Eighteen states from northern Nigeria have attracted zero investment from outside the country in the first nine months of 2024, NBS report shows.
According to the Capital Importation report published by the National Bureau of Statistics (NBS) for the first three quarters of 2024, Kaduna was the only northern state to attract foreign direct investment (FDI) to the tune of $1.95 million.
The report revealed that Nigeria’s total capital importation in the first nine months of the year was $7.1 billion.
The NBS data shows that only Lagos, Ekiti, Enugu, Kaduna, and the Federal Capital Territory (FCT) have recorded capital importations so far for this year, 2024.
The report noted that from January to September of 2024, 32 out of 36 states attracted zero capital importation through the FDI.
“Out of the five states that recorded capital importation during the quarter, Lagos state remained the top destination with US$650.41 million, accounting for 51.92% of the total capital imported.
“Abuja (FCT) followed with US$600.02 million (47.90%), and Kaduna state with US$1.95 million (0.16%). Others were Enugu and Ekiti states with US$184,229 and US$96,600 respectively,” the report partly stated.
Analysts said Lagos and the FCT’s dominance reflects their infrastructure, regulatory environment, and economic activities as opposed to other states.
With Kaduna as the only Northern State in the list, questions were raised about why it succeeded ahead of the 18 other northern states.
The budget performance report of 32 state governors spent N69.71bn on their travel costs, including local and foreign trips within the first six months of 2024.
However, most of the states drew nothing from their international trips within the time frame but expended huge resources.
Residents of the states have repeatedly expressed frustration over their governors’ frequent travels, lamenting the lack of tangible outcomes or development tied to these trips.
Paul Daniel, a Bauchi-based economic analyst, argues that these trips by state governors often serve as political spectacles rather than strategic economic initiatives.
What Foreign Investment Makes
FDI plays a critical role in driving economic growth and development for a state by providing the much-needed capital to fund infrastructure projects, industries, and businesses, leading to increased economic activity and job creation for citizens.
Analysts maintained that investments in infrastructure, such as roads, energy, and telecommunications, improve connectivity and enhance business operations, fostering a conducive environment for commerce.
Additionally, foreign investments introduce advanced technology, skills, and expertise, promoting innovation and building the capacity of the local workforce.
States also benefit through increased government revenues from taxes and duties paid by investors, enabling the government to finance essential public services and social programmes.
Moreover, foreign investment helps diversify the economy by attracting funding to underdeveloped sectors, reducing dependence on a single industry and mitigating economic risks.
It also integrates local markets into global trade networks, providing opportunities for businesses to access international markets and boost exports. Foreign partnerships also empower local industries and small businesses, fostering growth and sustainability.
Kaduna’s Success
For Paul, Kaduna’s ability to attract foreign investments can be traced back to the combination of factors such as the state’s secularity and proactive policies, infrastructural development, and reforms initiated by the previous administration under Governor Nasir El-Rufai.
“There are agricultural activities, industrial and businesses in the state, the mineral resources, its civilisation and the amalgamation of different people in the state, all these are good factors to attract foreign investment,” Paul told WikkiTimes.
He said the state, besides being the former capital of the North, accommodates different people with diverse backgrounds, which is also essential for economic development.
In addition, he said El-Rufai, who governed Kaduna from 2015 to 2023, was renowned for his focus on economic reforms and making the state investor-friendly.
Key among his initiatives was the establishment of the Kaduna Investment Promotion Agency (KADIPA) in 2021, which streamlined investment processes, reduced bureaucratic bottlenecks, and actively engaged potential investors.
The agency’s one-stop-shop model ensured that investors could secure necessary permits and licenses with ease, positioning Kaduna as a state open for business.
Moreover, the state made a stride to invest in infrastructure, including roads, schools, and healthcare facilities, and undertook urban renewal projects to improve the quality of life for residents and make the state appealing to foreign businesses.
The state also embraced public-private partnerships (PPPs), which contributed to the development of industrial zones and agro-processing facilities.
According to the analyst, El-Rufai’s administration undertook several foreign trips aimed at wooing investors. These trips were not merely ceremonial visits but part of a well-coordinated strategy to showcase Kaduna’s potential.
Notably, El-Rufai’s participation in international investment forums and his focus on promoting specific sectors, such as agriculture and renewable energy, helped secure deals that laid the groundwork for future investments.
In contrast, many governors in the region have embarked on foreign trips without clear objectives or follow-up strategies that have yielded little to no tangible results.
Observers, including Paul, argue that the failure to present well-defined investment opportunities or create enabling environments for businesses has denied the states from accessing foreign investments.
Paul opined that Kaduna’s success offers valuable lessons for other northern states. “For instance, having a dedicated investment promotion agency is essential,” he stressed.
He said states must establish similar bodies to coordinate efforts and act as a bridge between the government and investors.
“Kaduna’s focus on improving physical and social infrastructure made it an attractive destination. Other states need to replicate these efforts. While Kaduna also has its security challenges, the state has implemented measures to mitigate risks. Other current governors must demonstrate similar commitment and political will to drive economic development.”
Challenges in the North
The NBS report also highlights systemic issues such as insecurity in Northern states that hinder foreign investments creating an atmosphere of uncertainty and discouraging potential investors from committing their resources.
Many states in the region lack basic amenities such as reliable power supply, good road networks, and internet connectivity, which are crucial for attracting and retaining investments.
Additionally, corruption further complicates investment processes, making it difficult for businesses to operate smoothly.
The economic expert, Paul, concluded that “To improve outcomes, states must develop clear investment roadmaps and engage with stakeholders before and after such trips to ensure follow-through.”
