Foreign direct investment (FDI) inflows to Nigeria declined by 21.21 percent in 2020.
According to the global investment trends monitor report released by the United Nations Conference on Trade and Development (UNCTAD), FDI inflows dropped from $3.3 billion in 2019 to $2.6 billion in 2020.
UNCTAD attributed the decline of FDI in Nigeria to low crude oil prices and movement restrictions imposed to curb the spread of the coronavirus.
According to the report, FDI flows to Africa fell by 18 percent to $38 billion from $46 billion in 2019, while FDI inflows in Sub-Saharan Africa also declined by 11 percent to $28 billion.
“Greenfield project announcements, an indication of future FDI trends, fell by 63 percent to $28 billion from $77 billion in 2019,” the report read.
“The pandemic’s negative impact on FDI was amplified by low prices of and low demand for commodities.
“Inflows to Nigeria decline to $2.6 billion from $3.3 billion in 2019. Lower crude oil prices, coupled with the closure of oil development sites at the start of the pandemic due to movement restrictions, weighed heavily on FDI in Nigeria.”
The report indicated that Egypt, Nigeria, South Africa, Ethiopia and Mozambique were the largest recipients of FDI in Africa in 2020.
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Egypt remained the top recipient of FDI in Africa, despite a significant decline in inflows (-39 percent) to about $5.5 billion.
FDI to South Africa almost halved to $2.5 billion from $4.6 billion in 2019; inflows in Ethiopia declined by 17 percent to $2.1 billion; while FDI inflows to Mozambique decreased by 6 percent to $2 billion.
Meanwhile, Senegal was among the few economies in Africa that gained higher inflows in 2020 with a 39 percent increase to $1.5 billion, which was supported by rising investments in energy.