E-Financial
Investors Shun Nigeria, Prefer SA & Egypt
Nigeria is behind South Africa and Egypt as the leading destination in Africa for foreign direct investment (FDI) according to the FDI report released by Global Greenfield Investment Trends.
The World Bank said that “FDI is net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments.”
Earlier this year, Mallam Sanusi Lamido Sanusi, Central Bank of Nigeria (CBN) governor had stated that Nigeria recorded appreciable marginal growth in the FDI growth in Q4 2012 to about $6.07 Billion.
Nigeria also stood at sixth position among leading FDI inflow economies in the Middle East and Africa (MEA) region with 54 projects. The report lists leading countries in the region as: UAE (291), South Africa (147), Saudi Arabia (107), Oman (73), Egypt (54), Nigeria (54), Qatar (54), Kenya (50), Morocco (48) and Bahrain (37).
Nigeria and Egypt also recorded 20 per cent increase in FDI inflow, whereas other leading African countries suffered declines like South Africa five per cent, Kenya nine per cent and Morocco 34 per cent.
“The number of FDI projects attracted by Oman increased by 48.98per cent and its market share of inward FDI in the region increased from 3.16per cent in 2011 to 5.33per cent in 2012. Egypt and Nigeria also experienced an increase in project numbers by 20per cent in 2012.”
Dr. Egwaikhide Christian Imoudu, of the department of Economics and Management Sciences at the Nigerian Defence Academy (NDA) – Nigeria’s leading military academic institution – noted that FDI inflow into the economy is natural, considering its population, size and resource base. But he regretted that despite the huge inflow recorded annually over the past decade, not much impact is evidenced in the lives of the citizens.
“Nigeria as a country, given her natural resource base and large market size, qualifies to be a major recipient of FDI in Africa and indeed is one of the top three leading African countries that consistently received FDI in the past decade,” said Dr. Imoudu.
Writing in the International Journal of Business and Social Sciences (vol.3 No.6), D. Imoudu stated theFDI flow trend in the country has several implications for the economy.
“First, even though the volume of FDI to Nigeria has increased substantially since the 1990s, Nigeria remains largely marginalised in the context of financial globalisation. Second, spillover effects of FDI in oil exploration and other mining activities are minimal as the technology employed is capital rather than labour intensive. This means that the effect of FDI in Nigeria to date has been dependent on what the revenues are used for. Third, the flow of FDI to the extractive sector is not growth enhancing as much as other productive sectors, because oil sector is often an enclave sector with little backward and inward linkages with other sectors.
“Fourth, secondary and tertiary activities like manufacturing and services are not playing leading roles in the determination of national output, employment generation and income, and this partly explains why the majority of Nigerian citizens are living in poverty, the country’s huge petroleum resources notwithstanding.”
Consequently, he noted that “the solution to these problems is to attract FDI into diversified and higher value-added activities. In this regard, one important policy objective to reduce the barriers to FDI effectiveness is to build diversified economy through investment in human capital, infrastructure and productive capacity. Clearly then, the challenge for Nigeria is how to attract FDI in more dynamic products and sectors with income elasticity of demand.”
Mallam Sanusi, also expressed concerns over the nation’s dependence on earnings from the oil sector for economic sustenance.
Rising from last week’s CBN monetary policy committee (MPC) meeting in Abuja, the apex financial body expressed “concerned about the threat posed by developments in the oil sector arising from uncertain oil market environment high output leakages arising from oil theft which has negatively affected the oil sector’s contribution to GDP and the prospects for declining output if the state of affairs continues.
“The Committee observed that the accretion to reserves resulted principally from increased portfolio capital inflows. The Committee noted the potential effect of this development on exchange rates, reserves and the capital account in the event of capital flow reversal, and thus stressed the need to maintain stability and retain confidence of investors in the consistency of monetary policy.”
The FDI report 2013 noted that “while all regions of the world experienced a decline in FDI, the decline in FDI into Africa was less than the world average and
Africa increased its market share of global FDI projects from 5.56 per cent in 2011 to 6.01 per cent in 2012.
In contrast, the global market share of Western Europe fell 1.5 per cent in 2012, due to the European debt crisis and stagnating economic growth.”
It gave reasons for the poor growth in the developed economies to “lacklustre economic growth in Europe, Japan and Brazil, much slower growth in China, political instability in the Middle East, and policy uncertainty in the US all negatively impacted the global FDI market. The extreme case was in Syria, with a decline of more than 90 per cent in FDI projects in 2012.”
The next currency crisis could accelerate the shift of the roughly $315 billion global stablecoin market into a digital-dollar alternative for citizens in emerging economies, notably in regions like sub-Saharan Africa and Latin America.
As local fiat currencies face devaluation and high inflation, citizens and businesses are increasingly utilizing smartphone-based stablecoins (such as USDT and USDC) as hedges and primary mediums of exchange.
According to the International Monetary Fund (IMF), the rapid adoption of dollar-linked digital assets—particularly in countries heavily affected by inflation like Nigeria—poses significant risks to monetary sovereignty.
With up to 95% of surveyed individuals in some African markets preferring to receive payments in stablecoins over local fiat, the rising volume of these decentralized, cross-border channels weakens domestic currency demand and dilutes the effectiveness of local monetary policy.
IMF observed in a report titled “Stablecoins in Nigeria: A Growing Cross-Border Channel” noted that the widespread use of stablecoins poses risks to monetary sovereignty, particularly as more individuals and businesses turn to digital dollar-linked assets for savings and transactions.
Nodding in agreement is Future Investment Initiative Institute (FII Institute), a non-profit organisation run by the Public Investment Fund, Saudi Arabia’s main sovereign wealth fund.
FII Institute said that central banks face structural challenges.
And according to the institute, when citizens move savings out of national banks and into private digital wallets, conventional capital controls lose their grip.
Institutions like the Bank for International Settlements warn that interest-bearing stablecoins compete directly with domestic-currency deposits, complicating financial oversight and making smartphone-based transfers incredibly difficult for authorities to monitor.
In Nigeria, Naira depreciation has pushed users toward dollar-stablecoins, according to report by Gino Matos in cryptoslate.com.
A stablecoin is a type of cryptocurrency designed to maintain a steady value by pegging its price to a reserve asset, such as a fiat currency (e.g., the U.S. dollar) or a commodity (e.g., gold).
They act as a bridge between traditional money and the digital asset world, providing the speed of crypto without the extreme price swings of assets like Bitcoin.
Federal government has reopened three federal government of Nigeria (FGN) bond issues valued at N1.2 trillion for subscription as part of efforts to raise long-term funds from the domestic debt market.
The Debt Management Office (DMO), which announced the offer on Tuesday, said the three reopened bond issues are each valued at N400 billion.
According to the DMO, the first offer is the January 2035 FGN Bond, a 10-year reopening, carrying an interest rate of 22.60 per cent per annum.
The second is the May 2028 FGN Bond, a 15-year reopening, with a coupon rate of 15.45 per cent per annum, while the third is the June 2037 FGN Bond, a 20-year reopening, also valued at N400 billion.
The office said the bond auction is scheduled for July 20, while successful subscriptions will be settled on July 22.
It explained that the bonds are offered at N1,000 per unit, with a minimum subscription of N50 million and additional investments in multiples of N1,000.
For the reopened bonds, the DMO said successful bidders would pay a price based on the yield-to-maturity that clears the auction, in addition to any accrued interest on the instruments.
Interest on the bonds will be paid every six months, while the principal will be repaid in full on the respective maturity dates.
The DMO reaffirmed that FGN bonds are backed by the full faith and credit of the Federal Government and constitute obligations chargeable on the general assets of the federation.
It added that the bonds qualify as trustee investment securities under the Trustee Investment Act and enjoy tax exemptions for eligible investors, including pension funds, under the Company Income Tax Act and Personal Income Tax Act.
The bonds are listed on the Nigerian Exchange (NGX) and FMDQ Securities Exchange and also qualify as liquid assets for banks in computing their liquidity ratios.
FGN bonds are long-term debt instruments through which investors lend money to the Federal Government in exchange for periodic interest payments and repayment of the principal at maturity.
Gigbanc, Nigerian fintech startup, has announced it is winding down operations, after three years, citing a tough fundraising climate.
Paul Omoregie Okundaye, and Babatope Oni, co-founders of Gigbanc
The company, which set out to build cross-border financial infrastructure for African freelancers, creators, entrepreneurs and businesses, confirmed the decision in a statement signed by its co-founders.
“After careful consideration, Gigbanc’s leadership has made the difficult decision to wind down operations,” the company said, adding that the move “reflects the broader funding environment affecting early stage startups in Africa, a challenge that has been widely documented across the ecosystem.”
Since its founding, Gigbanc grew a community of more than 150,000 people across multiple countries and processed over $7.28 million (N10 billion) in payment volume, helping thousands of users receive their first international payment.
The company also ran conferences, fellowships and community events aimed at connecting entrepreneurs and creators across the continent.
`Despite the shutdown, Gigbanc said it is not walking away emptyhanded.
The company disclosed that it is in active acquisition discussions with a prominent financial infrastructure firm, with further details to be shared once the process closes.
Paul Omoregie Okundaye, co-founder and CEO, and Babatope Oni, co-founder and CTO, framed the closure as the end of a chapter rather than the erasure of Gigbanc’s impact.
“While Gigbanc is winding down operations, we don’t see this as the end of what we built together. Instead, we see it as the completion of an important chapter,” the founders said. “The relationships, lessons, community, and impact we’ve created will continue to outlive the company itself.”
The founders thanked users for their trust throughout the company’s run, citing everything from transactions and feature requests to bug reports and criticism as forces that shaped the product
“We leave this journey incredibly proud. Proud of our team, who gave everything they had.
Proud of the community that rallied behind us,” they said.
Gigbanc’s exit adds to a growing list of African startups that have shut down or scaled back operations in recent years as venture funding on the continent has tightened, with founders increasingly citing capital scarcity as the primary driver behind closures and consolidations.
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