Chamberlain Peterside, the Chief Executive Officer at Xcellon Capital Advisors, has indicated that Nigeria’s Ministries of Finance, Trade and Investment, and Telecommunications and Digital Economy are poised to propel foreign direct investments (FDIs) in the country.
In a recent interview with CNBC Africa, Peterside underscored that while Nigeria is partially prepared for business, additional immediate steps are necessary.
Wale Edun, the finance minister, holds a pivotal role within Tinubu’s ministerial cabinet, noted Peterside.
As the Coordinating Minister of Nigeria’s Economy, Edun’s responsibilities encompass driving economic growth and fostering foreign direct investment inflows, according to Peterside.
Additionally, Dr. Doris Uzoka-Anite, the Minister for Trade and Investments, commands the second most crucial portfolio for attracting FDIs, as outlined by Peterside. Dr. Bosun Tijani, the Minister for Telecommunications and the Digital Economy follows suit with the third most significant portfolio for driving foreign investments into the nation.
Peterside elaborated that Nigeria has witnessed a surge in foreign direct investments into its digital economy, specifically in the financial technology (FinTech) sector.
This trend has brought in substantial investments that could potentially exceed $2 billion.
In Peterside’s assessment, if ranked, these three ministerial portfolios would stand out as the most instrumental in drawing foreign investments into Nigeria.
Concurrently, he stressed that concerns surrounding the country’s debt burden and the recent revelation by JP Morgan about significantly lower external reserves than previously assumed should influence decisions made by the highlighted ministries.
The Q1/2023 GDP report context
In the Q1/2023 Capital Importation Report released by the National Bureau of Statistics (NBS), the total capital influx into Nigeria for the first quarter of 2023 amounted to $1,132.65 million, which is a decrease from the $1,573.14 million reported in the same period of 2022.
Notably, the primary contributor to this capital inflow was portfolio investment, constituting 57.32% (equivalent to $649.28 million) of the overall capital imported during Q1 2023.
Following closely, other investments accounted for 38.31% ($435.76 million), while Foreign Direct Investment (FDI) represented 4.20% ($47.60 million).
In terms of sectors, the banking industry saw the highest capital injection, recording an inflow of $304.56 million, making up 26.89% of the total capital brought in during Q1 2023.
Subsequently, the production sector garnered $256.12 million (22.61%), and the IT Services sector secured $216.06 million (19.08%) in imported capital.