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.”
Financial Derivatives Company (FDC) Limited, a premier economic think-tank and financial advisory firm, led by Bismarck Rewane, has reported that Nigerians have accumulated an estimated $59 billion in cryptocurrency holdings.
Bismarck Rewane
According to data released by the firm highlights the country’s emergence as one of Africa’s and the world’s major players in digital assets.
The earlier disclosure reflects a profound shift in Nigeria’s financial landscape.
In Africa’s largest economy, crypto has moved from a fringe activity to a mainstream tool amid persistent inflation and naira volatility.
Citizens and businesses are increasingly turning to dollar-pegged stablecoins and decentralised platforms, building a parallel financial system with significant economic influence.
Nigeria continues to rank among global leaders in adoption.
According to Chainalysis’ 2024 Global Crypto Adoption Index, the country placed second worldwide for grassroots adoption, driven by widespread use in everyday transactions and cross-border commerce.
Despite these impressive statistics, a notable contradiction remains in public perception.
While stocks, real estate, mutual funds, and foreign currency are openly discussed, many Nigerians still approach cryptocurrency with caution, often downplaying their involvement.
Crypto assets, or cryptocurrencies, are digital assets utilizing cryptography, peer-to-peer networking, and distributed ledger technologies (like blockchains) to secure, verify, and record transactions.
Unlike traditional fiat currencies issued by central banks, these assets operate without central intermediaries, functioning globally as alternative stores of value or transactional mediums.
Flutterwave, an African-founded payments technology company, has partnered with Xoom, PayPal’s international digital money transfer service, to enable faster international money transfers into Nigeria.
The partnership connects Xoom’s global money transfer network with Flutterwave’s local payout infrastructure, allowing customers worldwide to send funds directly to Nigerian bank accounts with local settlement in naira.
Under the arrangement, Flutterwave converts Xoom transfers and settles them locally, enabling recipients to receive funds directly into accounts held at Access Bank, United Bank for Africa, Zenith Bank, First Bank of Nigeria, Guaranty Trust Bank and other participating banks.
Nigeria is one of Sub-Saharan Africa’s largest remittance recipients, receiving more than $20 billion in personal remittances in 2024. However, international payments have historically been affected by foreign exchange constraints and settlement delays.
Flutterwave said the partnership aims to address those challenges by combining Xoom’s international reach with its local compliance capabilities and banking partnerships to simplify cross-border money transfers into Nigeria.
Xoom enables consumers to send money, pay bills and top up mobile phones in approximately 160 markets worldwide as part of PayPal’s global payments ecosystem.
“Millions of Nigerians rely on money from abroad to support everyday needs, whether it’s families receiving help from loved ones, freelancers getting paid for their work, or individuals earning income from the global economy,” said Olugbenga Agboola, founder and CEO of Flutterwave.
“This partnership makes it easier and more reliable for people in Nigeria to receive funds and stay connected to opportunities beyond borders.”
The collaboration expands Flutterwave’s cross-border payments infrastructure and strengthens access to international remittance services in one of Africa’s largest payments markets.
The Securities and Exchange Commission (SEC) has unveiled plans to make sustainability reporting mandatory for large public interest entities from 2027 as Nigeria moves to align its corporate disclosure framework with global environmental, social and governance (ESG) reporting standards.
The phased implementation will begin with voluntary adoption by early adopters and large public interest entities before becoming mandatory in 2027. The requirement will extend to other public interest entities in 2028 and small and medium-scale enterprises (SMEs) by 2030.
Dr Emomotimi Agama, Director-General of the SEC, disclosed this at the 2026 Financial Institutions Training Centre (FITC) Sustainability and ESG Conference 3.0 in Lagos, themed ‘Building a Sustainable Africa: Integrating Environmental Stewardship, Social Investment, and Strong Governance for a Prosperous Future’.
Agama said Nigeria’s sustainability disclosure regime is being aligned with the International Sustainability Standards Board (ISSB) framework, including IFRS S1 and IFRS S2, which have emerged as the global benchmark for sustainability reporting.
He said that institutional investors increasingly consider ESG performance a key determinant of capital allocation rather than a peripheral corporate responsibility issue, noting that the price of entry is disclosure.
He said the reforms would strengthen investor confidence and position Nigerian businesses to access global capital markets, where sustainability disclosures are becoming an essential investment requirement.
According to him, Nigeria’s capital market has recorded significant expansion, with market capitalisation growing from about N130 trillion to nearly N160 trillion following recent market reforms, while assets under management have surpassed N9 trillion.
To deepen sustainable finance, Agama said the commission was promoting infrastructure, green and municipal bonds, alongside infrastructure-focused investment funds, to mobilise long-term capital for critical national projects.
He added that the SEC would also encourage investments in the blue economy and support financing for the power sector through green energy bonds, project bonds and public-private investment structures.
The SEC chief cited the recent launch of the Nigerian Exchange (NGX) Impact Board as another milestone in advancing sustainable finance and urged companies, regulators and investors to move beyond commitments by embedding sustainability into governance, operations and investment decisions.
Managing Director and Chief Executive Officer of the Financial Institutions Training Centre (FITC), Dr Chizor Malize, said sustainability and ESG had evolved from compliance issues to core drivers of business competitiveness, investment decisions and economic development.
She said the conference, now in its third edition since 2024, had become a leading platform for advancing sustainability discourse in Africa, adding that this year’s gathering was designed to move stakeholders “from conversation to commitment”.
Chairman of the FITC Advisory Board, Prof Fabian Ajogwu, described governance as the foundation of sustainable development, arguing that Africa must become a standard-setter rather than merely adopting frameworks developed elsewhere.
Although Africa contributes less than four per cent of global greenhouse gas emissions, he said, the continent bears a disproportionate share of climate-related impacts, including worsening floods and increasingly erratic weather patterns.
Ajogwu also cited estimates that poor governance costs Africa between $88 billion and $90 billion annually, while highlighting technology-driven agricultural initiatives, including a partnership involving Morocco’s OCP Group and the Nigeria Sovereign Investment Authority (NSIA), as examples of practical models that should be replicated across the continent.
Delivering the keynote address, Chairman of the MTN Nigeria Foundation, Mosun Belo-Olusoga, said the debate over the relevance of sustainability and ESG had ended, with the real challenge now centred on implementation.
She observed that global investors increasingly evaluate businesses on governance quality, resilience and their ability to manage environmental and social risks, in addition to profitability.
Belo-Olusoga noted that despite contributing the least to global carbon emissions, Africa possesses vast arable land, abundant renewable energy resources and critical minerals required for the global energy transition.
She identified four leadership priorities for the continent: shifting from short-term performance to long-term value creation, replacing corporate philanthropy with strategic social investment, moving beyond regulatory compliance to responsible leadership, and strengthening collaboration among governments, businesses and development partners.
She also outlined five priorities for Africa’s ESG agenda over the next decade, including embedding sustainability into corporate strategy and governance, investing in human capital, mobilising indigenous capital through instruments such as green bonds and pension funds, strengthening institutional accountability, and fostering partnerships in renewable energy, digital technology and climate-smart agriculture.
“The defining challenge before Africa is not a shortage of vision; it is execution,” Belo-Olusoga said, urging governments to create enabling policies, businesses to integrate ESG into enterprise risk management, and financial institutions to develop innovative financing mechanisms that support a green and inclusive economy.
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