HomeBUSINESSForeign Industrial Investments Up 88% To $861 Million

Foreign Industrial Investments Up 88% To $861 Million

In a remarkable rise of economic growth, Nigeria’s manufacturing sector has witnessed an astounding 88.17% increase in foreign industrial investments, in the first quarter of 2023, increasing to $861.16 million.

This monumental leap from 2022, when it stood at $457.66 million, has set a new precedent for the nation’s industrial prowess.

The data, meticulously detailed by the National Bureau of Statistics, paints a vivid picture of progress. Notably, the Manufacturers Association of Nigeria (MAN) has also reported an 8.1% boost in local manufacturers’ investments, totaling N192.89 billion in H1’23.

However, this rise is somewhat attributed to the depreciation of the naira in the second quarter of 2023.

Investment inflow into Nigeria has taken a remarkable turn, with the Production/Manufacturing sector leading the way, accounting for nearly 40% of the $2.163 billion total capital importation in H1’23. The banking sector and IT services closely follow, reaping the benefits of these economic winds of change.

This financial transformation is a complete contrast to the previous year, where the manufacturing sector played second fiddle to the banking sector. Now, the manufacturing sector is in the limelight, signifying a shift in the country’s investment landscape.

However, it’s essential to note that the growth isn’t solely indicative of physical investments but is largely influenced by currency devaluation, making investments in plants and machinery more expensive. Despite this, the numbers show an impressive upward trajectory.

Furthermore, experts believe that the inflow of capital may be slightly misleading, with much of it driven by trade finance facilities such as loans and bonds utilized by large multinational companies. These entities are fueling their operations in Nigeria, adding a unique dimension to the investment landscape.

Capital importation into Nigeria encompasses various forms, including Foreign Direct Investment (FDI), Portfolio Investment (PI), and Other Investments. The data reveals that ‘Other Investment’ topped the charts, accounting for nearly 59% of total capital importation, followed by Portfolio Investment and Foreign Direct Investment.

Diving deeper, the ‘Other Investment’ category shows that loans, a significant subcategory, played a pivotal role, representing over 55% of the total capital importation in H1’23.

Nigeria’s economy is in the midst of a fascinating transformation, with the manufacturing sector at the forefront of attracting foreign investments, promising a brighter economic horizon for the nation.

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