Nigeria’s Foreign Direct Investments (FDI) inflows slipped from $470.51 million (N178.6 billion) it was as of June 2019 to $362.84 million (N137.6 billion) in June 2020.
This indicates 29.7 percent decline, the highest Year-on-Year, YoY in the last three years.
The FDI decline poorly affected the nation’s foreign reserves which dropped by 17.2 percent to $36.1 billion (N13.7 trillion) in H1’20 from $43.6 billion (N16.3 trillion) in H1’19.
Economists attributed the development in the FDI in H1’20 to the decline in crude oil earnings and the COVID-19 pandemic.
Financial Vanguard analysis of the data obtained from the National Bureau of Statistics (NBS) revealed that the nation’s economy recorded mixed performance in FDI flows since 2017 after it exited its second recession.
NBS data shows that before the decline in HI’20, FDI had declined marginally by 1.9 percent in H2’19 from $470.51 million (N178.6 billion) in H1’19. In H2’18 the country had recorded a sharp rise in FDI at 37.2 percent to $696.71 million (N264.5 billion) from $507.99 million (N192.7 billion) in H1’18.
The trend in foreign reserves on half yearly basis also shows direct correlation with the FDI trend as it also declined in H2’19 by 11.7 percent from $43.6 billion (N16.34 trillion) in H1’19, while it rose in H1’19 by 37.2 percent to $43.6 billion from N43.1 billion (N16.3 trillion) in H2’18.
Financial experts and analysts have projected that nation may not recover in the third quarter of 2020, due to the decline in foreign reserves, as the FDI’s setback is expected to put further pressure on foreign exchange earnings.