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 Senate has directed the Nigeria Customs Service (NCS) to raise its revenue target for 2025 from N6 trillion to N10 trillion.
The upper chamber of the National Assembly on Monday cited the urgent need for enhanced enforcement and surveillance amid rising smuggling and insecurity challenges across the country as rationale for the upward review.
The Chairman of the Senate Committee on Customs, Mr Isah Jibrin, stated this when the NCS’ Deputy Comptroller General Jibo Bello appeared before the committee for its budget defence.
The tariff policy of the government became the crux of the matter as the committee identified gaps, frowning upon the lack of enforcement of a 4 per cent freight on board (FOB) by the agency.
Mr Bello disclosed that customs had been authorised by the Ministry of Finance to halt collection of the 4 per cent freight on board.
Based on this, the chairman of the committee mandated the Minister of Finance, Mr Wale Edun, to appear before it to explain the suspension of the 4 per cent freight on board charges, which they say was an infraction of the law.
The Senate is expected to question the finance minister and key stakeholders at the scheduled appearance on Thursday, as it seeks to ensure accountability, revenue optimisation, and national security enforcement in line with existing legislative frameworks.
Earlier this year, the Customs announced the suspension of the 4 per cent charge and noted that the pause period will enable comprehensive engagement and consultations between the Minister of Finance, Mr Wale Edun and other stakeholders.
The FOB, put at 4 per cent charge on imported goods, was meant to replace an older system where companies like Webb Fontaine handled import inspections for a 1 per cent fee. The move sparked heavy criticism from stakeholders like the Nigeria Employers’ Consultative Association (NECA).
“The suspension period will allow the Service to further engage with stakeholders while ensuring proper alignment with the Act’s provisions for sustainable funding of these modernisation initiatives.” NCS said in February.
NCS also cancelled declarations made during the short-lived implementation.
By Dipo Olowookere
Investors demonstrated strong appetite for the new seven-year FGN sovereign bond auctioned at the primary market by the Debt Management Office (DMO) on Monday.
Business Post reports that the debt office, on behalf of the federal government, was at the market yesterday to seek N100 billion from bond investors.
The agency asked investors for the funds in two different bonds, a re-opening five-year paper and a new seven-year note at N50 billion each.
However, the DMO ended up allotting about N98.95 billion of the longer tenor to subscribers and N1.05 billion for the shorter note.
Details of the exercise showed that the seven-year paper was sold to investors at a coupon rate of 17.95 per cent, with bids worth N561.17 billion, showing a siginificant oversubscription, indication the strong confidence investors have in the ability of the government to service the debt.
It was observed that the debt office received a total of 209 bids, but only 41 bids were successful, according to results of the auction released by the DMO.
As for the five-year paper, which has an actual 3 years and 10 months to maturity, it got 30 bids from subscribers, with only two cleared by the DMO.
The value of its subscription was N41.69 billion sold at a coupon rate of 17.75 per cent. This paper was first sold by the Nigerian government about two years ago at 19.30 per cent.
According to the note released by the debt office, the settlement date for this latest bond issuance is Wednesday, June 25, 2025.
It was offered to investors at a unit price of N1,000 subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.
FGN bonds are tax-free as they qualify as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds, among others.
After the sale, the bonds will be listed on the Nigerian Exchange (NGX) Limited and the FMDQ Securities Exchange for trading at the secondary market.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.64 per cent on Monday, June 23, on the back of renewed investor confidence.
During the session, the NASD Unlisted Security Index (NSI) increased by 21.19 points to settle at 3,342.19 points, in contrast to last Friday’s 3,320.91 points.
In the same vein, the market capitalisation went up by N12.45 billion to close at N1.957 trillion compared with the N1.944 trillion it ended last Friday.
Yesterday, Newrest Asl Plc chalked up by N3.79 to end at N41.76 per unit compared with the preceding session’s N37.97 per unit, Okitipupa Plc gained N2.87 to trade at N221.87 per share versus N219.00 per share, and Central Securities Clearing System (CSCS) Plc appreciated by N2.50 to N31.50 per unit from N29.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc lost N1.38 to finish at N68.00 per share compared with last Friday’s price of N69.38 per unit, and UBN Property Plc improved by 21 Kobo to trade at N2.03 per unit, in contrast to the preceding session’s N2.24 per unit.
In the opening session of the week, there was a 111.4 per cent rise in the volume of securities to 471,471 units from the 223,039 units recorded in the previous trading day.
However, the value of transactions dropped by 30.2 per cent to N10.6 million from N15.2 million, while the number of deals jumped by 100 per cent to 42 deals from 21 deals.
When the market closed for the day, Impresit Bakolori Plc remained the most active stock by volume (year-to-date) with 536.9 million units valued at N524.7 million, trailed by Air Liquide Plc with 507.2 million units sold for N4.2 billion, and Geo-Fluids Plc with 268.5 million units worth N475.8 million.
Also, Okitipupa Plc remained the most traded equity by value (year-to0-date) with 153.7 million units valued at N4.9 billion, followed by Air Liquide Plc with 507.2 million units worth N4.2 billion, and FrieslandCampina Wamco Nigeria Plc traded 40.5 million units for N1.7 billion.
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