Petroleum sector attracted $5m foreign investment in H1 — Report

Efforts of the government to bring in investors to Nigeria’s oil and gas sector appear not to have yielded the desired result as the sector only attracted $5m foreign investment in the second quarter of the year, having recorded no investment in the first quarter.

This was contained in a report by the National Bureau of Statistics in its capital importation data for Q2 2024.

According to the report, out of the $2.6bn capital importation recorded between April and June, the oil sector took just 0.19 per cent while the banking sector led with $1.12bn (43.15 per cent).

The PUNCH reports that foreign capital investments in the oil and gas sector nosedived from $720m in 2016 to $3.64m in the entire 2023.

Capital importation is the inflow of foreign capital into a country, typically in the form of investments, loans, or other forms of financial resources.

This can include Foreign Direct Investment, and portfolio investment such as investments in a country’s financial assets like stocks, bonds, and securities.

It can also be in the form of short-term loans, deposits, or other forms of temporary capital inflows.

The petroleum sector’s $50m capital importation in Q2 2024 indicates a slight improvement from the zero reported in the previous quarter.

Our correspondent gathered that over the years, foreign capital investments in the petroleum sector have been declining.

In Q1 2023, the sector recorded $750,000 in capital importation, zero in the second quarter, $850,000 in the third quarter, and $2.04m in the last quarter.

In total, the sector attracted $3.64m as capital importation into Africa’s largest oil-producing country in 2023.

Our correspondent learnt that the petroleum sector recorded $6.37m as capital importation in 2022, this was below what was recorded in just one quarter of 2021.

It was gathered from the NBS that in Q1 2021, the nation gathered a sum of $57.25m as capital importation; $340,000 in Q2 2021; $940,000 in Q3; and $32.31m in Q4. In total, $101m was the capital importation for the year 2021.

Similarly, the NBS revealed that the sector garnered $208m in capital importation in 2014 and $29.76m in 2015.

It peaked in 2016 at as high as $720m. The nation’s oil sector in 2017 saw $331.36m as foreign capital investment. The sector got $133.51m in 2018; $216.23m in 2019 and $53.51m in 2020.

Experts said the sharp drop in foreign capital investment in the oil sector is expected as investors are not convinced that the Petroleum Industry Act has changed the country’s style of doing business.