Obi Blames Nigeria’s Falling FDI On Poor Leadership

Nigeria’s foreign direct investment (FDI) has suffered a dramatic collapse, falling by approximately 70% in the first quarter of 2025, according to recent data from the National Bureau of Statistics.

The sharp decline has prompted strong criticism from opposition leaders, who blame poor governance for the country’s inability to attract sustainable foreign investment.

Former Labour Party presidential candidate Peter Obi delivered a scathing assessment of the government’s economic performance, highlighting Nigeria’s deteriorating position in attracting foreign capital despite officials’ frequent international trips seeking investment opportunities.

The statistics reveal a troubling trend for Africa’s most populous nation. FDI inflows dropped to just $126.29 million in Q1 2025, down from $421.8 million in the final quarter of 2024. This represents a mere 2.24% of Nigeria’s total capital importation of $5.64 billion, compared to 8.2% in the previous quarter.

“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,” Obi stated.

The manufacturing sector, crucial for job creation and industrial development, experienced particularly severe setbacks. Capital flows to manufacturing declined by 32.1%, falling to $129.92 million in Q1 2025 from $191.92 million during the same period in 2023.

Perhaps most concerning for policymakers is the nature of incoming capital. Approximately 90% of imported capital flowed into speculative money market instruments rather than productive investments, raising questions about the sustainability of these funds.

“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,” Obi explained.

The contrast with other African nations is stark. While global FDI flows generally declined in 2024, Africa bucked the trend with a 75% increase to $97 billion, primarily sourced from Europe, the United States, and China.

Egypt dominated the continent’s FDI landscape, securing $46.58 billion. Other leading recipients included Ethiopia ($3.98 billion), Côte d’Ivoire ($3.80 billion), Mozambique ($3.55 billion), and Uganda ($3.30 billion). Even smaller economies like Guinea ($1.83 billion) and Morocco ($1.64 billion) outperformed Nigeria significantly.

“Most disappointingly, our dear nation, Nigeria—the so-called ‘Giant of Africa’—received only $1.08 billion, about 1% of Africa’s total FDI, representing a decline of about 42% from 2023,” Obi noted.

The opposition leader attributed Nigeria’s poor performance to systemic governance failures, arguing that the government’s reform efforts remain “uncoordinated and largely reactive.”

“Let me reiterate: sustainable economic growth and development cannot be achieved through poor leadership and weak governance—problems that are clearly reflected in declining FDI and our poor performance in key governance indicators,” Obi emphasised.

He described the consecutive declines as evidence of diminishing investor confidence, noting that after the 42% drop between 2023 and 2024, “FDI to Nigeria has further declined by 75% between Q4 2024 and Q1 2025.”

The administration has yet to respond to these criticisms or announce specific measures to address the investment crisis. The data underscores growing concerns about Nigeria’s economic trajectory and its ability to compete for foreign capital in an increasingly competitive African market.

“We cannot achieve sustainable growth and development with ineffective leadership and a weak government,” Obi concluded, calling for fundamental changes in the country’s approach to economic governance and investment attraction.