Report Shows Drop In Foreign Investments For Nigeria’s Manufacturing Sector

Foreign investments into Nigeria’s manufacturing industry saw a significant decrease of 35% from $392.5 million in the last quarter of 2022 to $256 million in the initial quarter of 2022, as per the 2023 Q1 capital importation report by the National Bureau of Statistics.

The report also highlighted a general decline in capital importation into Nigeria in Q1 2023, standing at $1.1 billion, a decrease of 28% from the $1.5 billion recorded in Q1 2022.

Despite this downturn, the production sector still managed to secure the second-highest share of total investments at 22%.

The banking sector topped the list, with an inflow of $304.5 million, accounting for nearly 27% of total capital imported in Q1 2023.

Previously, the Manufacturers Association of Nigeria had raised concerns about the declining investments in the sector due to a challenging business environment, characterized by high energy costs, limited access to funding, and multiple taxation.

The Association’s bi-annual economic review revealed a dip in manufacturing sector investment to N145.59 billion in the second half of 2022, a decrease of 10% compared to N160.88 billion in the same period of 2021.

In comparison with the first half of the year’s N178.39 billion, the drop was even steeper at 18%, or N32.8 billion.

Total investment in manufacturing for 2022 stood at N323.98 billion, slightly higher than 2021’s N305.02 billion.

The President of the Manufacturers Association of Nigeria cautioned in a recent interview with Punch that further tariff hikes could trigger more international manufacturing companies to leave Nigeria.

The exodus is already underway, with several firms having left due to the power crisis and instability of the country’s foreign exchange rate.

Meshioye said, “Manufacturers provide almost every infrastructure by themselves. Outside the major roads, you find out that manufacturers provide water, power, security, etc. So, when you look at it, you find out that the cost of doing business is so huge.”