Out of the 36 states in Nigeria, only five were the top destinations for investment during the third quarter (Q3) of 2024.

According to the Nigeria Capital Importation Report for Q3 2024, these states collectively attracted $1.25 billion of foreign and domestic capital, signaling growing investor confidence in the Nigerian economy.

Lagos, often referred to as the commercial hub in Nigeria, continues to lead the primary destination, recording $650.42 million inflows, followed by Abuja (FCT) with $600 million, and Kaduna with $1.95 million. Others were Enugu and Ekiti states with $184,229 and $96,600 respectively.

Adeola Adenikinju, president of the Nigerian Economic Society (NES), said for states in the South-West region, proximity to economic hubs like Lagos presents unique opportunities. By leveraging Lagos’ leadership and economic activities, these states position themselves as supply hubs or service centres.

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“Lagos is currently the powerhouse of the country and has a relatively strong governance structure. Abuja is also investing significantly in road infrastructure, which is likely to attract more development. In Enugu, the government has been actively encouraging private sector investment, positioning the state as the regional hub for investment in the South-East,” he said.

Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), said some of these states have natural resources that can attract investment.

Lagos State has the potential to attract more investments, as it is known as an economic hub. It has seaports, two airports, and a population of over 20 million, which makes it a huge market.

Peter Mbah, governor of Enugu State, at the 26th Nigerian Institute of Town Planners event held recently, reaffirmed his administration’s commitment to creating a business-friendly environment, particularly in land administration.

Mbah, who was represented by Chimaobi Okorie, commissioner for lands and urban development, encouraged investors, both domestic and international, to consider Enugu State as a prime destination, offering high returns on investment.

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He assured them that his administration is committed to addressing the challenges facing investment in the country.

“We have derisked investment flows through our flexible land administration policies. We have invested optimally in our security architecture and we have started reaping the fruits.

“Today, Enugu State is the most secure and peaceful state in the country. It’s a deliberate effort undertaken by our administration because we intend to make Enugu the premier destination for investment and business,” he added.

Similarly, Babajide Sanwo-Olu, Lagos State governor, has assured investors that he is consistently creating an enabling environment for businesses and reforming the tax system.

Lagos, according to the governor, contributes 30 percent of Nigeria’s gross domestic product (GDP) and 50 percent of non-oil GDP. The state’s GDP is equivalent to 24 African countries combined.

Sanwo-Olu noted that the Lagos State government is fostering an environment where businesses can flourish through its development agenda, stressing that the agenda embodies his vision for a ‘Greater Lagos.’

“Allow me to emphasise that in our team’s development agenda, we are unraveling our commitment to fostering an environment where business can flourish. This agenda embodies our vision for a greater Lagos,” the governor said recently.

NBS added that these inflows came into Nigeria through the banking sector, which recorded the highest inflows; the financing sector, and the production/manufacturing sector.

“Investment is a catalyst for job creation. Once investment inflows are not there, new job opportunities cannot be created. They would also miss out on revenue opportunities,” Adenikinju said.

“Attracting more investments depends on the output capacity of that state and how they can invest with it,” he further said.

Some states, which include Bayelsa, Ebonyi, Gombe, Jigawa, Kebbi, Taraba, Yobe, and Zamfara haven’t generated FDIs in the last six years.

“When a state struggles to attract investments, it often reflects poorly on its economic health, with potential negative impacts on GDP, employment rates, and poverty levels,” Adenikinju noted.

According to Israel Odubola, a Lagos-based analyst, the implication for states without investment is that there will be more reliance on FAAC allocations.

“And because FAAC allocation is largely constituted from oil proceeds, it makes them more vulnerable to economic shocks,” he said, noting that job creation opportunities will be limited.