FORMER Labour Party presidential candidate, Peter Obi, has blamed Nigeria’s declining foreign direct investment (FDI) on poor leadership and weak governance.
Obi made this position known about the poor investment inflow under the President Bola Tinubu-led administration in a statement on Friday, August 15.
He pointed out that FDI declined in the first quarter (Q1) of this year by over 70 per cent despite several official business trips Tinubu and his officials have embarked on.
“While the President, Ministers, and other government officials continue their global galivanting in search of FDI, our poor performance in key governance indicators – such as rule of law, regulatory quality, government effectiveness, and voice and accountability – continues to prove that you cannot attract sustainable foreign investment with poor leadership and governance,” he said.
Referring to a recent report by the National Bureau of Statistics (NBS), which revealed that FDI to Nigeria declined by about 70 per cent in the first quarter of 2025, falling to only $126.29 million from $421.8 million in the last quarter of 2024, Obi stressed the role of strong public institutions in attracting investment.
He noted further that of the total capital importation of about $5.64 billion in the first quarter of 2025, FDI accounted for only about 2.24 per cent, compared to 8.2 per cent in the fourth quarter of 2024.
“Disturbingly, about 90% of the imported capital went into speculative money market instruments. With such a high proportion of capital importation flowing into speculative investments, the impact on industrial growth or job creation is highly insignificant and elusive, given the ease with which such “hot money” can exit the economy.
“Let me reiterate: sustainable economic growth and development cannot be achieved through poor leadership and weak governance—problems that are reflected in declining FDI and our poor performance in key governance indicators,” he stressed.
He buttressed his points further that capital flows to the manufacturing sector declined exponentially by 32.1 per cent, dropping to only $129.92 million in the first quarter from $191.92 million in the same quarter of 2024
According to Obi, there is no better confirmation of the lack of trust in the current government, whose reforms remain uncoordinated and largely reactive.
“In 2024, while global FDI flows declined, FDI to Africa significantly increased to $97 billion—a rise of about 75% compared to 2023. Europe, the United States, and China were the main sources of this FDI. Egypt attracted the highest share in Africa, with $46.58 billion.
“Other top recipients included Ethiopia ($3.98 billion), Côte d’Ivoire ($3.80 billion), Mozambique ($3.55 billion), Uganda ($3.30 billion), Democratic Republic of Congo ($3.11 billion), South Africa ($2.47 billion), Namibia ($2.06 billion), Senegal ($2.02 billion), Guinea ($1.83 billion), and Morocco ($1.64 billion),” he cited.
He said it was disappointing to note that Nigeria — the so-called “Giant of Africa”—received only $1.08 billion, only about one per cent of Africa’s total FDI, representing a decline of about 42 per cent from 2023.
“Worse still, after this 42% drop between 2023 and 2024, FDI to Nigeria has further declined by 75% between Q4 2024 and Q1 2025. We cannot achieve sustainable growth and development with ineffective leadership and a weak government,” Obi added.
The ICIR had reported that the National Bureau of Statistics (NBS) released the ‘Nigeria Capital Importation Q1 2025’ on Tuesday, August 5.
The report revealed that portfolio investment stood at $5.2 billion, accounting for 92.25 per cent of the total inflows.
Other investment inflow stood at $311.17 million, while FDI recorded the least inflow with $126.29 million.
The report noted that only the Abuja ($3.04billion), Lagos ($2.5billion), Ogun ($7.9million), Oyo ($7.81million) and Kaduna($4.06 million) states attracted foreign direct investment in Q1, leaving questions about the other 30 states, despite collecting huge federation allocations.
The ICIR had, in this publication, analysed why Nigeria needs to attract more FDI as it will strengthen the naira against other currencies and bring about foreign exchange liquidity in the country.