and 42.4 per cent reduction compared to $16.81bn recorded in 2018.
“This low rate of FDI and capital importation is likely to continue till Q3 2021,” he said.
Olawale highlighted some of the factors responsible for the low rate to include poor investment climate characterised by overly stringent government policies, bureaucratic bottlenecks for securing permits, weak legal framework, insecurity, lack of economic diversification, and the nation’s huge infrastructure deficit.
“Additionally, uncertainty around the Coronavirus Disease revolution and the global investment policy environment will continue to affect FDI inflows globally in 2021.
“For developing countries such as Nigeria, prospects for this year are a major concern. Traditionally, capital importation or FDI will flow to areas or countries where there are guarantees of return on investment. Thus, an environment like Nigeria without much guarantees will naturally be a disincentive to investors,” Olawale added.
