The inflow of Foreign Direct Investments (FDI) to Nigeria dropped to $2.6 billion in 2020, about $700 million (about N267.4bn) lower than the $3.3bn recorded in 2019.
According to the latest Investment Trends Monitor published by the United Nations Conference on Trade and Development (UNCTAD), Nigeria was so affected due to the drop in crude oil prices, closure of oil development sites when the COVID-19 set in during the lockdown.
The report also said the global FDI flows dropped by 42% in 2020 as it projected that there will further weakness in 2021 which could jeopardise sustainable recovery after a long struggle with the COVID-19 pandemic.
FDI inflow to the sub-saharan Africa dropped by 11% to about $28bn. FDI flows to Africa entirely, dropped by 18% to an estimated $38bn, from $46bn in 2019.
Greenfield or fresh projects fell by 63% to $28bn from $77bn in 2019. The COVID-19 impact on FDI was felt on low prices and low demand for commodities.
Analysis shows that Egypt topped FDI flow in Africa in 2020 despite its -39% inflow drop to about $5.5bn.
At the global level, FDI collapsed in 2020, falling by 42% to about $859bn, from $1.5 trillion in 2019. The FDI finished 2020 more than 30% below the trough after the global financial crisis in 2009.
The decline was concentrated in developed countries where FDI flows fell by 69% to an estimated $229bn. Flows to Europe dried up completely to -4bn while a sharp decrease was recorded in the United States (-49%) to $134bn.
The decline in developing economies was relatively measured at -12% to an estimated $616bn. The share of developing economics in global FDI is 72% being the highest share on record. China topped the ranking of the largest FDI recipients.
According to the report highlight, the FDI fell by -18% in Africa, -4% in developing Asia, -37% in Latin America, among others.
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