Oyo, Osun, Ondo, Ogun fail to attract capital importation in Q2 2024, says NBS

The National Bureau of Statistics (NBS) has revealed that Ogun, Oyo, Osun and Ondo are the four western states that have failed to attract capital importation in second quarter of 2024.

The “Nigeria capital importation” report revealed that “Out of the three states that recorded capital importation during the quarter, Lagos state remained the top destination with $1,367.84 million, accounting for 52.52per cent of the total capital imported. Abuja (FCT) followed with $1,236.64 million (47.48per cent), and Ekiti state with $0.0003 million.”

The report revealed that Ogun state in 2023 had capital importation of $27.09 million and has failed to attract any capital importation in 2024.

The reported also showed that Oyo, Osun have failed to attract capital importation since and Ondo state attracted just $0.20million in entire 2023. 

According to the report, Lagos state recorded a capital importation of $2.5billion in 2023 and seen its capital importation dropped from $2.78 billion in Q1 2024 to $1.37billion in Q2 2024. 

Osun, Oyo, Ondo, and Ogun states face challenges in attracting capital importation for several reasons, many of which stem from structural, economic, and infrastructural issues. Here are some of the key factors contributing to this:

These states face inadequate infrastructure, particularly in areas such as road networks, electricity, and transportation. Reliable infrastructure is crucial for attracting foreign and local investors, as it reduces operational costs and increases the ease of doing business.

Like many other states in Nigeria, security concerns such as kidnapping, banditry, and communal clashes in certain areas have made it difficult for investors to feel secure enough to invest large sums of money. Ogun, for example, has seen some issues related to clashes between local groups and industries.

While Ogun has some industrial activity, particularly in manufacturing, its industrial base is still underdeveloped compared to states like Lagos or Rivers.

This limits the flow of capital, as investors prefer locations where industry and economic activities are already thriving. Osun, on the other hand, lacks significant industrial development, which reduces its attractiveness to capital importers.

In addition, these states have faced challenges related to governance, including inconsistent policies, bureaucratic red tape, and slow implementation of economic reforms. For investors, a predictable and business-friendly policy environment is essential. Uncertainty in policies can discourage capital inflows.

Ogun is often overshadowed by Lagos, Nigeria’s economic hub, which is more attractive to investors due to its extensive infrastructure, large consumer market, and international connections. Similarly, Osun has to compete with other states that might have more business-friendly environments.

Addressing these issues would require focused efforts on improving infrastructure, governance, and economic policies, as well as making the states more visible to international investors.