Economy
NIPC Says Investment Announcements in Nigeria Plunge 44%
By Adedapo Adesanya
Nigeria’s economy recorded a sharp drop in foreign investments in 2020 as investors’ commitments declined by 44.1 per cent to $16.7 billion from $29.9 billion in 2019.
This is according to the investment announcements captured by the Nigeria Investment Promotion Council (NIPC).
Analysis of the data released by the NIPC showed that investments declined in the first three quarters of the year.
In the first quarter of the year, $4.8 billion was recorded compared to $12.7 billion in the same period of the preceding year, showing a 62 per cent decline.
Similarly, in the second quarter of the year under review, $250 million was recorded, 89.8 per cent lower than the $2.44 billion achieved in Q2 of 2019.
Also, in the third quarter of last year, there was a decline of 58.1 per cent in the investments to $3.9 billion from $9.3 billion in the same period of 2019.
However, investments in the fourth quarter of 2020 surpassed that of the same time of 2019 as announced investments stood at $7.76 billion in Q4 2020 versus $5.47 billion in Q4 2019.
According to NIPC, the $16.74 billion investments announced last year were committed to a total of 63 projects across 21 states of the federation, the FCT, and the Niger Delta region.
The manufacturing sector got the lion share of the investments as it received $8.4 billion, representing 50 per cent of the total investments announced last year.
The transportation sector got $4.61 billion, which is 28 per cent of the total investments announced. The Information and Communication Technology (ICT) sector was the third favourite sector for investors $1.81 billion, representing 11 per cent of the total sum, was committed to projects in the sector.
Mining and quarrying sector attracted $1.07 billion in investments in the period under review, thus accounted for six per cent of the total investments.
Other sectors of the economy such as Agriculture, Finance and Insurance, Health and Social Services shared the remaining $0.88 billion, which is five per cent of the investments. In terms of destinations, $6 billion, representing 36 per cent of the total investments went into projects in Rivers State.
In terms of state, Kaduna State got 2.81 billion, representing 17 per cent of the total investments. Projects in Kogi and Lagos states attracted $1 billion and $0.89 billion respectively, which is six per cent and five per cent of the total investments.
Other states of the federation attracted $6.05 billion, representing 36 per cent of the investments.
In terms of countries of destination, the NIPC report explained that $6 billion, representing 36 per cent of the total investments came from Singapore, while $3.71 billion, representing 22 per cent of the investments came from Chinese investors.
The report indicated that $2.44 billion, representing 15 per cent, was from the United States of America, while $1.6 billion, representing 10 per cent of the total announced investments came from South Africa.
A total of $2.99 billion (18 per cent) came from other sources including Nigerian investors.
The NIPC also said top 10 investing organisations in the Nigerian economy last year include, Indorama Petrochemicals and Fertilizer from Singapore; Bank of China and Sinosure; 328 Support Services GmbH from the USA; MTN South Africa; Sinoma CBMI from China; Torridon Investments from the UK; African Industries Group from Nigeria; Savannah Petroleum from the UK; Stripe from the USA; and NESBITT Investment Nigeria Limited.
Looking ahead, global Foreign Direct Investments (FDIs) has been projected to drop by 50 per cent this year, being the worst in the last 20 years.
The Executive Secretary of the NIPC, Ms Yewande Sadiku, explained that global FDI is expected to plummet from $1.54 trillion recorded in 2019 to $924 billion in 2020 and further slump to $831.6 billion in 2021.
She said the downturn in the global FDI flow, occasioned by COVID-19, was not expected to record recovery earlier than 2022.
The NIPC boss advised that Nigeria would need to formulate and implement bold and coherent policy changes and deep economic reforms to reverse the expected declines in FDI between 2020 and 2022.
She said, “Investment interest in Nigeria was under pressure before COVID-19; coherent investment-supporting policies are urgently required to reverse the trend.”
“A more proactive all-of-government approach to investor support, across federal and state governments, is required to convert more announcements to actual investments,” she added.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
