• Foreign direct investment in Nigeria dropped by 33% last year due to a severe shortage of dollars.
• Crypto adoption has grown exponentially in Nigeria, however foreign crypto investment has been low.
• The National Bureau of Statistics reported that FDI has decreased by approximately 90% since its peak of $4.7 billion in 2008.
Record Low Foreign Investment In Nigeria
The largest economy in Africa, Nigeria, is facing a foreign investment problem despite exponential growth in crypto adoption. According to the National Bureau of Statistics (NBS), foreign direct investment (FDI) in Nigeria dropped by 33% last year due to a severe shortage of dollars which discouraged crypto companies from expanding into the country. The FDI also decreased by approximately 90% since its peak of $4.7 billion in 2008.
Growth Of Crypto Adoption In Nigeria
Crypto adoption and usage rate have grown at an exponential rate within the Nigerian market as adult traders are now preferring digital currencies over fiat cash due to the constant devaluation of the national currency, naira. In Chainalysis’ 2020 Cryptocurrency Geography Report, Nigera ranked eighth among 154 countries included in the study for their crypto adoption and usage rate.
Impact Of Dollar Shortage On Crypto Expansion
Despite this growth of crypto adoption and usage rate, foreign crypto investments have not been seen much as expected due to dollar shortage prevailing in the nation making it difficult for companies to expand into the country with ease.
Decrease In FDI Since 2008
The decrease in FDI from its peak value back in 2008 could be attributed to many factors including lack of capital inflows from abroad as well as unavailability or lack of good quality infrastructure facilities which hinder investors interest and confidence while investing money into any project or business venture inside Nigeria without proper assurance that their money wouldn’t go waste easily due to poor governance policies or lack thereof within such environment leading to further discouragement for potential investors outside Nigerian boarders looking at investing money into Nigerian economy through various mediums including cryptocurrency related businesses or projects etcetera .
Conclusion
Despite exponential growth and increased usage rate for cryptocurrencies within Nigerian market , it appears that dollar shortage prevailing within nation might be discouraging potential investors from outside Nigerias borders from investing their funds into local business ventures or projects hence reducing overall volume incoming FDI investments into nation on yearly basis .