Nigeria Now West Africa’s Largest Recipient Of Foreign Direct Investment

The United Nations Conference on Trade and Development (UNCTAD), said on Friday, Nigeria emerged West Africa’s largest recipient of Foreign Direct Investment (FDI), with its flows doubling to $4.8 billion, mainly due to a resurgence in investments in the oil and gas sectors.

With other international project finance deals in the country, it jumped to $7 billion, a report by the organisation said, including the $2.9 billion Escravos Seaport project to construct an industrial complex.

Although the report which covered business activities in 2021 said that there had been a jump in investments, however Nigeria has been starved of funding for its oil and gas sector in recent times, a development that is partly responsible for its inability to meet its production quota and largely due to meeting the international community net-zero target.

“Nigeria, West Africa’s largest recipient of FDI, saw its flows double to $4.8 billion, mainly because of a resurgence in investments in the oil and gas sectors.

” International project finance deals in the country jumped to $7 billion. These included the $2.9 billion Escravos Seaport project to construct an industrial complex,” it said.

But despite the overall positive FDI trend on the continent, total greenfield announcements into Africa remained low at $39 billion, showing only a modest recovery from the $32 billion recorded in 2020 – and way below the $77 billion registered in 2019, UNCTAD said.

It added that the number of international projects in renewables in Africa climbed to 71 – nearly double the 36 recorded in 2011.

These include a $20 billion project to provide solar and wind energy from Morocco to the United Kingdom via 3,800 km of sub-sea cables.

“For long-term prospects, the African continent has great potential to attract international investment in the green and blue economies, as well as infrastructure,” James Zhan, Director of UNCTAD’s investment and enterprise division said.

“A challenge is to further improve the investment climate and strengthen Africa’s capacity to absorb such sustainable investment,” he added.

The continent saw foreign direct investment rebound strongly after the fall in 2020 caused by the COVID-19 pandemic, according to UNCTAD.

In all, African countries hit a record $83 billion in 2021, according to UNCTAD’s World Investment Report 2022, more than double the amount reported in 2020, when the COVID-19 pandemic weighed heavily on investment flows to the continent.