NBS
Foreign investments drops by 35%-NBS. Foreign investments in the manufacturing sector fell 35% from $392.5 million in the fourth quarter of 2022 to $256 million in the first quarter of 2022, according to the National Bureau of Statistics’ capital importation report for 2023 Q1.
According to the report, total capital inflow into Nigeria in Q1 2023 was $1.1 billion, a 28% decline from the US$1.5 billion recorded in Q1 2022.
Despite the decrease, capital importation into the production sector ranked second with 22 per cent share of total investments, while the banking sector recorded the highest inflow of $304.5m, representing 26.89 per cent of total capital imported in Q1 2023.
The Manufacturers Association of Nigeria has recently cautioned that the increasingly difficult business environment, caused by high energy costs, a lack of access to capital, and numerous taxation, among other factors, has reduced investment in the sector.
According to the Manufacturers Association of Nigeria Bi-Annual Economic Review, investment in the manufacturing sector fell to N145.59bn in the second half of 2022, down from N160.88bn in the same period in 2021, a drop of N15.29bn or 10%.
It fell by N32.8 billion, or 18%, when compared to N178.39 billion in the first half of the year. Manufacturing investment totaled N323.98 billion in 2022, up from N305.02 billion in 2021.
According to MAN, the drop in investment was mostly caused by the government’s debt problems, high borrowing and energy costs, and sluggish consumption.
In a recent interview with The PUNCH, the President of the Manufacturers Association of Nigeria stated that if power distributors implement the anticipated pricing hike, more foreign manufacturing companies may leave the country.
He went on to say that some international industrial enterprises had already left Nigeria as a result of the power issue, as well as the unpredictability of the country’s foreign exchange rate prior to its recent unification.
“Manufacturers provide almost all infrastructure by themselves,” Meshioye stated. Manufacturers supply water, power, security, and other services outside of major roadways. So, when you look at that, you realize how high the cost of doing business is.”