Nigeria gets N2tn in African investments

Over the last three years, African countries have invested $4.23bn (N1.95tn) into Nigerian firms and businesses, according to data from the National Bureau of Statistics. This accounts for 19.52% of the $21.69bn invested into Nigeria from various countries during the period under review. South Africa is the largest African investor in Nigeria, investing $2.34bn (N1.09tn). Other countries that have invested include Mauritius, Botswana, Congo, Cote d’Ivoire, Egypt, Guinea, Ghana, Kenya, Morocco, Niger, Sierra Leone, Seychelles, Somalia, Sudan, Togo, Uganda, and Zambia.

Many South African businesses, such as telecommunications, engineering, banking, and retail, have found a home in Nigeria. MTN Nigeria, a subsidiary of MTN Group, is one of the most successful business imports from South Africa. Standard Bank, known as Stanbic Bank, is another well-known success story. Shoprite and PEP stores, which dominated the retail sector, have since exited the Nigerian market. Multichoice, owners of DSTV and GOTV, are also examples of South African firms operating in Nigeria.

The second-largest African investor in Nigeria is Mauritius, which invested $1.27bn. In 2022, Mauritius Commercial Bank disclosed plans to open an office in Nigeria, with close to $850m invested in the Nigerian oil and gas sector. However, foreign direct investment in Nigeria has been falling due to limited forex availability, security concerns, and other structural challenges. South African investments fell by 59.33% year-on-year from $1.05bn in 2021 to $428.73m in 2022. Investments from Mauritius also fell by 69.79% y-o-y from $690.91m in 2021 to $208.66m in 2022.

The African Continental Free Trade Area is expected to improve intra-African investments, with Nigeria benefiting more. However, high inflation in the country is affecting the operations of many foreign businesses, with sales falling due to reducing purchasing power. Many foreign businesses are exiting the country due to this issue. The World Bank has expressed concern over Nigeria’s economic situation, stating that “FDI and FPI flow into Nigeria do not compare favourably with similar economies of the world, reflecting difficulties with FX availability, security concerns, and other structural challenges in recent years.”