The Disappointing Downturn of Foreign Direct Investment in Nigeria

Nigeria, once Africa’s top foreign investment destination, has fallen from grace. Is there a way forward?

The scene is set: the year is 2011, the country is Nigeria and it has just received $8.4 billion in Foreign Direct Investment (FDI), an all-time high. In the same year, the ‘Giant of Africa’ recorded a 2.9 per cent drop in inflation and a whopping $414.5 billion in Gross Domestic Product (GDP), a 13 per cent increase from the $367 billion achieved in 2010. This comes as no surprise, after all with increased FDI comes job creation, economic growth and knowledge sharing. FDI is critical in Nigeria, as foreign investment is a major source of forex inflow. Furthermore, FDI is an economic indicator that signifies faith not just in the Nigerian economy but also in the Nigerian people. 

Fast forward to 2024 and the situation has drastically changed. Nigeria has recorded a steady decline in FDI over the past two years. This has had a significant effect on the populace. Following the exit of pharmaceutical giant, GlaxoSmithKline in 2023, drug prices rose by 900 per cent. To top it off, the country is being overlooked for investment in favour of other African countries, even those with a lower GDP. For instance, Kenya was recently announced as the site of a $1 billion geothermal-powered data centre to be built by Microsoft and G42. The Nigerian government is scrambling to steady the exchange rates, whilst inflation is rising. What’s worse is that the government’s policies aimed at easing the crisis have not yielded significant results. The country that received the highest FDI inflow on the continent in 1997, now seems to repel it...