Nigeria Loses N1.33 Trillion In Foreign Investments Because of Boko Haram

As the militant group, Boko Haram, continues its bombing of strategic places in the country, the World Investment Report (WIR) of the United Nations Conference Trade and Development (UNCTAD) has said that the domestic economy has lost a whopping sum of N1.33 trillion Foreign Direct Investment (FDI) owing to the problem.

According to the report, FDI flows to Nigeria fell to $6.1 billion (N933.3 billion) in 2010, a decline of about 29 per cent from the $8.65 billion (N1.33 trillion) realised in 2009 fiscal year.

The report obtained by Saturday Tribune further revealed that the sharp decline of FDI to the country was compounded aftermath the global financial crisis.

Also, statistics obtained from the 2010 annual report by the Central Bank of Nigeria (CBN) showed that the total foreign capital inflow into the Nigerian economy in 2010 was $5.99 billion.

The record showed that FDI represented about 78.1 per cent drop from $3.31 billion in 2009.

It would be recalled that the decline in investment had been lately generally attributed to the increasing rate of insecurity in the country, as well as infrastructural decay.

Besides, the fear caused by the Boko Haram bombings in particular has made most foreign investors, who usually featured at the annual Lagos Trade Fair to show case their products to stay away, even as those who were presently on ground had heavy security network around them.

Speaking with Saturday Tribune, the former National President, Association of National Accountant of Nigeria (ANAN), Dr. Sam Nzekwe, said the activities of Boko Haram were causing an incalculable damage to the nation’s economy.

According to him, though it is difficult to quantify the damage in absolute terms, the level of insecurity occasioned by the sect’s activities is preventing the inflow of Foreign Direct Investments (FDIs) into the country.

“If there is anything foreign investors are scared of, it is insecurity. Boko Haram with the recent bombing of United Nations (UN) building in Abuja has put Nigeria on the group of terrorist nations. How then do you expect foreigners to bring in their funds?” he queried.

On his part, a financial analyst and Chief Operating Officer, Twinsronk Consulting, Okechukwu Amadi, in a telephone interview, lamented that the activities of Boko Haram were contributing largely to the declining FDI inflow, and impacted negatively on this year’s trade fair.

He said it was regrettable that at a time the country was being considered as the preferred investment destination by investors all over the world, Boko Haram was raising the level of insecurity.

He explained that the Euro zone crisis and debt issue in the United States had placed Nigeria on a higher pedestal to receive foreign investments, but noted that apart from portfolio investors, others with long term plans could not bring in their funds.

“Basically, the economy of Borno State, where the sect is domiciled, is virtually at a standstill; nothing seems to be working there. By extending their activities to other places like the Federal Capital Territory (FCT), the sect has worsened the whole matter. It was high time the Federal Government faced the challenge,” he stated.

Only last week, an international rating agency, Standard & Poor’s Rating Services (S&P) declared that the country’s economic climate was still risky.

The S&P, in a statement, stated that Nigeria had a "very high risk" in "economic resilience," a "high risk" in terms of "economic imbalances," and a "very high risk" in "credit risk in the economy.

“Nigeria is a country with a high political risk, low GDP per capita, and large infrastructure needs, all factors that contribute to a volatile and risky operating environment for banks. Nigeria has large natural resources, low government debt, and high economic growth potential, which partly mitigate these risks. The slow recovery of the domestic economy has slowed credit growth and kept the stock market muted, limiting economic imbalances.”

The rating agency further stated that the industry risk score of '7' for the country was based on its opinion that the country faced "very high risk" in its "institutional framework" and "competitive dynamics," and "intermediate risk" in "system wide funding."

The President, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, said the activities of the dreaded Boko Haram had scared away investors from the nation’s capital market and by extension, the domestic economy.

He said the quantum of loss of Foreign Direct Investments to the country could easily be measured by the recurring daily huge losses at the stock market which serves as the barometer in the measurement of the growth or otherwise of the economy.

“A lot of foreign investors have stayed away from the market. They are usually afraid of any place where there is a crisis and this has greatly affected the stock market as you can see in the value depreciation,” he stressed.

http://www.tribune.com.ng/sat/index.php/front-page-articles/5838-boko-haram-nigeria-loses-n133-trillion-in-foreign-investments.html

That money don enter their pocket. Why must this people find excuses to loot the treasury.

blame Boko Horam, when corruption is in plain sight.

boko haram is a symptom NOT a disease.
any lost revenue is lost to the thieves in power and would never have made it to the nation.
boko haram exist because of the numerous poverty stricken youths running around caused by many years of corruption.

Money don vanish be dat o, see action film
@ Afam
Guy you too sharp o, bad guyz

We have lost far more than that. 1.33t is an underestimation. It's a pity we have not realized how serious the implications of this menace is.

How much loss did IPOB cause?