It’s almost uncanny that when I get thinking about an issue around the economy lately, events conspire to push such matters to the front burner of public discourse. This time, it is about the matter of investment. Nairametrics’ take on the subject matter has got many pundits – in and out of government – chiming in with their perspective. For me, I see the issue from a slightly different, even if significant perspective. Some weeks back, I put a call through to a smart officer of our bureau for statistics, asking him how the investment function is captured in the calculation of Gross Domestic Product. The GDP as we well know, is typically calculated as C+1+G+Nx (meaning that Consumption, Investment, Government Expenditure (less Taxes), and net Export, are key considerations to this method of working out the size and direction of an economy. My main concern which led to that call, was that I felt we weren’t taking Domestic Investment as seriously as we should – or we weren’t giving that important factor the prominence it deserves (especially for a growing, largely informal economy). I will explain shortly.
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First, let us look at the ongoing brouhaha around Foreign Direct Investment into Nigeria. Nairametrics pointed out that of the $10 billion attracted as foreign investment into Nigeria in Q1 2026, $6.5 billion went into Treasury Bills investment. Valid. They further pointed out that f the $45 billion that came in as investments in the year 2025, $13 billion went into money market instruments, evidence that foreign investors were only interested in dealing with Nigeria with a long spoon while maxing out their returns for the short term. Also valid. Nairametrics then stated the obvious, that Nigeria should be seeking are investments that help to ‘build factories, hire workers, transfer technology and deliver long-term value’. Agreed. But this is where the naivety shows. Or is it just plain old voyeurism. Whereas it is easier to sit outside of government and point out ways of doing everything better like it was easy, I personally have a lot of respect for Nairametrics because it is not one of the more frivolous or partisan platforms. My intervention here is therefore to call Ugodre and the platform to a more elevated stance and to understand that they cannot afford to plough the depths like some other analysts are wont to do. A go-to financial and economic analysis platform can also be helped by the rest of us to get better and stay the course, for a better Nigeria.
I needed a terminology to address the type of analysis that has become popular in Nigeria today, what with a growing number of popular influencers and self-ordained economists. No matter anyone’s position or a policy matter, there is a tendency for these analysts to simply latch on to the likely disadvantage of a policy and to construct a doomsday scenario simply made of material from the downsides. Equally, those in support of policies are warned not to only present the upsides. In my public outings I have had to remind viewers that the best that can be achieved from a policy outcome is pareto-efficiency; where 80 per cent of the people benefit while 20 per cent may actually be worse off. When inflation crashed in 2025, with food prices across the board taking the hit, many farmers besieged my WhatsApp, complaining bitterly about government import of grains – even though prices went down on almost all food crops. I appealed to them for patience, but also pointed out that for me, since 90 per cent of Nigerians were non-farmers, I believe that policy had had a good outcome. Nigerians needed relief from the food price spikes of 2023 and 2024.
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I asked AI to help me with a name for this now-popular form of analysis and it came up with the below:
When an analyst or debater focuses solely on the disadvantages while ignoring the advantages of a policy, they are engaging in one-sidedness or cherry-picking. In policy analysis, this can manifest through specific rhetorical or logical fallacies:
Cherry-Picking (or the Fallacy of Incomplete Evidence): Selectively focusing only on facts, figures, or consequences that support an argument while intentionally ignoring contradictory evidence.
Appeal to Consequences (Argumentum ad Consequentiam): Attempting to prove a policy is wrong solely by emphasising its negative outcomes rather than evaluating its actual merits.
Negativity Bias: A cognitive bias where individuals disproportionately pay more attention to and give more weight to negative information or potential drawbacks.
In academic and professional environments, policy analysis is ideally a balanced procedure. Analysts are tasked with conducting Policy analysis to systematically evaluate all alternatives and their consequences, rather than just the drawbacks. When evaluating any argument, relying only on disadvantages without weighing them against the pros can be classified as a Logical fallacy because it creates a distorted view of the policy’s true impact.
This is the first major flaw that the respected platform made in the analysis it put out on Fforeign investment flows into Nigeria. There are more, as will be discussed below.
As mentioned earlier, there is the critical flaw of feigning naivety around the current realities of the global economy. Where does one start from? Mr Trump has been single-mindedly pursuing a policy of protectionism in a bid to save the American economy. He has reason to because the American economy was/is dying. He muscled the world to wrestle back some economic power, imposed crazy tariffs on sundry allies in a move that is reminiscent of pre-Great Depression/World War II beggar thy neighbour policies. His target was China in the main, but every country felt the pinch. On many occasion, Trump has assembled some of America’s biggest entrepreneurs in the oval office, and extracted commitments from them, literally at ‘gunpoint’. Some of them shivered as they muttered how much more investments they were going to bring back into the US. Mr Trump’s latest move was a charm offensive to China, as it got more obvious that the bullying may not be achieving the full effect – or perhaps that the Chinese were far gone. Prime Minister Mark Carney of Canada brought up another concept at the last Davos meeting in January 2026, when he spoke about ‘Middle Powers’ coming together as their own force against the US, and perhaps to continue the asymmetric subjugation (through trade), of non-powers – like Nigeria. I wrote on this new reality on this page some time back.
In the interim, every country has reacted. The Africa Continental Free Trade Agreement (AfCFTA) seems to have picked up a little more as Africans realise that at the end of the day nobody is coming to save us. But we are certainly in an era of nationalism. The World Bank in March 2026 released a report which encourages each country to try and industrialise, which is another encouragement to economic nationalism. Back home, President Tinubu has clearly pursued a policy of developing internal strengths, increased self-dependency, less vulnerability, and building improved industrialisation, especially through value-addition to agro products and mineral resources. Some of the results include a leap in manufacturing exports (up to 50 per cent more), as evidenced by exports of fast moving consumer goods into the African continent, N87 billion export of solar panels into West Africa and USA in 2025, export of refined petroleum products worth billions of dollars chiefly by Dangote Plc (which is now the world’s largest exporter of JetA1 fuel), and the establishment of 3 Lithium-processing companies (with investment of more than $1.2 billion in Abuja as well as Nasarawa, Ebonyi, and Kwara States, just to name a few. So, the analysis by Nairametrics simply tries to hijack the minds of Nigerians and all its readers in one direction, rather than present a balanced view of what is happening in the global economy, and specifically in the Nigerian economy under President Tinubu.
Now, let us look at the subject matter of investment. Investopedia defines investment as ‘an asset or property acquired to generate income or gain appreciation’. This is the most basic and easy-to-understand definition. In the realm of macroeconomics, we split investments into domestic and foreign. But in my humble opinion, Nigeria and Nigerians have focused for too much and too long on foreign investments. Nairametrics also falls into the same trap. For a largely-informal economy, is there any possibility that Nigeria generates domestic investments at a more rapid rate than foreign? I believe so. Also, what got us to the point of thinking that our salvation will come from abroad (especially now that every country is holding on to its own and even xenophobia is covering the face of the world like a bad eczema?). It can only be some sort of learned helplessness that makes us ignore what we have and focus on what other people can give us. It must be something inserted in our study of Economics, that we must have to unlearn. It is some sort of symptom of neo-colonialism and economic slavery that we need to exorcise our minds from.
It is easy to calculate foreign investment. All such investments come in through official sources at the Central Bank of Nigeria. One of the critical aspects that the Nairametrics argument has deliberately ignored is the fact that the major capital investments come in through technology, infrastructure, equipment, human capital, consulting, and other materials, as pointed out in the well-articulated rejoinders by Dr Tanimu Yakubu and Mr Bode Opeseitan, among others. The commitments into our oil and gas sector have already commenced but we will only see them when the international oil companies deploy and our production doubles in a matter of months or even a year. Of course, the now generational neglect of economic history made Nairametrics not realize that over time, most FDIs into Nigeria comes into the oil and gas sector. Over time, Nigeria’s FDI spikes when there is a crude oil asset being developed, and crashes when crude oil prices fall globally and IOCs beat a retreat. Of course there is a positive relationship between crude oil prices and investments/production because margins are higher with higher global prices.
But this brings up another critical development – that Nigeria has promoted the influx of Nigerian companies into the oil and gas as well as other sectors. Whether we were talking of companies that manufactures cables, cement, cars, electronics, leather products, building materials, household utensils, paper, and most FMCGs, Nigerians are taking over. The general narrative of a collapsing economy actually collapses under scrutiny – pardon the pun. Strong and focused Nigerians are taking over critical sectors, leaving the perennial doom-scrollers holding the can of ‘ibanuje’. Nigeria’s imports have generally crashed by 30 per cent year on year, while our exports have increased (in dollar terms) by 40 per cent. This is verifiable progress. In the oil sector, Nigerians have taken over assets of many IOCs, with Seplat being the new Mobil, and Renaissance being the new Shell (even as these powerful IOCs maintain their deep sea assets). Tony Elumelu’s Heirs Energy continues to pull its weight, while companies like Aradel, OANDO, Green Energy, Famfa, Amni, Aiteo, Conoil, First E&P, ND Western, Waltersmith, Petrolin, continue to dominate the space and are now producing over 50 per cent of Nigeria’s daily crude oil output! This is not a mean achievement under this administration. But the question I have always asked, which Nairametrics should help with is ‘if any of these indigenous companies choose to expand or invest in an asset today, will such an inflow be captured as foreign investment or domestic? And if domestic as I believe it should, why do we all ignore domestic investment in our analyses and reckoning while deifying foreign investment and feigning total helplessness in spite of our strengths? For example, Dangote takes investments to Tanzania, Ethiopia and elsewhere in Africa where they record his investment as ‘foreign capital’. But the chunk of his investment his here in Nigeria – which we ignore in our analysis like it is nothing. We disrespect our domestic investment/investors rather than revere and encourage them and Nairametrics and other private sector players must never be caught aligning on the side of ignorance.
Mind you, foreign investors are way too smart, they don’t need convincing. The more you try to convince them, the less attractive you are. It will benefit Nigeria a great deal more if our people know that they do more damage to this country by always putting out the negatives, condemning Nigeria and amplifying every untoward incidences. Even foreign investors know that we only display immaturity in advancing the cause of our nation. You will hardly see Americans fronting the fact that close to 40,000 people die of gun violence in that country. And the more we let the world know the strength of our domestic investments, the more foreign investors will come here. We must understand the mindset that it takes to build a factory in our country; it takes understanding that there is a market for products that is viable in comparison with other countries. It takes the investor knowing that Nigeria is investing in critical infrastructure as President Tinubu has been doing. It takes understanding that Nigeria is a not a hell hole – as many foreigners have discovered despite some Nigerians insisting it is – and that foreign business owners can live here in peace and tranquility. It takes foreigners knowing that they will have trustworthy Nigerian human capital to employ here – even as AI is encroaching fast on the job space. We must therefore realise the urgency of now as we make utterances and write articles otherwise we become our own greatest enemies. Luckily, we have Turkish, Chinese, Lebanese, and Indian investors beating a path to this country and investing in sundry sectors, sometimes even nationalising as Nigerians. Maybe that is why their new investments are now in the domestic investment space, and not foreign.
Also important to note is the fact that foreign portfolio investments – or hot money as they are infamously monikered – are not totally useless for the growth of an economy. As much as Nigeria has always attracted more portfolio investors in time, we must understand that they form the pool of resources available to an economy per time. Also, if the long run is made of several short runs, then they begin to count for the growth of the economy. What is more? If the financial system can boast of substantial portfolio investment, that encourages local banks to gradually lend more to the economy as it is a sign of confidence in and integration with our financial system. Even foreign investments in our stock markets help that market to recover its glory and soar, thus attracting more domestic investors who form the base of the market. This also attracts more listings as confidence grows, enhancing capital formation. This is how economies grow and develop, not through the hyping of everything that could go wrong.
Now, let us look at domestic investment critically. This is what AI threw up months ago when I enquired:
According to the National Bureau for Statistics (NBS), domestic investment in Nigeria is calculated as Gross Capital Formation (GCF), which measures the total value of capital acquisitions minus disposals, plus changes in business inventories. The data is compiled alongside CBN using two primary formulas.
- The Output/Expenditure Formula – Under the national income accounting framework, domestic investment is calculated as:
(Gross Capital Formation GCF) = Gross Fixed Capital Formation(GFCF)+Changes in Inventories)
Gross Fixed Capital Formation (GFCF) includes all spending on physical additions to capital stock, such as purchases of machinery, tools, and equipment. It also includes infrastructure development (roads, railways) and residential/commercial building construction.
Changes in Inventories: This is calculated by subtracting the total value of business inventories at the beginning of the year from the total value at the end of the year.
- The Macroeconomic/Investment Formula
For broader economic modelling, economists and researchers in Nigeria look at both Private and Public investment to calculate domestic investment demand:
(Total Domestic Investment=Private Investment (Ip)+Public Investment (Ig))
Because measuring direct private domestic investment can be challenging in emerging markets, economists often use Credit to the Private Sector from deposit money banks as a proxy for Private Investment. Public investment is typically sourced directly from public capital expenditure (CAPEX) in government budgets.
It is evident that the two broad formulas emphasise what happens in the formal sector – talk about using credit to the private sector from deposit money banks as proxy for private investment in an economy where we have 39 million MSMEs with very few of them using credit – as a matter of strategy even where credit may be available but expensive. Talk about capturing purchases of equipment, inventory, machinery and other capital stock as proxy in an economy where most businesses don’t bother keeping records or rendering accounts? This is a serious problem which we must all think through. If investment is about spending on assets with a view to making a profit, our extensive informal economy is built on that exactly. Every time a worker takes out of his salary to open that shop for his wife outside their bungalow or even adds two rooms behind his house for rent, that is investment. Meanwhile, we do such activities much more frequently than they do in developing economies. Therefore, we cannot calculate domestic investment with formulas but with deployment of facilities to obtain primary data, and of course with frequency. It is a lot of hard work.
Now, let us view what is happening in Nigeria in real time. Some of our states are getting transformed. The reforms of President Tinubu have released a lot of liquidity to the states. I invite Nigerians to go look at what is happening in states like Ogun, Niger, Ekiti, Ondo, Enugu, Abia, Imo, Anambra, Kano, Kaduna, Gombe, and elsewhere. The governors of these states have focused on infrastructure, industries, and agriculture to varying degrees. I sometimes urge them to also consider deepening their balance sheets to improve the skew of borrowing between the federal and state governments from an alarming 93:7 to something like 75:25 if they can identify major transformational infrastructure at their state or regional levels. But a lot is happening already. Lagos is the Big Kahuna. See the transformation of the Ikoyi axis. What about Lekki, Ibeju, Ikeja, Agege, Mile 2, even up to Badagry? Every day money is pouring into our real estate sector such that that sector has now become the 3rd largest in contribution to GDP. It’s high time. Why did billionaire Mr Jim Ovia assert that real estate investments were more profitable than banking just last week? We should expect him and his friends to continue with the transformation of our city scape while small thinkers can only see the gloom.
I conclude by pointing to one fundamental anchor of our fixation with foreign investment at the expense of domestic. It will be great to have a few indices that we can pursue in the protection of local businesses and domestic investment, beyond the World Bank-advise measures; things that are peculiar to our environment. For example, we can now measure the success of the new tax reform in visibly reducing multiple taxes and harassment (those achievements will come gradually and they affect small, domestic businesses more). We could also measure how easy it is for small, local businesses get contracts in Nigeria (local content) across all sectors and in the public and private sectors, especially where they have to compete with strong conglomerates. This way, we may begin to protect domestic investments more. In my view, they matter more, because most of the visible changes and growth we have seen lately across sectors have been wrought by domestic investment. We should encourage more of our rich people to relocate their investments here, like Jim Ovia and others are doing. And we must purge ourselves of this unproductive and exaggerated dependency while tidying our houses to be more attractive to dependable foreigners.
Two fun facts to go: One, whenever you make investments of any amount, in Nigeria with a view to make some profit, please know that you are doing the right thing and contributing greatly to the advancement of your country. Two; I suspect that if we captured domestic investments more accurately we could easily add another 10 per cent to our GDP.
‘Tope Fasua is the special adviser to the President on Economic Matters.
