The Nigerian economy recorded a total decline of $2.1bn in investment inflow in the first 12 months of the administration of President Muhammadu Buhari.
The $2.1bn, when converted based on the N305.5 per dollar official exchange rate of the Central Bank of Nigeria, translates to about N642bn.
Investigations by our correspondent showed that since July 2015, the country had been experiencing persistent decline in the value of direct and portfolio investments.
However, owing to the harsh operating environment coupled with exchange rate uncertainties, the inflow had declined by $2.1bn to $647.1m at the end of June this year.
The report stated that all the three major components of investment such as Foreign Direct Investment, portfolio investment and other investments recorded huge declines in the one-year period.
In terms of FDI inflow, an analysis of the report showed that the economy attracted the sum of $717.72m as of the third quarter of 2015.
The inflow, according to the report, dropped to $133.02m at the end of the second quarter of this year.
For portfolio investment, which is made up of equity, bonds and money market instruments, the report stated that the sum of $1.09bn was invested in the third quarter of last year.
The $1.09bn investment, it added, dropped by $673.68m to $245.32m at the end of June this year.
For other investments made up of trade credits, loans, currency deposits and other claims, the report stated that the sum of $1.02bn was invested in the economy as of the third quarter of last year as against $268.77m in June this year.
The NBS attributed the decline in investment to the harsh economic climate, stating that the investment attracted within the first six months of this year was the lowest in Nigeria’s history.
It said, “The continuing decline in the value of capital imported into the economy is symptomatic of the difficult period that the Nigerian economy is going through.
“The second quarter saw the economy enter into the first recession during the rebased period, according to the technical definition of two consecutive periods of decline.
“This may suggest less profitable opportunities for investment. In addition, in the second quarter, there was considerable uncertainty surrounding future exchange rate policy, which may have deterred investors.”
Commenting on the drop in investment inflows into the country, financial analysts said the current fiscal and monetary policies of the government were not friendly to investors.
The President, Abuja Chamber of Commerce and Industry, Mr. Tony Ejinkeonye, told our correspondent that a lot of investors were unwilling to bring in their funds due to the tough economic environment in the country.
He said the tough operating environment had led to the closure of so many companies in Nigeria, adding that there was a need for the government to address the structural challenges, which had made the operating environment hostile.
He listed some of the areas that were scaring away investors to include uncertainty in the foreign exchange market, hostile business climate, infrastructure deficit and the absence of adequate incentives to attract investors into key sectors of the economy.
Ejinkeonye told our correspondent that what the country needed currently was for the government to implement a well-articulated industrial plan.
This, according to him, is needed in order to begin a new era for industrial development in Nigeria.
He said, “The Abuja Chamber of Commerce and Industry has made it known to the government that the issue of power and energy must be urgently addressed in order to promote industry, boost productivity, and attract both foreign and local direct investments.
“Power and energy sufficiency is the fulcrum of any meaningful development of the economy. This is the time for us as a nation to start implementing consistent policies geared towards attracting investments that will revitalise our industries.”
The Registrar, Chartered Institute of Finance and Control of Nigeria, Mr. Godwin Eohoi, advised the government to look inwards by encouraging the patronage of locally-produced goods to boost investment activities.
He said, “We have to look inwards to reflate the economy by ensuring the encouragement of local content through patronage of locally-made goods. This will help stimulate production by local industries and thus boost investment.
“The government should come up with policies that will encourage investors to set up plants in Nigeria for production rather than spending money importing all these items that are depleting our foreign exchange reserves.
“The government should also reduce the interest rate to make funds available for investment in critical sectors of the economy such as agriculture, manufacturing and others.”
Eohoi added that since foreign investors were shying away from investing in the country, Nigeria should look inwards and encourage local industries by reducing interest rate and making foreign exchange available to them to continue production.
China’s State-Owned Lenders Allocate $8 Billion to Revitalize Property Market
China’s state-owned lenders have committed a substantial $8 billion in loans to rejuvenate the country’s beleaguered property market, aligning with Beijing’s directives to bolster the sector.
Agricultural Bank of China Ltd. disclosed approving over 40 billion yuan of loans for real estate projects on predefined white lists, signaling a proactive approach towards supporting the housing market’s recovery.
China Construction Bank Corp. also joined the effort, extending 3 billion yuan to five property projects, with plans to greenlight over 20 billion yuan in loans soon.
Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. are among the institutions offering financing assistance, although the exact loan amounts remain undisclosed.
This initiative follows Beijing’s recent call for local authorities to enhance financing support for developers and curate lists of eligible projects.
In response, the big four state lenders pledged to meet reasonable financing demands from developers and projects identified under the coordination mechanism.
However, China’s property market faces challenges despite these measures. New home sales plummeted 34.2% year-on-year, underscoring the ongoing slowdown.
While existing home transactions surged during the Spring Festival holiday, new home sales remained subdued, prompting a cautious outlook among buyers.
The infusion of $8 billion aims to instill confidence and stimulate activity in the property sector, potentially heralding a gradual recovery amid persisting market uncertainties.
BUA Foods Invests $200m in Lafiagi Sugar Estate Expansion
Nigeria’s One-Year Treasury Bill Oversubscribed by 300%
Nigeria’s one-year treasury bill was oversubscribed by 300% during the recent Primary Market Auction conducted by the Central Bank of Nigeria (CBN) on Wednesday.
The auction, aimed at rolling over maturing Nigerian Treasury Bills worth N1 trillion, saw unprecedented demand for the one-year T-bill.
Investors offered a total of N1.87 trillion for the N600 billion on offer, indicating a significant appetite for government securities. Out of the total subscriptions, N908.75 billion was allotted, with stop rates set at 19%.
The auction covered maturities across three different tenors: 91-day, 182-day, and 364-day bills, with varying amounts on offer.
While the 91-day bill received N39.90 billion in offers, all were sold, and the 182-day bill garnered N76.83 billion subscriptions, out of which N51.35 billion was allotted.
Managing Director of Arthur Steven Asset Management, Tunde Amolegbe, attributed the remarkable performance of the one-year bills to investor confidence in the current government and its reform initiatives.
He highlighted investors’ preference for higher rates due to signals from the CBN indicating tightening monetary policies amid accelerating inflation.
Experts view the oversubscription as a testament to investors’ trust in the government’s reforms and management of the country’s debt obligations.
The auction reflects a move by the CBN to address liquidity in the financial system while managing Nigeria’s debt obligations effectively.
The significant oversubscription signals robust investor confidence and highlights the attractiveness of Nigerian government securities despite prevailing economic challenges.
Billionaire Watch4 weeks ago
MacKenzie Scott Sells Off $10.4 Billion Worth of Amazon Shares
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 1st, 2024
Company News4 weeks ago
UAC Posts N12.7 Billion Profit Before Tax in 2023
Forex3 weeks ago
Dollar to Naira Black Market Exchange Rate February 2nd, 2024
Education4 weeks ago
WAEC: Over 8,000 Candidates Register for First Series of Computer Based-WASSCE in Nigeria
Banking Sector3 weeks ago
CBN Accuses Banks of Hoarding $5 Billion in Foreign Currencies
Forex4 weeks ago
Dollar to Naira Black Market Exchange Rate January 30th, 2024
Forex2 weeks ago
CBN Mandates Nigerian Banks to Pay International Transfers in Naira