The United Nations Conference on Trade and Development (UNCTAD) has said Nigeria’s Foreign Direct Investment (FDI) inflows grew by $100 million to $2.4 billion in 2020.
UNCTAD disclosed in its World Investment Report 2021.
Nigeria’s FDI expanded from $2.3 billion in 2019 to $2.4 billion despite COVID-19 that disrupted business activities in Africa’s largest population.
According to the UNCTAD, Egypt received the largest FDI at $5.9 billion in 2020. Followed by the Republic of Congo’s $4 billion while Nigeria and Ethiopia came third with $2.4 billion apiece.
South Africa emerged fourth with$3.1 billion following a 39 percent decline.
The report noted that the 33 percent plunge in crude oil price in 2020 due to COVID-19 hurt Nigeria’s attractiveness.
The report reads: “The average price of crude oil dropped by 33 per cent in 2020, and lower demand along with supply-side constraints caused by the slowdown in site development restricted FDI to the country in the first half of 2020.
“Despite the pandemic, the long-term policy of FDI diversification appears to have had some impact.
“One important greenfield investment ($66 million) in the non-oil economy was the construction of a manufacturing facility in the Lekki Free Trade Zone by Ariel Foods (Kenya).
“There was also a significant merger and acquisition (M&A) deal in the same region, with China Communications Construction Company providing the initial $221 million equity injection in Lekki Deep Sea Port, out of a planned total investment of $629 million.
“Other transactions that contributed to FDI diversification, such as the investment by Multichoice Group (South Africa) in Betking, a provider of data hosting services, were relatively small.”
UNCTAD listed MTN Nigeria’s $1.6 billion investment in 4G network services as a major driver of FDI in Nigeria in 2020.