By Okafor Joseph Afam
December 10, 2024

In the third quarter (Q3) of 2024, five Nigerian states emerged as top investment destinations, collectively drawing $1.25 billion in foreign and domestic capital, according to the Nigeria Capital Importation Report. This development highlights the growing investor confidence in specific regions of the country.

Leading the list is Lagos State, the nation’s economic powerhouse, with $650.42 million in capital inflows. Following closely is the Federal Capital Territory (FCT), Abuja, which attracted $600 million, while Kaduna recorded $1.95 million. Enugu and Ekiti states also made the list with inflows of $184,229 and $96,600, respectively.

Lagos: The Nation’s Economic Engine

As Nigeria’s commercial hub, Lagos continues to dominate investment inflows due to its robust infrastructure and market size. The state boasts two airports, a major seaport, and a population of over 20 million, making it an attractive destination for investors.

Governor Babajide Sanwo-Olu has reiterated his administration’s commitment to fostering a business-friendly environment. “Lagos contributes 30% of Nigeria’s GDP and 50% of non-oil GDP. Our development agenda is designed to create a Greater Lagos, where businesses can thrive,” he said.

Abuja: Infrastructure-Driven Growth

The Federal Capital Territory (FCT) has positioned itself as a significant investment destination by prioritizing infrastructure development. With ongoing projects aimed at improving road networks and urban planning, Abuja continues to attract both domestic and international investors.

Kaduna: Unlocking Potential

Kaduna’s strategic location in Northern Nigeria and its efforts to attract capital have begun to pay off, albeit on a smaller scale compared to Lagos and Abuja. The state recorded $1.95 million in Q3, showcasing its potential to grow as an investment hub.

Enugu: Building Investor Confidence

Governor Peter Mbah’s administration has actively sought to position Enugu as a prime investment destination in the South-East. By implementing flexible land administration policies and enhancing security, the state government is creating a conducive environment for businesses.

“We’ve derisked investment flows through improved land policies and strengthened security architecture, making Enugu the most secure and peaceful state in Nigeria,” Mbah noted at a recent event.

Challenges for Other States

Despite these successes, some states, including Bayelsa, Ebonyi, Gombe, Jigawa, Kebbi, Taraba, Yobe, and Zamfara, have not recorded foreign direct investments (FDI) in six years. Experts warn that the lack of investment in these states could lead to over-reliance on federal allocations and limit job creation opportunities.

“When states fail to attract investments, it reflects poorly on their economic health, impacting GDP, employment, and poverty levels,” said Adeola Adenikinju, president of the Nigerian Economic Society (NES).

Sectoral Drivers of Investment

The report from the National Bureau of Statistics (NBS) reveals that the banking, financing, and production/manufacturing sectors accounted for the highest inflows. Analysts stress the importance of sustaining investment momentum to boost job creation and economic growth.

The Way Forward

To maintain their appeal, states like Lagos, Abuja, and Enugu must continue to invest in infrastructure, streamline regulations, and foster a secure environment for businesses. For others struggling to attract FDI, the focus should be on leveraging their natural resources and improving governance to create investor confidence.

As competition for capital intensifies, only states that can create an enabling environment for businesses will thrive in Nigeria’s dynamic economic landscape.