Home Opinion Features Why Lagos ranks high in FDI importation in Nigeria

Why Lagos ranks high in FDI importation in Nigeria

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Ever wondered why the Lagos State’s tagline is the “Centre of Excellence?” Well, a penny for your thoughts: you need not look any further or cudgel your brains for answers because it’s quite obvious for even the blind to see!

Lagos State is the Centre of Excellence because of one of many reasons chief amongst which is the fact that it is the last word in socioeconomic growth and development not just amongst other sub-nationals but even far beyond the shores of the country today!

It is therefore little wonder that like the bee, the state continues to attract more investments compared to other states of the federation.

Interestingly, Lagos State has been able to sustain its winning streaks for many reasons: within and around the metropolis and environs, several projects are either ongoing or completed, thus boosting the high level of infrastructure, which remains a huge attraction for many prospective and old investors, who continue trooping into Africa’s largest hub of commerce.

More importantly, with a capable leader at the helm of Lagos affairs in the person of Governor Babajide Sanwo-Olu, he has continuously proven even his critics wrong about the huge investment potentials of the state as a top investment destination not only in Nigeria but pan Africa!

According to data sourced at the National Bureau of Statistics, Lagos State remained the top destination in Q3 2023 with US$308.83 million, accounting for 47.18 per cent of total capital importation, followed by Abuja (FCT) with US$194.66 million (29.73 per cent) and Abia State with US$150.09 million (22.93 per cent).

The highlights of the Q3 2023, total showed that the capital importation into Nigeria stood at US$654.65 million, lower than US$1,159.67 million recorded in Q3 2022, indicating a decline of 43.55%.

In comparison to the preceding quarter, capital importation fell by 36.45 per cent from US$1,030.21 million in Q2 2023.

Other investment ranked top accounting for 77.56 per cent (US$507.77 million) of total capital importation in Q3 2023, followed by Portfolio Investment with 13.31% (US$87.11 million) and FDI with 9.13 per cent (US$59.77 million).

It might also interest you to know that Lagos has been named the fifth greatest African city with a high desire among people to live, work, and invest, a 2023 research by Brand Finance City has revealed.

More foreign capital inflows came through “other investments”, followed by FDI, and Portfolio Investment, the report said.

Equities supplied the largest chunk of capital inflows, while the United Kingdom emerged as the top source of capital investment in Nigeria in the year.

By destination, Lagos emerged as the top destination of capital investment in Nigeria with $8.3 billion, followed by Abuja, which received $1.3 billion.

The other states on the list are Abia with relatively lower $56 million, Niger with $16.4 million and Ogun with $13.4 million.

Anambra State recorded $10.2 million, Kaduna State recorded $4.03 million, Sokoto got $2.5 million and Kano got $2.4 million. Akwa Ibom received $1.05 million ahead of Adamawa, which received just $20,000.

All the remaining 26 states received no foreign capital inflows the entire year, the report shows. They are Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo, Jigawa, Katsina, Kebbi, Kogi, Kwara, Nasarawa, Ondo, Osun, Oyo, Plateau, Rivers, Taraba, Yobe, and Zamfara States.

Sanwo-Olu himself, who justified why Lagos State remains investors’ haven, said this was largely due to the unencumbered operating business environment.

The governor, who reiterated his administration’s commitment to creating a welcoming environment for investment, particularly emphasised the potential of multinationals from the United States and Africa. During a courtesy visit by the Corporate Council on Africa (CCA), headed by its President/CEO Ms. Florie Liser, at the Lagos House, Marina, recently, the state encouraged both foreign and local investors to view the state as an appealing destination for investment.

“The world is actually moving and it is moving very fast. And it is no longer news that if the world wants to move, Africa is where that movement can happen. For us in Lagos, we are ready and our government is open.

“We have a city to run, a massive subnational that’s bigger than some other African countries. We are striving to make the city liveable, resilient and equally competitive with other cities in the world and when we see ratings and outcomes of global rankings, we are excited. What it does for us is that it makes us also work harder because nobody is slowing down.

“This government is certainly committed. We are pushing on all the verticals of our economic agenda. We are trying to make life more meaningful for our citizens. We are trying to galvanise all the opportunities that are here. Lagos is open; it is ready and it is really for people to see it, smell it, and make the right call. The call is to see it as an investment attractive destination. And whatever you want us to do as a government, we are always willing to do it.

“We are happy that you have come on a courtesy visit. We are willing to grow the partnership. My government is open and willing to engage further in whatever form that can make your members feel confident that the government is helping and willing to help investments. The number is here, people are here and the environment is here. Let us create a mutual government-to-business and business-to-government relationship”, Sanwo-Olu said.

Highlighting his administration’s alignment with the THEMES+ development agenda, Sanwo-Olu detailed how his government has strategically created opportunities in essential sectors like public transport, healthcare, education, technology, and entertainment.

He shared his enthusiasm for the upcoming inauguration of the Red Line rail project by President Bola Tinubu, a significant achievement initiated by his administration aimed at improving public transit and enhancing the quality of life in Lagos.

The governor expressed pride in being able to present the Red Line rail to the public, emphasising its capacity to transport hundreds of thousands of commuters, thereby making Lagos more habitable for its citizens.

In her address, Liser from the CCA — a consortium of United States and African multinational corporations — affirmed the council’s eagerness to collaborate with the state government across various sectors, including energy, infrastructure, agriculture, technology, trade, and finance.

She lauded Sanwo-Olu’s notable accomplishments, particularly the Red Line project, and highlighted the administration’s focus on fostering investment in fintech and healthcare.

She also extended an invitation to the governor to speak at the CCA Africa business summit in Dallas, Texas, from 6th to 9th May, offering him a platform to discuss his tenure’s impact on the state

Cole is a public affairs commentator

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