Nigeria’s cross-border greenfield capital investment in 2019 grew by 28 per cent to $10.2bn, according to the latest report by fDi Market Intelligence, a research unit of Financial Times.
The report released on Thursday described a greenfield investment as a type of foreign direct investment where a parent company creates a subsidiary in a different country, building its operations from the ground up.
In terms of the number of projects, the report said foreign companies executed 73 FDI projects in Nigeria in 2019.
This ranks Nigeria among the top 10 destinations for FDI projects in the Middle East and Africa.
“FDI into Nigeria increased with regards to number of FDI projects and capital investment by 35 per cent and 28 per cent, respectively,” the report stated.
Commenting on the report, the Deputy Editor of fDi Magazine, Jacopo Dettoni, said the volume of announced greenfield FDI projects globally was flat in 2019 compared with a year earlier, as their estimated capital investment fell by about 15 per cent to $795.7bn, but remained above the 2017 total of $651.1bn.
He said, “FDI into renewable energy reached new highs in 2019, with total pledged investment estimated at $92.2bn, second only to that of oil and gas at $123bn.
“From a geographical standpoint, Africa attracted the highest ever volume of FDI projects as reform efforts in major economies both in North Africa and sub-Saharan Africa are paying dividends.”
The report noted that greenfield FDI remained stationary with the number of FDI projects reaching 15,558, compared to the 15,561 recorded in 2018.
In Africa, the investment market report stated that FDI by number of projects grew 49 per cent to 998, compared with a 12 per cent increase between 2017 and 2018.
It added that FDI into the Middle East and Africa by project numbers increased 38 per cent in 2019, from 1,261 to 1,746, while capital investment dropped 16 per cent to $115.2bn.
The market report said, “FDI into Africa by number of projects grew 49 per cent to 998, compared with a 12 per cent increase between 2017 and 2018, increasing its market share of FDI into the region to 57 per cent.”
“Egypt replaced South Africa as the second ranked destination by projects in the region, experiencing a 60 per cent increase from 85 to 136 projects.
According to the investment report, FDI into Kenya by number of projects increased 78 per cent to 87, accounting for five per cent of FDI in the region and more than double the number of FDI projects recorded in 2017.
It identified Dangote Group’s plan to establish a new $2bn phosphate fertiliser plant in Togo as one of the major investments in Africa that would create 2,500 jobs.
Giving a projection of the impact of COVID-19 on the investment landscape, the Chief Executive Officer, Wavteq, Dr Henry Loewendahl, estimated that there would be a 40 per cent decline of greenfield FDIs in 2020.
According to him, preliminary data for March 2020 already show a 50 per cent decline in greenfield FDI compared with March 2019.