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Top 10 sectors that attracted the most foreign investment in Nigeria 2023

In the fiscal year of 2023, Nigeria saw a shift in foreign investment trends amid economic challenges, with a total capital importation of $3.9 billion, a noticeable decrease from the $5.3 billion recorded in the previous year.

This is also the lowest capital importation for Nigeria dating as far back as 2013 when the NBS started publishing data. For context, Nigeria attracted over $23 billion in capital importation in 2019.

Despite this downturn, certain sectors stood out for their ability to draw in capital, showcasing resilience and potential growth areas in the Nigerian economy.

Here we highlight the top ten sectors that attracted the most capital inflow in 2023, underscoring their significance to the nation’s economic landscape.

10. Agriculture Sector

Attracting $19.91 million, the Agriculture sector saw a decrease from $95.80 million. This sector is critical for Nigeria’s food security and employment, and the investment figures point to the need for increased focus to unlock its full potential.

9. Marketing Sector

The Marketing sector, with an inflow of $22.13 million, though not among the highest, showed an increase from $4.41 million, highlighting the growing importance of market research and advertising in the Nigerian economy.

8. Electrical Sector

Witnessing more than a threefold increase in capital inflow to $72.89 million from $22.96 million, the Electrical sector’s growth signifies a drive towards modernizing Nigeria’s power infrastructure and the growing demand for electrical components and services.

7. Telecomms Sector

The telecoms sector, despite experiencing a dip to $134.75 million from $456.83 million, remains a significant contributor to the nation’s capital inflow, reflecting the ongoing need for telecommunications expansion and digital connectivity.

6. I T Services

Notably, the I T Services sector saw a tremendous increase to $226.38 million from a modest $5.81 million, showcasing the burgeoning potential of Nigeria’s tech industry as a new frontier for investment and innovation.

5. Trading Sector

The Trading sector’s inflow stood at $237.52 million, slightly down from $265.35 million, suggesting that trade activities remain essential, with the movement of goods and services still attracting considerable investments.

4. Shares

The Shares sector received $294.08 million, a drop from $469.42 million in 2022, indicating a cautious approach from investors who are possibly waiting for more favorable market conditions before committing to equity investments in Nigerian companies.

3. Financing Sector

With an investment of $445.94 million, the Financing sector showed its pivotal role in facilitating economic growth, although it marked a decrease from $791.16 million in 2022. This sector remains critical for funding development projects and empowering other sectors through financial services.

2. Banking Sector

The backbone of Nigeria’s financial system, the Banking sector, attracted $832.64 million, despite a substantial reduction from the previous year’s $2,089.60 million. The banking sector continues to be a pillar for investment, reflecting investors’ confidence in its stability and regulatory framework.

1. Production/Manufacturing Sector

Dominating the chart with an overwhelming inflow of $1,590.79 million, the Production/Manufacturing sector demonstrated robust performance, significantly higher than the $948.43 million in the preceding year. This sector’s growth signals a positive move towards diversifying the economy and increasing self-reliance in production capabilities.

Optics

Some sectors such as Fishing, Hotels, Servicing, Tanning, and Weaving attracted zero capital inflow in 2023.

These sectors, with their varied performance, illustrate the dynamic and evolving nature of Nigeria’s economic landscape.
The drive in manufacturing and IT services is particularly noteworthy, signaling a shift towards sectors that can offer sustainable growth and diversification away from traditional investments.
The decrease in total capital importation underscores the challenges faced by the Nigerian economy in attracting foreign investment.