Nigeria Foreign Direct Investment in the first quarter of 2020 declined 427.76 USD million from 1,266.824 USD billion in the same quarter the previous year representing a -66.2% change. A 5 year (2015-2019) analysis of Nigeria’s Gross National Income (GNI) shows that the GNI continuously declined from 522.52 USD billion in 2015 to 385.05 USD billion in 2018, but picked up a bit in 2019 at 407.93 USD billion.

Recent events such as the reduction in the value of FDIs in Nigeria and the looming exit of big markets such as ShopRite and Mr Price, alongside previously exited players like Truworths, Woolworths, and Opera subsidiaries; Opay and Oride have contributed to an increase in unemployment, decline in national revenue generation, increased inflation on locally produced goods, loss of revenue from unexplored and undeveloped sectors, and a regression to the informal economy.

This economic downturn emerged from poor economic policies of the government; the land border closure, a badly designed import-substitution program, poor accessibility of loans by SMEs, an outdated land use act, high-interest rates amid global meltdown due to the coronavirus pandemic, low interests on savings, the CBN’s CRR liquidity control, as well as subsidies and the control of foreign exchange (FX) amongst others.

Nigeria’s difficult business environment is the main reason for the exit of these foreign investors: an unfriendly tax system, the prohibitive cost and processes of importation, poor transport links, pervasive corruption, social unrest, terrorism and kidnap as well as bureaucracy and sudden changes in government policies without an adjustment window.

Although part of the reality for the ShopRite’s Group exit from the Nigeria market is the increased competition in the Nigeria supermarket space, local investors and SMEs have also suffered stifling regulatory policies that hindered innovation, investment plans and affected business growth.

Measuring investment with the Nigeria stock market as an index, all shares in NSE have reduced by 1984 points or 7.38% since the beginning of 2020; additionally, it is worthy to note that no state in Nigeria attracted any foreign direct investment all year. For a country that intends to diversify away from oil, a harsh economic environment will only take the country further away from growth and economic development, and on this long antiquated roller coaster of oil dependence.

Therefore to increase revenue generation and participatory economic development of all sectors, the government will have to relax dis-incentive policies that hinder investments in Nigeria.