The latest capital importation data released by the National Bureau Statistics (NBS) revealed that Lagos and Abuja are Nigeria’s biggest destinations of foreign capital inflows. The two received $8.35 billion out of the entire $8.48 billion in the first quarter of 2019, representing about 98% of Nigeria’s total capital inflow.
According to the NBS data, Lagos is officially Nigeria’s biggest destination of capital inflow with $4.77 billion or 56% as at the end of March 2019. Also, Nigeria’s Federal Capital Territory, Abuja, received a total of $3.55 billion or 42% of capital importation.
Breakdown of States’ capital inflow: Analysis of the NBS data shows that only 20 states in Nigeria were listed as destinations for capital inflows. Asides Lagos and Abuja which received the largest chunks, other states included:
- Rivers ($41 million),
- Adamawa ($25 million),
- Benue ($25 million),
- Cross River ($25 million),
- Imo ($3 million),
- Ogun States ($2.21 billion),
- Kaduna ($2.16 billion),
- Kano ($1 million).
- Katsina ($576 million),
- Borno ($500 million),
- Oyo ($249.9 million),
- Kwara ($200 million),
- Bauchi ($99 thousand),
- Niger ($67 thousand),
- Akwa-Ibom ($55 thousand),
- Anambra ($50 thousand) and
- Delta ($40 thousand).
Note that the traditional foreign investment destination in Nigeria has always been Lagos, usually followed by Abuja. Although, this order was reversed in 2017 (fourth quarter) when Abuja attracted $2.68 billion while Lagos only trailed behind with $2.55 billion. However, Lagos has since overtaken Abuja to become the top destination for capital inflows.
The U.K tops Capital investments into Nigeria: Further analysis shows that the largest capital inflow into Nigeria was from the United Kingdom with $4.5 billion, which represents 53% of total capital inflow in Nigeria.
Also, the United States ranks second with an estimated $1.53 billion or 18% of total capital inflows.
Other countries that make up the top ten biggest share of capital inflows into Nigeria include: South Africa ($763 million), United Arab Emirates ($272 million), Switzerland ($271 million), Mauritius ($268 million), Belgium ($240 million), The Netherland ($208 million), Singapore ($92 million), and Zambia ($60 million).
Best cities to start a business: According to the World Bank report on ease of doing business, Lagos ranked low in terms of ease of doing business in 2018. Specifically, Lagos State ranked number 28th with 54.90 index points, while Abuja ranked 9th with 59.85 points. However, despite being ranked low in the ease of doing business by the World Bank, most investors still prefer to invest in Nigeria’s commercial hub, Lagos.
The World Bank aggregated four indicators in arriving at the ease of doing business index. These include – starting a business, dealing with construction permits, Registering Property, and Enforcing Contracts. In terms of “starting a business”, Abuja ranked first with 85.61 index points, while Lagos State ranked second with 83.67 index points in 2018.