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28 States Failed To Attract Foreign Investment In Q1 – NBS Report
According to recently released data on Foreign Direct Investment by the National Bureau of Statistics, 28 out of the 36 states in Nigeria, along with the Federal Capital Territory, experienced a lack of capital importation during the first quarter of 2023.
In contrast, only nine states managed to attract capital inflows during this period.
Lagos emerged as the most successful state in attracting investments, with a total of $704 million, Abuja received $410.27 million, and Akwa Ibom attracted $5.21 million.
Among the other states that witnessed capital inflows were Adamawa with $4.50 million, Anambra with $4 million, Ogun with $2.09 million, Niger with $1.50 million, Ondo with $0.20 million, and Ekiti with $0.01 million.
Overall, the cumulative capital inflows for the period reached $1.13 billion.
The report read, “By destination of investment, Lagos State remained the top destination in Q1, 2023 with $704.87m, accounting for 62.23 per cent of total capital investment in Nigeria. This was followed by Abuja, valued at $410.27m (36.22 per cent).”
According to the National Bureau of Statistics (NBS), there has been a significant 28 percent decline in total capital importation when comparing the first quarter of 2023 to the same period in 2022.
The report read, “Total capital importation into Nigeria in Q1, 2023 stood at $1.13bn, lower than $1.57bn recorded in Q1 2022, indicating a decrease of 28 per cent. When compared to the preceding quarter, capital importation rose by 6.78 per cent from $1.06bn in Q4 2022.”
It was also disclosed that the largest capital importation during the period was received from portfolio investment, which accounted for 57.32 per cent ($649.28m) of total capital imported in Q1 2023.
This was followed by other investment with 38.31 per cent ($435.76m) and Foreign Direct Investment with 4.20 per cent ($47.60m).
When examining the sectors, the banking sector attracted the highest inflow of capital, with $304.56 million, representing 26.89 percent of the total capital imported during Q1 2023.
The production sector followed closely with $256.12 million (22.61 percent), and IT services received $216.06 million (19.08 percent) in capital importation.
Additionally, it was revealed that the United Kingdom emerged as the largest source of capital importation during the first quarter of 2023.
The report added, “Capital importation by country of origin reveals that capital from the United Kingdom ranked top in Q1, 2023 with $673.64m, accounting for 59.47 per cent. This was followed by the United Arab Emirates and the United States valued at $108.28m (9.56 per cent) and $95.36m (8.42 per cent) respectively.”
It was also noted that “Categorisation of Capital importation by banks shows that Citibank Nigeria Limited ranked top in Q1, 2023 with $424.13m (37.45 per cent). This was followed by Standard Chartered Bank Nigeria Limited with $360.33m (31.81 per cent) and Stanbic IBTC Bank with $151.85 (13.41 per cent).”
Tosin Oshunkoya, the Co-Managing Partner and Chief Executive Officer of Comercio Partners Asset Management, has expressed concerns about the declining interest of foreign investors in the Nigerian economy.
Oshunkoya pointed out that the persistent rise in inflation rates in major developed economies has led to cautious policy measures such as interest rate hikes.
He said, “The ravaging trend of inflation across major developed economies has triggered hawkish policy responses such as interest rate hikes, which tend to spur capital repatriation from frontier economies such as Nigeria while discouraging foreign capital inflows into the local economy, particularly through foreign portfolio investments.’
Savannah Energy has shared a trading update on its Nigerian operations and other markets in Africa, including up-to-date cash collections in its Nigerian business.
According to the update, made available on Thursday in Lagos, its gross production in Nigeria averaged 23.1 Kboepd for FY 2024, broadly in line with the prior year’s 23.6 Kboepd, of which 88% was gas (FY 2023: 91%).
On the update, CEO of Savannah Energy, Andrew Knott, said, “I am pleased to provide a FY trading update which demonstrates the continued progress we have made in 2024, a year which saw the highest level of cash collections ever recorded by our Nigerian business. 2025 is expected to be an exciting year for our Company: we have a large planned operational programme in Nigeria which is anticipated to enhance both our oil and gas production levels and capacity; we intend to progress our R3 East oil development project in Niger; we continue to pursue key acquisitions in the upstream oil and gas space; and we continue to seek to build our power business.
“Fundamentally, Savannah remains unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND power sectors.”
The update It also shows that it generated a Total Income of US$393.6 million in 2024, compared to FY 2023’s US$289.8 million. This consists of Total Revenues of US$258.7 million and Other operating income of US$134.9 million.
The report also shows that Savannah’s FY 2024 Total Revenues were ahead of the previously issued financial guidance of greater than US$245 million, while FY 2024 financial guidance is reiterated for Operating expenses plus administrative expenses at ‘up to US$75 million’. The company expects its FY 2024 capital expenditure to come in lower than planned (previously guided at ‘up to US$50 million’) due to the phasing of spend.
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According to the update, Savannah’s cash collections in 2024 amounted to US$248.5 million, a slight increase from the US$206 million it received in 2023. The report further shows that its cash balances as at 31 December 2024 stood at US$32.6 million, compared to the 31 December 2023 figure of US$107.0 million.
The report shows that the company’s midstream subsidiary, Accugas Limited, had as at 31 December 2024 drawn down on its NGN332 billion of the NGN Transitional Facility, with the resulting funds being converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility, leaving a balance as at 31 December 2024 of approximately US$212.3 million.
The report also provided new updates on Accugas’ US$45 million Uquo Central Processing Facility (“Uquo CPF”) compression project in Nigeria, noting that its commissioning which will enable the expansion of gas production in the medium term is well underway.
The report highlighted the progress being made in the procurement process of long lead equipment in Nigeria for a potential two-well drilling campaign on the Uquo Field in H2 2025, with an additional gas development well expected to add up to 80 MMscfpd of supplemental production capacity and a potential exploration well targeting an Unrisked Gross gas initially in place (“GIIP”) of 154 Bscf (25.7 MMboe) of incremental gas resources.
The update shows that progress is also being made in the planned Savannah acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, whose principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field (“Stubb Creek”), with regulatory approval and completion being targeted in Q1 2025. Following the completion of the acquisition, Savannah intends to commence an expansion programme which is anticipated to increase Stubb Creek gross production from an average of 2.7 Kbopd in 2024 to approximately 4.7 Kbopd.
In Niger, Savannah continues to seek to progress its 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, while it continues to push for a potential alternative transaction structure to acquire a material stake in producing oil and gas assets in South Sudan as previously announced on 20 December 2024.
On the renewable energy front, the update shows that Savannah has up to 696 MW of renewable energy projects currently in motion, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon. A firm believer in Africa’s transition to renewable energy, Savannah continues to target a portfolio of up to 2 GW+ of power projects in motion by the end of 2026.
The Nigerian Economic Summit Group (NESG) has projected that the country has the potential to achieve a 5.5% growth in Gross Domestic Product (GDP) if critical policy reforms are sustained.
This was disclosed on Thursday during the launch of the NESG’s 2025 Macroeconomic Outlook report.
Speaking at the event, the Chief Economist and Director of Research & Development at NESG, Dr. Olusegun Omisakin, highlighted the need for more efficient policy implementation to unlock Nigeria’s economic potential.
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“We believe at the optimal level, if we embark on more efficient policy reforms, the Nigerian economy has the potential, the GDP to end up at 5.5 per cent, and we believe that this is achievable,” Omisakin stated.
More to follow……….
The Central Bank of Nigeria (CBN) has announced the release of the Nigerian Foreign Exchange (FX) Code, a set of guidelines designed to promote ethical conduct among authorized dealers in the country’s FX market.
In a statement, the apex bank disclosed that the official launch of the Code would take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
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“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote the ethical conduct of authorised dealers in the Nigerian Foreign Exchange Market,” the statement read.
The introduction of the FX Code is expected to enhance transparency, accountability, and professionalism within Nigeria’s foreign exchange ecosystem, aligning it with global best practices.
The event is anticipated to attract key stakeholders in the financial and banking sectors, as well as representatives from authorized FX-dealing institutions across the country.
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