Despite Zero Foreign Direct Investment, 14 States Splurge N21 Billion on Overseas Trips. Between 2021 and the third quarter of 2023, 14 Nigerian states—Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Edo, Gombe, Imo, Jigawa, Nasarawa, Taraba, Yobe, and Zamfara—have collectively spent at least N21.04 billion on foreign trips without managing to attract any foreign investments. Despite their efforts, none of the $14.85 billion that foreign investors directed into Nigeria found its way to these states.

    Foreign Direct Investment

    The lack of foreign investments is reflective of broader challenges, including insecurity and other issues affecting the country’s overall investment climate. The figures for foreign trips were sourced from state budget performance reports, with some states only providing partial data for specific quarters. Notably, Kebbi, while also not receiving foreign direct investments during this period, was excluded due to the absence of available data on its spending related to foreign trips.

    The World Bank has observed that net Foreign Direct Investment (FDI) inflows into Nigeria are negative, indicating equity withdrawals by foreign investors. Nigeria’s FDI and Foreign Portfolio Investment (FPI) flows are not competitive with similar economies globally, pointing to challenges such as foreign exchange availability, security concerns, and other structural issues in recent years. Several states, including Zamfara, Jigawa, and Nasarawa, featured in the report, grappling with issues like banditry, particularly in Zamfara, where 14 local government areas have been affected.

    Capital import

    Banditry has led to significant challenges, such as the abandonment of over 70% of farmlands due to security fears. In 2022, the Managing Director of Zamfara State Investment Corporation, Dr. Anas Hamisu Lawal, highlighted that insecurity was a major impediment to attracting investments into the state, with potential investors consistently expressing concerns about the security situation.

    In response to the challenges posed by insecurity, the Managing Director of Zamfara State Investment Corporation, Dr. Anas Hamisu Lawal, noted that potential investors are keen to invest once the security situation improves, emphasizing the critical importance of security in attracting investments. Similarly, Benue State Commissioner for Finance, David Olofu, highlighted that insecurity has hindered states from attracting investors, questioning the feasibility of attracting investments when citizens’ safety is compromised.

    In 2022, Edo State Governor Godwin Obaseki outlined plans to prioritize sectors like technology, agriculture, and entertainment to attract more investors, though the state has yet to record foreign investments in the past three years. Deputy Governor Lawrence Ewhrudjakpo of Bayelsa State, in 2021, acknowledged Governor Douye Diri’s efforts to leverage foreign trips to attract investors and stimulate the state’s economy.

    Foreign Direct Investments

    The absence of foreign investments in these states is attributed to a lack of potential investors and the prevailing insecurity in the country, according to Professor Akpan Ekpo, a specialist in Economics and Public Policy at the University of Uyo. Professor Jonathan Aremu, a consultant for the ECOWAS Common Investment Market, emphasized that these states lack attractive factors that typically draw foreign investment. Investors seek stability and predictability, avoiding regions with crises, as stated by Aremu. This underscores the importance of creating conditions conducive to investment for sustainable economic growth.

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