Nigeria’s Banking Sector Leads Foreign Direct Investment; Attracts Over $15 Billion in 5 Years

In the last five years, the banking sector has attracted $15.8 billion in Foreign Direct Investment (FDI). This figure reflects 23 percent of the total capital importation into the country in the period. 

According to data from the National Bureau of Statistics (NBS), Nigeria attracted $69.39 billion in both foreign portfolio and foreign direct investments (FDIs) within five years.

Aside from the shares portfolio, the Nigeria banking sector was the most favoured by foreign investors with almost one-fourth of the country’s foreign capital inflow.

From January 2017 to December 2021, about $26.21 billion was invested in Nigeria through shares portfolios. Between 2017 and 2018, the banking sector’s share of the total capital importation accounts for 61.5 percent.

It however dropped downward to 22 percent in 2019, to 19 percent in 2020 and 16 percent in 2021. 

Nonetheless, the Nigerian banking sector shares still enjoy considerable attention from foreign investors. 

From an estimated $3.11 billion in foreign capital inflows recorded in the first half (H1) of the year,  the banking sector accounted for N1.47 billion or 47 percent, while only N301 million, representing 10 percent was invested in equities. 

In the second quarter (Q2), production and telecommunications also competed strongly with 15.24 and 10 percent respective shares of the capital importation value. General financing was 12.85 percent, while trading attracted 3.68 percent, and agriculture had a meagre 3.74 percent.

According to NBS, “The total value of capital importation into Nigeria stood at $1.535 billion from $875.62 million in the corresponding quarter of 2021, showing an increase of 75.34 per cent. When compared to the preceding quarter, capital importation decreased by 2.4 per cent from $1.573 billion.

“The largest amount of capital importation was received through portfolio investment, which accounted for 49.33 per cent ($757.32 million)”.