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Worst in 10 years: 24 of Nigeria’s 36 states got zero FDI in 2021

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Nigeria’s official data source, the National Bureau of Statistics (NBS) has released data (Pdf), which indicated that 24 out of 36 states of the Nigerian Federation got no Foreign Direct Investment (FDI) in the year 2021.

The West African country only managed to generate a total of $698.7m from Foreign Direct Investments in 2021 which according to the NBS was the lowest the country recorded in 10 years.

As expected, Lagos state, the commercial capital of Nigeria got the highest FDI in the year in review with 5,823.36, followed by Abuja which recorded 833.40

A foreign direct investment (FDI) is a purchase of an interest in a company by a company or an investor located outside its borders. Generally, the term is used to describe a business decision to acquire a substantial stake in a foreign business or to buy it outright in order to expand its operations to a new region. It is not usually used to describe a stock investment in a foreign company.

The 24 states that attracted not FD1 in 2021 are Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Edo, Enugu, Gombe, Imo, Jigawa, Kaduna, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ondo, Plateau, Sokoto, Taraba, Yobe and Zamfara.

 

Table showing 2021 quarterly Foreign Direct Investments (FDI) figures across Nigerian states.

FDI is one of the three major types of investments and a critical source of capital inflow into a country. Other sources include foreign portfolio investment, foreign loans, and trade credits, among other investments.

Companies considering a foreign direct investment generally look only at companies in open economies that offer a skilled workforce and above-average growth prospects for the investor. Light government regulation also tends to be a strong factor. Nigeria to a large extent is lagging behind on those metrics, with policy inconsistency that characterized the Nigerian economy like the closure of the Nigerian land borders in August 2019, the economy cannot be said to be “open” and neither is Nigeria’s skilled workforce above average.

 

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IMF Chief, Ceyla Pazarbasioglu, to visit China over Africa’s growing debt profile

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As the debt profile of many African countries continues to rise, the International Monetary Fund strategy chief, Ceyla Pazarbasioglu will travel to China next week for another high-level meeting.

Her travel is part of efforts to press the world’s largest sovereign creditor for quicker progress on debt restructurings for countries in need.

The IMF chief had called for debt restructuring arrangements for Zambia and Chad to be completed shortly.

Pazarbasioglu said it was critical to move forward and that “outreach to China next week is very important, at the highest levels.”

“It’s moving – very slowly, but it’s moving,” Pazarbasioglu said, noting that the participation of mining company Glencore Plc in the Chad treatment was also “a very good sign” that “even the most difficult private sector participants” were participating.

She said the Paris Club of official bilateral creditors had taken years to hammer out their debt relief processes, and China was learning, although she noted that the debt issues facing borrowing countries now were acute.

“The problem we have is that we don’t have that time right now because these countries are very fragile and dealing with debt vulnerabilities,” she said. “What we need is speed.”

Pazarbasioglu said the IMF would continue to press for changes to the Common Framework, including a freeze in debt payments when countries apply for a debt treatment, as well as clearer procedures and timelines for action, and ensuring comparable treatment for private creditors.

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Botswana central bank predicts fall of inflation rates, maintains monetary policy

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Botswana’s central bank has predicted that the country’s inflation rate will gradually fall back within its target range by 2024.

The bank is predicting that inflation will fall back within the 3%-6% range in the third quarter of 2024. The prediction has made it keep its monetary policy rate unchanged at 2.65% on Thursday.

The bank’s governor, Moses Pelaelo while speaking at a news conference said “the domestic economy will continue to perform below capacity in the medium term and therefore not pose any inflationary pressures.”

The inflation rate in the Southern African country dipped to 13.1% year on year in October from 13.8% in September but is still far above the central bank’s 3%-6% preferred band.

“The drop in inflation in the past months is due to the dissipating effects of previous increases in administered prices,” Pelaelo said.

According to the World Bank, Botswana’s reliance on diamonds and a public sector-driven model makes the economy vulnerable to external shocks, as diamonds contribute over 80% of total exports and are a major source of fiscal revenues.

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